Qualcomm’s Big Push for Mobile TV

Qualcomm is set to take its MediaFLO service nationwide over the weekend, flipping the switch in 15 new markets and expanding service in four others. The move — which was finally made possible by the DTV transition — will increase FLO’s potential audience by 40 percent, enabling the service to reach 200 million consumers.

The San Diego-based chipmaker launched its $800 million mobile TV network two years ago, and MediaFLO is offered by both AT&T and Verizon Wireless, the nation’s two largest carriers. Whether the service has found many users willing to pay $15 a month for the service is doubtful, though: Recent Nielsen data indicates only about 13 million U.S. consumers watched mobile video in first quarter 2009. And MediaFLO’s share remains a small fraction of that modest number, with an estimated 239,000 subscribers in fourth quarter 2008, according to a new report from SNL Kagan.

Another Nielsen report found that 65 percent consumed that video over the mobile web, compared to just 40 percent who watched via a subscription service. I think that disparity will grow as smartphones take a larger share of the market, boosting traffic on the wireless web and sending mobile viewers to sites such as YouTube, which feature the kind of short clips that seem a better fit for mobile than 30-minute sitcoms. Worse, as Sascha Segan at Gearlog notes, FLO’s two U.S. carrier partners may be turning their attention elsewhere. Verizon offers only one phone supporting the service (down from two) and AT&T’s FLO lineup has gotten dusty, and neither operator seems very interested in bulking up their FLO handsets.

Qualcomm hopes a larger footprint will encourage operators to market the service more aggressively — never a strong suit for U.S. carriers — but FLO’s expansion is coinciding with a big push from the Open Mobile Video Coalition, a consortium of broadcasters looking to take traditional TV content to mobile via mobile DTV. The technology requires only a transmitter affixed to an existing tower, according to the group, and can be delivered for a one-time fee of less than $100,000 or annual payments of roughly $10,000. Mobile DTV’s low overhead is sure to result in cut-rate, or even ad-funded, mobile video offerings. And while Qualcomm has struck deals to deliver FLO through in-dash entertainment systems and other non-mobile channels, the OMVC is targeting those markets as well.

There is plenty of demand for mobile video services among U.S. consumers, as MobiTV recently demonstrated by notching its 7 millionth subscriber. But much of MobiTV’s traction is tied to the fact that the service is often packaged with other data offerings in all-you-can-eat services. While MediaFLO may be able to leverage a nationwide footprint to spur more carrier support, it will struggle mightily to convince users to pay $15 just for on-the-go video. Which is why Qualcomm’s $800 million network increasingly looks like a bad bet.

Question of the week

Will Qualcomm’s $800 million MediaFLO network ever pay off?
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Colin Gibbs

Colin Gibbs

Founder and Principal Peak Mobile Insights

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1 Comment Subscribers to comment
  1. Michael Wolf Tuesday, June 16, 2009

    I’ve been watching mobile TV closely in the U.S. and have been very curious about how consumers will take to Free-to-Air transmissions (FTA). I think one of the main issues with MediaFLO has been the fact its an additional fee for – in the consumers mind – an unknown value. ^^^Where mobile TV has worked – mainly in Asia – there has been free transmissions to handsets that ultimately get consumers hooked.^^^ The OMVC/ATSC folks seemed serious about this last year and were aiming for FTA in handsets in 2009. We’ll see.

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