USDTV: No Meals, No Leg Room, But Cheap

Cable World, May 23, 2005

By Mavis Scanlon

There are more than 16 million U.S. households that have television sets but no cable or satellite service. That's the initial target market for broadcast veteran Steve Lindsley, whose terrestrial pay-TV service U.S. Digital Television offers about a dozen popular cable networks and local standard and hi-def signals for $19.95 (premium net Starz is available for an additional $6.95).

Salt Lake City-based USDTV leases unused digital spectrum from broadcast stations to deliver encrypted network signals over the air. Antennas and set-top receivers can be purchased at 3,000 Wal-Mart locations and the R.C. Willey electronics chain. USDTV offers free installation but requires a one-year commitment.

So far USDTV has 10,000 customers in Salt Lake City, Albuquerque, N.M., and Las Vegas. "We like what JetBlue has done, we like what Dell Computers has done and we like what Toyota has done," says CEO Lindsley, referring in particular to JetBlue's success at challenging its larger competitors by offering bare-bones service at cheaper prices. "These companies were able to gain a foothold in very maturing industries, even with incumbents that are well- heeled."

The company raised about $20 million in start-up capital more than a year ago. It reined in plans to launch in 30 markets by the end of 2004 in order to focus on proving its business model, according to Lindsley. It is now awaiting a cash infusion from another round of strategic venture funding that it will use to expand. Lindsley says he expects to close the financing soon.

[Copyright 2005 Access Intelligence, LLC. All rights reserved.]