MobiTV Aims To Avoid Fate Of FLO TV

Ray-DeRenz

Qualcomm last month announced it would stop selling dedicated devices for its FLO TV mobile broadcast service as a step toward possibly shutting down the FLO TV service altogether early next year. A pay wall, availability on a limited number of handsets and a slow rollout, along with the underlying cost of acquiring spectrum, have contributed to FLO TV's woes.

In light of FLO TV's potential demise, Online Media Daily decided to ask rival mobile video provider MobiTV about its business and the outlook for mobile TV more broadly. Offered as a stand-alone service and through carrier partners, MobiTV has grown from three to 13 million subscribers in just the last three years. The 11-year-old company has raised $115 million in venture funding to date.

OMD spoke with MobiTV CMO Ray DeRenzo. Prior to joining the company, he was VP of business development at mobile research and consulting firm Telephia, acquired by Nielsen in 2007.

OMD: Like FLO TV, MobiTV is primarily a pay-based service. What differences account for the company's relative success?

DeRenzo: We're both subscription services and we deliver premium programming to mobile devices, and that's about where the similarity ends. Because we are utilizing cellular operators' existing networks, both 3G and now 4G networks, we at MobiTV did not incur the cost of acquiring spectrum and building out a network for the single purpose of building out a mobile video experience. So there's just a basic cost-basis difference. We're also available on the vast majority of devices that operators are rolling out into the market.

OMD: How is MobiTV distributed?

DeRenzo: In some cases we are white-labeled, where we carry the operator's brand. So in the case of Sprint TV, MobiTV is powering the Sprint TV experience. T-Mobile has done a recent announcement that they will be launching a T-Mobile TV service [for Windows Phone 7] devices which is powered by MobiTV. In other cases, it's the MobiTV branded service available on AT&T or Verizon.

The other distinctive distribution model is that sometimes operators will bundle in the TV experience as part of an overall data package, as is the case with Sprint TV. In other cases, it's a premium, $10-a-month subscription, which will be the case with T-Mobile TV.

OMD: MobiTV is up to 13 million subscribers -- what kind of growth have you seen in the last year in particular?

DeRenzo: Generally, the trends have been really strong in 2010 and I think there are several reasons why that's the case. The devices themselves are getting much more capable of delivering a high-quality video experience and have higher processing power, so the actual experience in hand is quite good. That's coupled with the fact that content providers are making top-tier content available -- live sports events like the World Cup, like the college football season on ESPN, like the NFL football on Verizon, so I think the content is becoming a little more timely and topical.

OMD: What about increased competition in mobile video from Web players like Hulu and Netflix?

DeRenzo: One of the things we do uniquely well is deliver live event programming to mobile devices. So, you're correct that there's any number of options for people to discover and consume video on the phone, but most of that is video on demand. It's episodic programming you can watch a day, a week or a year after it was actually broadcast on the networks. We deliver hundreds of hours of live programming during the course of a week, and we're seeing the level of engagement -- in terms of the number of people tuning in and the length of time viewing -- is trending positively.

With network improvements and the ability to download content and store it on your device, we're also seeing a whole new category of content becoming quite popular, and that's longer-form content like movies. So the ability to download a movie and store it locally on your device, and watch it in bite-size increments over seven to 10 days, has really made longer-form content somewhat popular as well.

OMD: What's the impact of the iPad and tablets in general on video?

DeRenzo: One of the most compelling use cases around the tablet is video. The portability of the devices, the size of the screen and the processing power of the tablet all lend itself to high-quality video experiences. We've actually seen on some of the sports applications where the viewing length on a tablet is probably 2x that on a mobile phone.

OMD: When do you plan to launch a full version of the MobiTV app for the iPad?

DeRenzo: It's a slightly modified version from that on iTunes in terms of the programming lineup, but we're on tap to have that into Apple for their certification process by the end of November.

OMD: What other technologies are driving video adoption?

DeRenzo: One of the interesting things we've seen is the release of the Android platform. As a class of device, it's outperforming other classes of device in which we've launched MobiTV applications. We're on the iPhone, RIM [BlackBerry], Windows Phone 7, Java devices, Brew devices...and because Android devices tend to be more media-centric devices, we've seen higher attach rates in terms of people subscribing to the Mobi-TV service. So conversion rates on the Android platform are really quite high [from free trials], as is engagement. We had anticipated that, but we're really quite pleased to see that validated in the market.

OMD: Is engagement higher on Android than the iPhone?

DeRenzo: It is. In general, what we've seen on Android devices is that session lengths tend to be slightly longer and the number of sessions people are engaging in tend to be slightly higher, so in the aggregate viewing on that platform is a little bit more than on the iPhone.

OMD: How do see the ad model developing for mobile video?

DeRenzo: Advertising is going to become more meaningful. We have 13 million people behind the paywall and free versions of the app so there's kind of a meaningful audience to reach in advertising with MobiTV. I don't think we'll ever get to the point where we're a fully ad-supported service...but certainly we could use advertising revenue to subsidize the cost of a subscription or to front the cost of new and interesting content into the programming lineup.

OMD: Improvements in devices, browsers and wireless networks will also drive greater video viewing on the mobile Web. How do you see that as a competitive threat?

DeRenzo: I think that's right. If you look at YouTube, for example, there's a lot of video traffic on mobile networks where people are invoking their browsers to link to a Web site to view the video. With HTML5 coming out -- enhanced browsers -- I think there will always be a segment of people who will browse and discover content.

But what we do at MobiTV is -- we make it very easy to discover and immediately engage with the content. In the browser world, you have to go and tag all the sites and create bookmarks and/or favorites, and you never really know what video is presenting at the site at any given point in time.

If you really wanted to watch a live Alabama college football game, you're not going to be able to find it generally available on the Web. So it's a trade-off between the breadth of video available on the Web via a broswer versus the depth of the experience and simplicity of discovery of the application.

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