A Salt Lake-based company is taking its next big step in trying to revolutionize the way millions of people get their TV programming.
U.S. Digital Television LLC, or USDTV, is in the midst of a commercial roll-out of its wireless digital TV service in the Salt Lake market — one of four markets where the service is available. Pitched as a low-cost alternative to cable at less than $20 monthly, the service will be demonstrated today at a Salt Lake Wal-Mart parking lot.
The concept is improved TV for people balking at the high cost — or the many unwatched channels — of cable.
"We have two primarily consumer targets," said Steve Lindsley, chief executive officer of USDTV and former president of KSL Television. "One is viewers that receive TV via antenna only. Twenty-one million homes in the United States are getting TV via antenna. They want more channels than just their locals, but they don't want to pay for cable price increases. . . . Consumers don't see the value in paying those increases.
"The second target involves cable not underserving, but instead overserving millions of homes in the United States with more channels than people want to watch and certainly don't want to pay for."
USDTV, formed in June 2003, conducted consumer trials last year in Salt Lake (where 4,000 households participated), Albuquerque and Las Vegas. The commercial rollout comprises those cities and Dallas. The company now has about 4,500 paying subscribers, including about 2,500 in the Salt Lake market, which includes the Wasatch Front and Tooele.
"Consumers love the channel selection, picture quality and price point," Lindsley said.
He believes the Salt Lake market has 75,000 to 100,000 households that will have some interest in USDTV.
"Overall, our research is clear — and our experience in markets have proven this out — that there are 15 million to 16 million households in the United States that would subscribe if it were available in their markets, so we think it's much bigger than just a 'niche' play," Lindsley said. "There are millions of homes not consuming cable or satellite and quite frankly feel like it's not worth paying for a number of channels they don't want to get. . . . We just think cable is too expensive, that we can be a great alternative for people and can run a nice business on a $19 price point."
Lindsley sees USDTV as "the Southwest Airlines of the cable TV business, to the extent Southwest was able to streamline an offering and give people what they want and do it for less money and still become profitable," he said. "Certainly, it's our goal to build that same kind of organization."
Some major broadcast groups are backing USDTV's push. The company recently announced a $25.75 million funding agreement with several partners, including Fox Television Stations Inc., Hearst-Argyle Television Inc., McGraw-Hill Broadcasting, LIN TV Corp., Morgan Murphy Stations and Telcom DTV LLC.
The company, which has about 40 employees in Utah among its 65-person overall work force, has taken advantage of broadcasters' actions in recent years as they have faced a pending government-mandated shutdown of analog TV transmission. With stations' digital TV upgrades came the opportunity to lease extra parts of the digital spectrum for a service like USDTV, which has forged partnerships with the broadcasters.
But keeping the technology simple — a set-top box and antenna are the only physical components the consumer needs to think about — is one goal for USDTV.
"That's really one of the great strengths of the marketing side of our business play, unlike TiVo, where they spent a half-billion dollars educating people what a 'tapeless VCR' really is," Lindsley said. "That was cool technology that people didn't understand. Ours is easy. It's a low-cost alternative to cable.
"As we show people the service, they don't think a $19 price point and 'off the air' will give you a DVD-quality picture, so the picture quality is really stunning to most people, very exciting. It also will provide HDTV from local broadcast networks, like KSL and others, at the same price point."
USDTV has announced the video-on-demand and digital video recording upgrades will be available at some point, but Lindsley said the number of channels might not grow much because that would add to programming costs that would have to be passed on to customers.
"The focus right now is to execute on a successful commercial launch in these four markets, and with the completion of that successful launch, we will have more funds available to launch in more major markets," Lindsley said. "Our focus is on large markets, and we have the broadcast partnerships sufficient to launch several major markets in a relatively short period of time."