** As published in RCR Wireless News ** LAS VEGAS – There’s no denying the special romance most Americans have with television. But expanding that popular pastime into an equal (or dare they dream, greater) experience on small screens has been as tough and costly as any in the entertainment business. In an industry where risks rarely pay off – look to NBC’s late-night TV debacle as a perfect example of the power of the status quo in television – technology companies, broadcasters and carriers are trying to open a newer, more daunting platform that could quickly surpass the reach of in-the-home TV by at least 3-to-1. As you can imagine, none are taking the same path to get there, but things are starting to gel throughout the ecosystem even while every player admits profits won’t be coming anytime soon.
In one camp, there’s the Open Mobile Video Coalition, which is pushing a technology that will simply pull live broadcasts tailor-suited for mobile devices from the existing digital transmissions of at least 800 TV stations across the country. The Mobile DTV approach is much more traditional from the outset: live local programming supported by advertising that will only reach as far as each broadcast signal allows. Broadcasters also hope to tap existing partners like Nielsen and Rentrak to measure ratings. “The consumer will decide when the technology is eligible for revenue,” said Brandon Burgess, OMVC president, and chairman and CEO of ION Media Networks Inc. Mobile TV is mostly a promotional product, much like a sidecar for most companies today, he said. “Until you get this to millions of players I think it’d be pretty hard to monetize,” Burgess said on a panel at CES titled, “TV to Go.” This is partly why he doesn’t expect a flood of carrier interest in Mobile DTV even after trials are completed this year and the first version of the technology is made commercially available. There’s also tricky digital rights management issues and the likelihood that premium content won’t be made available on Mobile DTV until later. A new network built tower by tower While broadcasters have spent the last few years working on standards for mobile broadcast technology, Qualcomm Inc.’s FLO TV has been trying to prove the business opportunity in shorter, sometimes more deliberate steps. “The good news and bad news about FLO is that we launched early,” Bill Stone, president of FLO TV, told RCR Wireless News following the panel. He admits that the “swiss cheese footprint” the company initially launched with did not offer the right mix of content and value. Qualcomm has spent more than $1 billion on FLO TV so far, but now covers 110 markets and a population of about 210 million. Stone believes the launch of Mobile DTV will increase awareness and do some in-direct marketing for FLO TV at the same time. Between the two broadcast-based services, there are some obvious price differences for the consumer. Qualcomm wants $10 to $15 a month for its service. “The United States is the largest pay-TV market in the world,” Stone said. Every form of content available today has an advertising and subscription component that coexist, and “I don’t think mobile TV’s going to be any different.” Qualcomm wants to prove the business can scale and it doesn’t think it reach that point by reinforcing the idea that some content can be free when there are real costs tied to the production of that content. FLO TV is a subscription business with relatively few customers, but it’s also backed by a company willing to play the long ball. Qualcomm has funded many of its successful businesses on the profits from previous successes. CDMA wasn’t profitable early on nor cheap to develop. “I think that the patient view they have on the business is really, really important,” Stone said, hinting that there’s no pressing deadline by which Qualcomm plans to get a return on its billion-dollar-plus investment. Standing out from the pack To help achieve that slower, organic growth, Stone and his team are focusing on delivering more content, particularly in areas where they’ve frequently seen usage spike. If the past few years were the laying-the-groundwork stage, these next couple will have to be marked by more features, programming and distribution if FLO TV plans to see that long ball through to the end zone. “The pieces are all there now, we just have to execute,” Stone said. One category of particularly bullishness is live sports. The network has seen live professional sports games claim an 80% share and it wants to see more of that. Just hours after Qualcomm’s Chairman and CEO Paul Jacobs said FLO TV would “double down” on sports programming this year, Stone told RCR Wireless News to “stay tuned” on what customers should expect to see soon, but all signs point to a variety of top-caliber programs coming down the pike. The next swing might come in the form of Major League Baseball. Indeed, the company was testing quite a few channels from MLB.TV about two years ago when RCR Wireless News toured the FLO TV operations center. FInally, the other shoe that’s taken years to drop on FLO TV is timeshifting, but that too appears to be nearing the final stretch. “We were chasing everything at once,” Stone said of the delay, but there is a renewed interest in giving customers the ability to record shows and cache content on their device of choice. Building awareness remains to be the top priority for FLO TV (after all, not many people have heard about the service), but just as Stone concluded: “All the success that Qualcomm has today doesn’t just instantly happen… To get from here to there on a more operational commercial perspective, there’s a lot of things that have to be thought through.”