— Many factors that impeded FLO TV’s consumer adoption aren’t factors that would hamper the success of ATSC Mobile/Handheld (M/H) service, some analysts and ATSC Mobile proponents contend.
But both services share the challenge of eye-time competition from a growing selection of mobile video sources that will likely grow further with the rollout later this year of 4G LTE service from Verizon Wireless, whose CTO Tony Melone called LTE, “very, very conducive to video.” In addition, said Verizon Communications president/COO Lowell Mc- Adam, the carrier will offer “devices for video” in the first half of 2011.
FLO TV’s challenges included monthly subscription fees up to $14.99/month for up to 20 channels of national content, the high cost of acquiring dedicated 700MHz spectrum, and the costly buildout of a dedicated nationwide broadcast infrastructure from scratch, analysts and ATSC M/H proponents said. On the other hand, ATSC M/H, also called Mobile DTV, doesn’t face these particular challenges because it will initially deliver TV stations’ current free over-the-air local TV broadcasts to mobile and in-vehicle devices, consumers are already familiar with local TV service, and local TV stations will use their existing TV spectrum, eliminating the burden of costly spectrum purchases and building dedicated infrastructure from scratch.
“The costs were too high for what Qualcomm was trying to accomplish,” said Anne Schelle, executive director of the Open Mobile Video Coalition (OMVC), a group promoting ATSC M/H service.
Both services, nonetheless, face some of the same challenges, some analysts said, including eye-time competition from mobile video sources such as sideloaded video played back on portable media players (PMPs), movies downloaded to cellphones via Wi-Fi and iPhone/ iPod Touch apps that stream the Hulu and NetFlix services via cellular and Wi-Fi.
Other mobile video competitors include the Samsung Media Hub for downloading purchased and rented movies and purchased TV episodes to Galaxy S Android smartphones and the Galaxy Tab tablet. Another is the longstanding MobiTV live-TV and video-on-demand service, which uses cellular airwaves and requires a subscription but is included free with Sprint’s Everything airtime plan, said Ross Rubin, NPD’s executive director of industry analysis.
MobiTV, which also offers video downloading, has 13 million subscribers in the U.S., a spokesman said. Subscription fees vary, with 60+ live and VOD channels usually offered by carriers at $9.99/month.
“The selection of content was strong,” Rubin said of FLO TV’s direct-to-consumer service, “but outside news and sports, consumers want much of their video content on demand.” For content other than news and sports, he added, there were less expensive alternatives, including sideloaded video.
On the other hand, he and the OMVC point out that ASTC M/H will differentiate itself from its eye-time competition by offering free, local-TV content, particularly local TV news and sports. FLO TV, in contrast, did not offer local content, and all of its content was subscription-based.
In addition, Rubin said, whereas consumers might not want to pay a subscription fee to watch a favorite primetime program that they might not be able to view in their entirety, they might use an ATSC Mobile device to catch 10 minutes of Judge Judy or news programs while waiting on line or sitting in a car.
For her part, OMVC executive director Anne Schelle called the demise of FLO TV “regrettable since FLO was a pioneering service in many ways.” But, she added, “the costs were too high for what Qualcomm was trying to accomplish.”
With “the right combination of content, technology and distribution, it’s been our experience that Mobile TV can be a very good thing that consumers love to watch,” she added.
The right content includes “the best of local and national content” aired by local TV stations, she said. “When people think of TV on the go, they think of the content they get at home. There is a very high interest in accessing the very same TV programs.”
She pointed to the results of a recently completed market trial in Washington D.C. with a prototype ATSC Mobile-equipped cellphone. Local news was the most-watched type of programming, followed by reality TV and entertainment news, she said.
Consumers during the trial also used their TV-equipped Samsung Moment Android-based smartphone to continue watching a program that they had been watching on their home TV when they left the house, Schelle noted. Viewers also opted to record programming for viewing at more convenient times via the phone’s internal memory.
A total of 150 people participated in the trial, and about 63 percent used the service daily. The consumers had access to 23 channels from nine broadcasters, including about nine premium cable- TV channels.
Local TV stations could supply a mix of free channels and subscription channels, she noted.
Another advantage for ATSC Mobile is that existing TV stations can extend their ad-based business model to mobile devices and leverage their existing programming time to advertise their mobile service, Schelle said.
She also doubted that cellular carriers would ever have the bandwidth needed to meet consumers’ demand for on-the-go video streaming.
For his part, NPD’s Rubin sees ATSC Mobile making gains mostly as a value-added feature in existing consumer devices such as PMPs, mobile tablets, portable DVD and Blu-ray players, car video systems, notebooks, and USB-dongle add-ons to laptops rather than as dedicated handheld TVs.
Earlier this month, FLO TV, a subsidiary of chipmaker Qualcomm, announced plans to shut down its consumer-direct service, likely in the spring, because of the slow adoption pace and the high cost of marketing, customer service, product development, and customer acquisition, a source close to the company said.
No decisions have yet been made about the future of FLO TV’s white-label service under which cellular carriers Verizon Wireless and AT&T buy the service on a wholesale basis for resale with select handsets.