On the programming side, Flo TV last month struck a deal with NBC Universal for a raft of live sports events including Wimbledon, the U.S. Open, the French Open, and the Stanley Cup Final. The service offers a dozen linear channels from broadcast partners that also include CBS, MTV, ESPN and Comedy Central.
While Qualcomm has big ambitions for Flo TV, which it began building six years ago, it hasn't released actual subscriber numbers for the service, which is offered by AT&T and Verizon Wireless. Flo TV competitor MobiTV, which relies on wireless data networks rather than television spectrum to deliver on-demand and live programming, however, just announced passing 7 million subscribers. Two million were added in just the last six months.
Overall, the U.S. mobile video audience hit 13.4 million in the first quarter, up 50% from a year ago, according to Nielsen's recent Three Screen Report. And the 3.5 hours per month people spent watching mobile video was even higher than 3 hour average for Web video viewing.
But the audience so far is limited to a devoted group of early adopters, with only about 6% of all mobile users are watching video on cell phones. What's more, advertisers are still awaiting mobile TV to reach critical mass. "It's really hard to get people to dive into it," said Chris Allen, vice president and director of video innovation at Starcom USA.
When it comes to Flo TV, he believes its linear programming schedule isn't as well suited to mobile as on-demand content. Live sports events would be the exception to that rule and Flo TV's recent efforts to beef up its sports programming suggest it realizes the importance of focusing on that segment to drive viewership.
Even with stronger programming, though, budget constraints imposed by the recession are forcing marketers to concentrate video ad spending elsewhere. "It's a matter of budget priorities, and mobile is just down the list," said Allen.