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14
Oct
2010

Bidding FLO Farewell

POSTED BY Global Administrator
Last week was, it is fair to say, a rather momentous one for North American mobile broadcast TV. Firstly, the sad news that, having struggled defiantly against the dying of the light for a good while now, Qualcomm announced that it was suspending sales of its D2C FLO TV service and devices with immediate effect; the company has added that existing subscribers “would be able to receive the service into the spring” (which carries the implication of a FLOless summer); it also said its white label service to Verizon and AT&T Wireless “was not affected at this time” (see previous parenthesis). MediaFLO was always an ambitious project; the company had paid nearly $600 million for spectrum in the 700MHz band in 2003 and 2008, and many more millions for the network infrastructure. But the venture fell victim to a combination of factors, many of which were beyond Qualcomm’s control. Paramount here was the fact that it didn’t have a national network, in large part due to the fact that much of the optimal spectrum was still in use when it launched services – and was then made unavailable for a further period after delays to the digital transition. Without this national coverage, operators were wary about marketing the service, and vendors were wary about providing handsets. A combination of sporadic, localised marketing and a limited selection of handsets is not conducive to good sales of a mobile service. Secondly, by relying on a white-label model of its TV bundle, Qualcomm placed marketing and content pricing control in the hands of the carriers, entities whose track records in this record is not the finest. By pricing the package at $15-20 per month, the carriers immediately alienated a consumer base who were only slowly waking up to the fact that mobiles could be used for activities beyond calling and texting. Thirdly, it required consumers to buy a new phone: this is problematic to begin with, but when you add in the fact that you have a choice of three models if you’re lucky, then the number of takers drops still further. Fourthly, this all took place against the backdrop of a consumer smartphone boom which was manna from heaven for streaming TV rival MobiTV, which began offering a wide range of apps dedicated to specific sporting events, and – critically – offered them over WiFi as well as 3G. Finally, there is the small matter of ATSC M/H. Another mobile broadcast TV standard, this one piggybacks onto the US digital terrestrial standard in a not dissimilar manner to ISDB-T in Japan: it requires only minor upgrades to the existing digital terrestrial networks rather than the creation of new infrastructure. At the same time that Qualcomm was waving goodbye to its D2C FLO offering, the chipset manufacturer Siano was announcing that it had just launched a new chipset in collaboration with LG, the principal developer of the ATSC M/H broadcast standard. The first handsets featuring this chipset – enabling users to watch broadcast TV on the mobile – are expected to be available from mid-2011 onwards. And the service will be free to end users. All in all, not a terribly propitious combination. Throw a few other choice morsels such as the economic downturn into the mix, and it’s hardly surprising that Qualcomm has reluctantly decided to call time on the project. The key question that remains, however, is: what will it now choose to do with a rather handy near-national network and attendant spectrum? (BTW - on a completely unrelated note - Juniper Research is now offering video white papers in which our analysts - including yours truly - discuss our latest reports. Check out the latest one, on Mobile Adult content, here.)