USDTV on its last legs; files for bankruptcy

July 17, 2006

USDTV, the multichannel wireless pay video provider that uses digital broadcast spectrum from local broadcast stations to deliver multiple channels (including HD) to home subscribers, has filed for Chapter 7 bankruptcy. USDTV is now negotiating with the bankruptcy courts to permit the continuation of the service so the assets can be sold.

Headquartered in Draper, UT, USDTV has targeted the low end of the subscription TV market, charging $19.95 a month for 30 channels of basic cable programming. The company said it had about 16,000 subscribers in Las Vegas, Dallas, Salt Lake City and Albuquerque, N.M.

USDTV leases digital spectrum from television stations to deliver its programming. Though it was still operating last week, a Chapter 7 bankruptcy filing usually means a company plans to liquidate its assets rather than reorganize under court protection from creditors.

According to its bankruptcy petition, USDTV estimated assets between $1 million and $6 million, and debts between $10 million and $50 million.

Since its launch in 2003, USDTV has had difficulty winning large numbers of subscribers. In 2005, it received a $26 million cash infusion from several broadcast station groups including McGraw-Hill Broadcasting, FOX Television Group, Hearst-Argyle Television, LIN TV, Morgan Murphy Stations and Telecom DTV.

USDTV CEO Steve Lindsley told that “The overarching reason USDTV filed for bankruptcy is that the industry did not support the initiative. I would say the industry is paralyzed by fear of stepping out and competing with cable. I don't think the industry right now is prepared to do it.”

Receive regular news and technology updates.
Sign up for our free newsletter here.