A recent story on the Broadcast Engineering website reviewed Qualcomm's potential decision to sell its video delivery business, FLO TV. Qualcomm's chairman and CEO, Paul Jacobs, said his company is open to “selling its struggling FLO TV mobile broadcast unit.”
“It's not likely that FLO TV will stay the way it is today, which is just cable TV content sold primarily through cellular operators,” Jacobs said at the summer Uplinq 2010 Conference in San Diego.
FLO TV President Bill Stone told Bloomberg that the service's future hinges on extending its parameters beyond TV content into new solutions such as electronic magazine delivery. “If it's only mobile TV, we're dissatisfied; we're not happy with it,” he said.
Broadcasters can take these comments as either good or bad. On the bright side, if FLO TV goes away, it means one less competitor for broadcasters entering the mobile TV delivery business. Through a pessimistic lens, if FLO TV fails, it did so because there is no future in the mobile TV delivery business.
Peeling back some of Qualcomm's statements, one gets a more complete picture of how the company perceives the data delivery business. “Mobile is changing everything,” Jacobs said in his keynote address. The growth of data traffic is causing consumers to experience dropped calls and what he called “digital brownouts.”
Jacobs highlighted that mobile phone data traffic already exceeds voice traffic. The monthly data traffic in 2009 exceeded the combined data traffic of 2008. Social networking appears to be driving much of this growth: Facebook is growing at a rate of 600 percent, and Twitter signs up 300,000 users a day. FLO TV's Stone said, “One person streaming a video takes up as much bandwidth as 100 cell phone calls.” All these factors combine to make it difficult to continue to support any video delivery on today's cellular networks.
FLO TV's solution is to off-load data hogs like streaming video and electronic magazines to a “dedicated broadcast technology.” With a broadcast model, it takes the same bandwidth to deliver an electronic version of Broadcast Engineering magazine to one or 1 million users. That has always been a key advantage of broadcast.
Even so, Qualcomm's comments indicate that the window of opportunity for mobile TV delivery could be narrowing. If broadcasters plan to broadcast mobile TV, they need to do it now. If they don't, someone else may, permanently, lock them out of a potentially new station revenue stream.
The problem for a company like Qualcomm is that it has control over only one part of the business process: the transmit side. Without the willing participation of handset makers (funded by cell phone companies), the receivers will never reach the market. The result is limited availability, high prices, little promotion and no advertising. The bottom line: Few consumers have even heard of mobile TV, and even fewer have tried it.
For broadcasters to successfully deliver mobile TV, several things need to happen. First, a wide selection of compatible phones, dongles and receivers need to be cheaply and widely available. Second, a large number of broadcasters need to participate by transmitting mobile TV. Lastly, everyone involved in the product chain — receiver manufacturers, broadcasters and industry organizations — needs to promote the service.
Without an across-the-board effort, mobile TV could remain one of the industry's best-kept secrets.
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