[opendtv] Broadcast, Wi-Fi Take Wind Out of FLO TV Sales

  • From: "Manfredi, Albert E" <albert.e.manfredi@xxxxxxxxxx>
  • To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
  • Date: Wed, 4 Aug 2010 16:07:28 -0500

I think that a key requirement for mobile TV success is to *not* depend only on 
dedicated appliances for it. It has to be built into cell phones. Which makes 
one wonder, in a country well cellcos control the design of cell phones, why 
the cellcos would play along. Unless it becomes a pay service. Which makes it 
lose much of its appeal. Catch 22.

"'Our goal is to get paid for our content in as many different ways as we can 
without hurting the mother ship,' Moonves said. 'The key here is flexibility.'"

"NBC chief Jeff Zucker also told The Wall Street Journal this week that the 
network was considering charging for online content.

"'I do not think that it is a foregone conclusion that content should be free 
on the Internet,' he said."

Yup, that's the correct goal for businesses. The correct goal for consumers is 
to not cave in. In principle, if mobile TV is a success, more ad revenue would 
become available to the congloms.

Bert

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http://www.tvtechnology.com/article/104356

Broadcast, Wi-Fi Take Wind Out of FLO TV Sales
by Deborah D. McAdams, 08.04.2010.

MULTIPLE CITIES: The broadcast industry hammers away at its mobile DTV plan 
while current subscription-based player Qualcomm considers getting out. New 
research from Juniper Research suggests why.

"A new study has found that disappointing adoption levels of existing mobile TV 
services--allied to competition both from streamed mobile services facilitated 
by the growing prevalence of Wi-Fi, and from mobile reception of free-to-air 
terrestrial networks--has lead to growing disillusionment within the industry," 
Hamphsire, England-based Juniper said today.

Juniper's latest report on the mobile TV sector predicts that global mobile TV 
subscriptions on dedicated networks won't exceed 10 million until 2013 at the 
earliest. The firm's count comprised video transmitted via DVB-H, DMB, CMMB and 
MediaFLO, (the transmission scheme for Qualcomm's FLO TV). On the other hand, 
3G, 4G and Wi-Fi-enabled mobile TV subscriptions are expected to reach 180 
million in three years.

Qualcomm's revelation that FLO TV is on the table is understandable, Juniper 
researcher Dr. Windsor Holden said. Qualcomm chief Paul Jacobs said during the 
company's third-quarter earnings call that "we're engaged in discussions with a 
number of partners regarding the future direction of the [FLO TV] business."

MediaFLO has run a gauntlet since its introduction. Verizon adopted it for 
VCast in 2007--two years into frustrating buffer times early VCast subscribers 
experienced downloading video over Verizon's data network. Holden said the 
delayed DTV transition also hurt FLO TV, and the $10 to $15 monthly 
subscription rates set by carriers was too much.

"The delay in analog switch-off prevented it from gaining national coverage," 
he said. "It's partners set the service price at too high a level, which put 
off potential customers. When you factor in likely free-to-air competition over 
ATSC-M/H in the medium term, then clearly MediaFLO faces a difficult future in 
the U.S."

Juniper said MediaFLO "may have better long-term prospects in Asian markets 
such as Japan and Taiwan, and that its networks--and those of other mobile 
broadcast service providers--may be better served focusing on delivering a wide 
range of data services rather than as acting as pure mobile TV distributors."

Qualcomm has never revealed subscriber numbers for FLO TV, available on Verizon 
and AT&T wireless networks. MobiTV, which works over data networks and was thus 
not included in Juniper's count, said recently it passed 10 million users 
worldwide. comScore puts U.S. mobile TV users at just over 2 percent of the 
nation's 285 million cell-phone subscribers, or around 5.7 million.

Meanwhile, broadcasters haven't announced their mobile DTV business model. 
Scottsdate, Ariz., researcher In-Stat nonetheless predicted recently that 
broadcast will drive the mobile medium.

"Global 3G network development is driven by the popularity of data services 
such as social networking and texting," In-Stat's Norm Bogen said. "Mobile TV 
stands to leverage this demand."

Broadcasters have been working on mobile DTV for more than two years. Little 
news of their progress has emerged since a consortium of stations and networks 
announced an interim executive leadership team in June. The consortium, dubbed 
"Mobile Content Venture," included Fox, NBC, ION and Pearl, a separate entity 
comprising nine station groups.

The MVC's charter is to figure out the business model for mobile DTV. The 
primary question is pay versus free. Broadcasters have talked about the 
competitive advantages of having a free service since they started pursuing 
mobile DTV. The signal is transmitted similarly to regular broadcasting, so few 
plant modifications are needed and capital overhead is minimal. Broadcasters 
also have local content unavailable on established subscription-based mobile TV 
services.

Free and local are considered the main marketing pillars of mobile broadcast 
DTV. However, as the network chiefs consider online pay walls, insiders say 
free mobile DTV is not inevitable. Reports today indicate CBS chief Les Moonves 
is negotiating with Hulu, the online TV platform co-owned by ABC, NBC and Fox. 
Hulu launched a premium subscription service in June--Hulu Plus, for $10 a 
month. Reuters says Moonves likes the pay model.

"Our goal is to get paid for our content in as many different ways as we can 
without hurting the mother ship," Moonves said. "The key here is flexibility."

NBC chief Jeff Zucker also told The Wall Street Journal this week that the 
network was considering charging for online content.

"I do not think that it is a foregone conclusion that content should be free on 
the Internet," he said.
 
 
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