Sezmi Raises $33 Million, Cuts its Workforce by 20%

Completes Seattle Technical Trials of its New TV Service

Sezmi, a company that has developed a set-top box-based service which it bills as "combining traditional TV content, movies and Internet video in a single, easy-to-use product"--announced late last month that it has secured an additional $33 million of financing. According to the company, the figure includes new investments from Advanced Equities, and follow-on investments from previous investors, Morgenthaler Ventures, Omni Capital Group, TD Fund and Legend Ventures. Sezmi's announcement of its new funding came shortly after the New York Times reported that the company had cut its workforce by 20% (i.e. approximately 20 employees). "This round of funding enables us to put the final touches on product development and testing, and bring the Sezmi service to market," Buno Pati, Sezmi's co-founder and CEO, said in a prepared statement. "We are pleased to welcome our new investors and would like to thank our previous investors for their ongoing support." Added Keith Daubenspeck, chairman of Advanced Equities: "This infusion of $33 million of additional capital reflects the strength of Sezmi's business plan and product offering despite the troubled economic climate. It is a rare accomplishment these days to attract this kind of attention and funding." Sezmi claims that its "personal television" system's content line-up will include traditional broadcast networks, cable and specialty channels, Internet video, pay-per-view movies and more.

Last month, Sezmi announced that it had completed technical trials for its new television service. According to the company, the trials, which were held in Seattle (which Sezmi describes as a "geographically demanding broadcast environment"), demonstrated the interoperability and scalability of its FlexCast video distribution technology, which it bills as "combin[ing] the efficiency and scale of terrestrial digital broadcast delivery with the interactivity and access of existing broadband infrastructure." Sezmi's local broadcast partners for the trial included Fisher (a Seattle-based company that owns or operates 21 TV stations and eight radio stations, including local ABC affiliate, KOMO-TV and Univision affiliate, KUNS-TV), Tribune (owns and operates 23 major-market TV stations--including WGN and Seattle Fox affiliate, KCPQ-TV--which collectively reach 80% of US TV households) and Daystar (operates around 50 TV stations in major markets around the US, including Seattle's KWDK-TV), over whose spectrum it operates its service. The company bills its platform as providing additional revenue streams to broadcasters: it licenses broadcasters' spectrum in order to distribute, or datacast, TV and Internet video to end-users. It also claims that the platform will provide highly targeted advertising and new advertising formats that will extend broadcaster brands by bringing together local news and programming with online content, in a single local station content "Zone." "With the drive among consumers for greater customization and control over their media, Sezmi strengthens our core business by improving our ability to better target advertising and engage with viewers while positioning us for future opportunities utilizing our digital spectrum," Colleen Brown, president and CEO of Fisher, said in a prepared statement.

As part of the trials, Sezmi said it confirmed that its end-to-end video processing platform is operational, and broadcasting content from its network operations center to local markets. The network operations center is hosted in Harris Broadcast Communications' broadcasting facilities in Melbourne, Florida. "It's exciting for Harris to be working with a company that is enabling broadcasters to leverage their digital investment and respond to consumer demands for an advanced and personalized means of watching television," Harris president, Tim Thorsteinson, said in a prepared statement. "By adopting an end-to-end Harris ONE solution, Sezmi has created an environment in which it can effectively accomplish its workflows and ensure reliable delivery of its product to the consumer. We look forward to continuing our relationship as Sezmi goes to market." Sezmi says it is now launching technical trials in additional cities and preparing consumer trials in several markets around the US. It plans to launch its service in the first half of 2009.