Mobile TV broadcasters won’t suffer same fate as FLO TV

With the news last week that Qualcomm was shutting down its FLO TV service, many immediately questioned whether broadcasters’ nascent Mobile DTV initiative might suffer the same fate. Do consumers really want to pay for video on their portable devices, and can broadcasters find a successful business model to make their investment pay?

The answers are not yet clear, but terrestrial stations now involved with putting a mobile signal on the air, and who plan to launch multichannel commercial services in earnest by the end of 2011, think the conditions they face are different than what Qualcomm was up against.

“We understand the pitfalls of what Qualcomm was up against, and we think that broadcasters have a significant advantage compared to what the FLO TV venture,” said Jay Adrick, vice president of broadcast technology at Harris Broadcast. His company has already supplied mobile TV transmission equipment to dozens of stations across the country and helped develop the A/153 Mobile Handheld (M/H) standard adopted by the ATSC that leverages the same spectrum now used by stations for their terrestrial TV channels. The standard is now casually referred to as “MDTV.”

For starters, the investment that Qualcomm had to make to build out the FLO TV service was in the billions of dollars compared with the roughly $130,000 stations must spend to add mobile DTV capability to their existing transmission infrastructure. There was also a high maintenance cost for operating multiple transmitters in every market it served (it was in about 60 DMAs as of this year)­ — including power bills and rental fees to lease space on three to five broadcasters’ transmission towers within a single market — and the FLO TV service was limited to 50kW ERP, compared with broadcasters’ 1mW. This allows most stations (not all) to cover their entire market with a single antenna.

“We could have a station on the air in Mobile DTV in about four hours,” Adrick said. “It took Qualcomm several years to get up to speed. That’s a big difference.”

Then there’s the issue of content and service cost. Broadcasters are looking at providing local content, not available on FLO TV, for free, and then adding “premium” national content, which was available on FLO TV, for an additional subscription fee. Using this model, the total cost to subscribers should be less and therefore more attractive.

The current Mobile DTV trial in Washington, D.C., being hosted by the Open Mobile Video Coalition, a consortium of stations interested in building out the service, is shedding some light on consumer attitudes about mobile video and what consumers like to watch. Eight stations serving the market are participating in the trial, offering a total of 22 channels. Most are displaying simulcasts of their standard TV channel, but there other content is available, such as children’s programming, weather and local sports. There’s a “free tier” with local clear-to-air content and a “pay tier” with such channels as Discovery, MSNBC, Fox News Channel, Comcast Sportsnet, MTV (Viacom) and others.

About 1000 devices have been handed out to consumers for free in order to test different technologies. This includes about 300 Samsung Moment cell phones, 300 Dell Inspiron mini M netbook computers, as well as some Kenwood in-car entertainment systems and some LG DVD players with built-in ATSC tuners. There’s also a $99 dongle device called the Tivit being tested, which is just slightly smaller than a deck of cards and connects to an Apple iPhone via WiFi for TV viewing. The service includes 416 x 240 resolution video at 30fps, an electronic program guide, IPSec-based conditional access (from Nagravision) and the ability to measure audience usage (provided by Rentrack).

Initial audience measurement data available via Rentrak includes length of viewing by time of day (when do people watch?); viewership of various program genres and channels (what do people watch?); and demographic breakdowns of viewership groups (who is watching?). The test coordinators are also collecting feedback on audience receptiveness and recall to interstitial advertising via an initiative called “Project Roadblock.”

Harris Interactive is managing the research culled from the test audience and could provide advertisers with market metrics that are more difficult to gather with traditional over-the-air TV.

Comments for test participants have been mainly positive, with many saying they now watch more TV news than they did before. The test results are also finding that most participants are watching video on their cell phones two times per day, with a third watching it three times. And most are watching while they are away from their home or office. The most desired live content is breaking news reports, sports programs, traffic and weather updates.

One mobile video trial participant wrote: “Prior to the MDTV, I rarely turned the TV on at home prior to 8 p.m. but now having it available as I am waiting in line and hanging out at the park is great. It's especially great to know that I will have the most current info if there is "breaking news" as opposed to being online and waiting to refresh my browser or hoping the website is updated.”

Another commented: “I love the live content because once there was a bomb threat at my job and no one at the mall knew anything about it. I went on to watch the news and ‘BAM’ there it was live. How crazy!”

There’s talk of broadcasters partnering with local cable companies or telcos to secure a back channel for online ordering, on-demand ordering (podcasts could be downloaded to a subscriber’s phone during “off” hours) and other interactive features (using things like “widgets”), which are all possible within the ATSC A/153 specification. Such partnerships could provide a triple play of voice, data and TV service.

Stations in a local market could ban together to form an LLC to operate a mobile network, whereby each station contributes one or more of the following: content, bandwidth (most stations now on the air with a MDTV signal are using about 1.5Mb/s–3Mb/s of their allotted 6MHz of spectrum), management and/or sales. The partners would then share revenue. Multiple station groups could (and some already are) band together and manage their mobile services from a centralized location, thereby minimizing operational costs.

If they are to be successful, stations can't just offer a simulcast of their existing TV channel. Many understand this. Independent station group Media General has begun rolling out mobile TV service in several of its markets (WCMH-DT, the NBC affiliate in Columbus, OH, is the first of seven to go on-air with MDTV), initially simulcasting its traditional TV content. However, there are plans for a variety of “unique” content to come.

Perhaps the lesson learned from Qualcomm’s failed FLO TV model is that the greatest asset stations have is their hyperlocal content, and that’s what consumers want to watch on their cell phones. They don't necessarily want to watch the latest episode of “Modern Family,” they want to quickly check traffic and weather reports involving their neighborhood.

And maybe in the process the public will become more attuned to what’s going on in their world. As another Washington, D.C., trial participant said: “I have watched more news since I got this phone than I have in the last two years!”

“[The Qualcomm announcement] might hurt public perception of mobile DTV in the short term but the reality is that four years ago when Qualcomm tried to get into our space, we told them there were basic things that were flawed in their model,” Harris’ Adrick said. “Broadcasters might be late to the [mobile TV] table, but when they get there, they will bring content people want to consume.”