If you haven’t heard of Sezmi, that’s because the service is rolling out slowly and inconspicuously, starting in Los Angeles and now available in 36 U.S. markets. By cutting deals with local broadcasters and cable networks, Sezmi Select Plus delivered pay TV channels over the air through a special antenna box for $20 per month with a $150 hardware bundle, which includes a DVR.

Now, VideoNuze reports that Select Plus, which included channels like Comedy Central, CNN and Discovery, will be discontinued in the United States.

Sezmi will instead focus on its $5 per month “Select” package, which includes the same channels you can get through regular old rabbit ears. And that service will be delivered through broadband instead of over the air. Apparently, broadcasters have become skittish about leasing their unused wireless spectrum to Sezmi, given the Federal Communications Commission’s interest in acquiring that spectrum for wireless Internet.

I reviewed Sezmi for PC World in June, and although I had some gripes with the software interface and occasional reception glitches, the idea of a low-cost cable alternative, with DVR included, was unbeatable.

But without those premium channels, Sezmi brings little to the table compared to other set-top boxes from Boxee, Roku and Google TV, along with the current batch of game consoles. Between Netflix, Hulu Plus and subscriptions to individual sports, you can already maintain a healthy diet of web video without betting on a company that’s still trying to find its business model. From my perspective, premium channels are what made Sezmi unique.

I suppose it always seemed a little too good to be true.

Having piloted their “personal TV service” in Los Angeles since November, Sezmi is formally launching into the LA market today via local Best Buy outposts.
Last month at CES, I finally got a look at their product… which pulls together local other-the-air (OTA) programming, premium programming (such as CNN and SyFy) simulcast OTA in select markets, and Internet-sourced content including CinemaNow VOD and YouTube. Their vision is solid, and more holistic than most, likely embodying the future of home entertainment by aggregating multiple content sources within a personalized presentation for each family member (or housemate).

But, based on several beta testimonials, Sezmi’s initial implementation appeared somewhat lacking—typical of many new products. Fortunately, as co-founder and president Phil Wiser shared with ZNF, “We learned a great deal from our pilot customers and rapidly incorporated a variety of changes as a result. We improved the performance of the user interface, included a full screen live TV guide and added in significant reception and signal quality improvements.”He also mentioned the great success of user self installation during the pilot, in terms of ease and efficiency. Something I can definitely get behind after a number of inefficient and frustrating CableCARD install experiences.

The Sezmi package, which consists of a media reciever/DVR, smart array antenna, and remote, runs $300. But a service subscription is also required. $5/month gets you guide data for the locals, access to online content, and the like. Whereas Sezmi Select Plus provides access to the OTA “cable” programming, along with the base service, for $20/mo. Obviously Los Angeles is the first market lit up with premium over-the-air content, via locally licensed spectrum. However, those living on the bleeding edge could possibly order Sezmi online from Best Buy now and activate the lower service tier anywhere else in the US. Until Sezmi officially rolls out nationwide late this spring.

(This post republished from Zatz Not Funny.)

That’s why I’m intrigued by Sezmi, a TV service that’s announcing that it’s rolling out to its first real customers (in Los Angeles). The service aims to provide a more personalized, Net-savvy, inexpensive alternative to cable and satellite–complete with the real broadcast and cable channels you can’t get from Apple TV, Roku, or Vudu. It does so via a 1TB DVR/set-top box that provides access to three types of TV sources: broadcast stations, cable channels, and Internet content. (It snags the first two kinds over the air, via a powerful antenna in a box that looks like a loudspeaker: Sezmi simply grabs local broadcast channels as is, and the company is leasing spectrum from local broadcasters to transmit cable channels–including both standard-def and HD.)

Sezmi’s lineup of cable channels isn’t as expansive as a higher-tier package on cable or satellite, but it’s got Animal Planet, Bravo, Cartoon Network,  CNN, Comedy Central, Discovery, MSNBC, MTV, Nickelodeon, Oxygen, SyFy, TBS, TCM, TLC, TNT, VH1, and more. The most notable omissions are sports channels–I don’t see ESPN or others in the lineup–and premium movie channels such as HBO, Showtime, and Cinemax. But Sezmi does offer a store that sells and rents movies and TV shows from a library of thousands of titles (powered in part by Roxio’s Cinemanow). You also get access to Internet video such as YouTube and podcasts.

The service is touting itself as

Sezmi uses its roomy 1TB hard disk to give each member of the family his or her own personalized on-demand TV experience: Grownups and kids both get program guides tailored to their watching habits that weave together broadcast, cable, and Internet shows, including ones on the DVR and ones showing at scheduled times.

The company gave me a sneak peek that included a demo of its interface: It’s impossible to come to definitive conclusions without hands-on time, and I’m particularly curious about how seamlessly it knits together its disparate sources of content. But from what I saw, it looks reasonably promising.

How much will you pay for Sezmi, and where will you get it? Its goal is to undercut the cost of cable: Basic service that only includes broadcast stations will go for $4.99 a month, and a broadcast/cable package will cost $24.99 a month. A la carte movies and TV episodes are extra. You’ll either buy the box and antenna (for $299, $50 more than TiVo charges for a DVR with one-sixth the capacity) or rent it. Once the service rolls out to more regions–which the company says will happen soon–it’ll be available both at retail stores and through service providers such as medium-sized phone companies and DSL ISPs.

I generally feel like I’m watching maybe five percent of the channels my Comcast cable service gives me–and among the very few that I’m not willing to give up are CNN, MSNBC, and TCM. So Sezmi, which has all those stations, sounds like a plausible alternative–and even if I had to plunk down $299 for the box, I’d make it up pretty quickly in the money I’d save over cable.

Cable and satellite TV subscribers: Are you basically happy, or does Sezmi sound alluring?