Technology

USDTV Launches in N.M., Adds Fox News, Starz!

3/16/2004 5:48 AM Eastern

New York -- New wireless-cable service U.S. Digital Television Inc. has rolled out in Albuquerque, N.M., and plans to launch in Las Vegas next month in time for the National Association of Broadcasters’ convention there, officials said Tuesday.

"Albuquerque has just been completed and is on the air today," USDTV chairman and CEO Steve Lindsley said at a press conference here.

The new service -- which is leasing digital spectrum from local broadcasters as a way to offer local TV stations, their HDTV signals and a limited number of cable networks -- also announced that it is adding Fox News Channel to its lineup, which is priced at $19.95 per month.

The company, which has already debuted its service in Salt Lake City, has also struck a deal to offer Starz! as its first premium channel, according to Lindsley.

His company, based in Salt Lake City, also confirmed prior reports that it will retail its digital HDTV set-top and special new antennas at Wal-Mart Stores Inc. locations across the country, as well as at the R.C. Willey Home Furnishings chain, which is owned by Warren Buffett’s Berkshire Hathaway Inc.

The set-tops will sell for $98.76 at Wal-Mart and the antennas for $29.95.

USDTV is positioning itself as a low-cost alternative -- a "JetBlue" for TV -- for consumers who don’t want a lot of cable networks: just the basics, as well as HDTV, according to Lindsley.

One of the company’s big targets is "cable-nevers."

"Consumers are increasingly frustrated with their cable service," Lindsley said. "Consumers know that they are paying for too many channels that they never watch."

In terms of getting digital spectrum in the 30 markets where it plans to launch this year, USDTV "has agreements with many broadcasters, from one-off station deals in our early markets to large station groups with multiple properties spread across the United States," according to Lindsley.

But he wouldn’t reveal those broadcast relationships at this time, "to allow our [TV-station] partners to continue to negotiate digital must-carry and other program-related issues with the big cable companies" and, apparently, to not jeopardize those talks.

USDTV has been offering its service in Salt Lake City for about three months now, and it has 1,000 subscribers even through the company did virtually no marketing in that DMA, Lindsley said.

Its initial program lineup on the cable side will now include Disney Channel, Toon Disney, ESPN, ESPN2, Discovery Channel, The Learning Channel, Food Network, Home & Garden Television, Lifetime Television, Lifetime Movie Network and Fox News.

USDTV will charge subscribers for Starz!, but Lindsley didn’t have a price for it yet.

The company has also secured $20.5 million in new financing, including $8.5 million in private equity funding from NexGen Investments and a private investor group led by Stonebridge Capital Management Inc., as well as another $12 million from private investors.

USDTV already has a deal with Chinese plasma-TV maker Hisense Co. Ltd. in which the manufacturer will invest $60 million to produce 400,000 set-tops for the new service.

USDTV’s target is to have 5 million subscribers in four years, Lindsley said.

September