Qualcomm’s FLO TV has been with Verizon Wireless since 2005. It hooked up with AT&T in 2007. After years of selling its services through those two carriers, FLO TV has finally fledged: The company is launching direct-to-consumer services.
The service, dubbed FLO TV Personal Television, will be launched in the fourth quarter – in time for the all-important holiday shopping season. FLO is also beefing up its device lineup with a smattering of gadgets sold through AT&T, Verizon and big box retailers like Best Buy. In addition, the company will be expanding its content offerings to include larger brands and original content.
The expansion effort addresses three key criticisms that have been lobbed at FLO TV since it became available: availability, devices and content.
“We didn’t have national coverage six months ago. We didn’t have a proliferation of devices six months ago. The content and pricing we have now wasn’t here six months ago,” says FLO TV President Bill Stone. “Now those enablers are in place… These are big changes that will really be catalysts to drive demand.”
ABI Research analyst Jeff Orr has been waiting for this development for some time. “I really want to see FLO in control of its own destiny, and with its initial market presence, they haven’t been in control,” he says. “If they go solo, there can be the opportunity to have a retail experience that shows off the service, shows handsets running mobile television. That really hasn’t been at the forefront of the partners’ marketing efforts.”
FLO TV’s partnerships – which it insists are fruitful – are really the least of its worries, though. The real issue is the mobile television industry as a whole, which has long been hampered by sluggish adoption with consumers.
For all the hype surrounding mobile television when it first emerged, consumers’ response to the technology has been tepid. Though FLO TV still can’t disclose subscriber figures for its carrier partners, the company admits sales of the service have been sluggish and are just starting to show a significant ramp.
The story is similar for mobile television provider MobiTV. Unlike FLO TV’s broadcast network, MobiTV runs over carriers’ networks. When it first launched on the Sprint network in 2003, the service was less than ideal: The network was just not cut out to handle such a high-bandwidth application.
As a result, it took MobiTV almost three years to get 1 million subscribers. Though that figure now stands at 7 million, it’s still a fraction of the U.S. market’s more than 200 million wireless subscribers.
Until today’s announcement, mobile television was only available in a select handful of markets, on a small number of devices, and provided a limited selection of content. For most consumers, it was easier to watch low-res YouTube videos than go through the hassle of signing up for a mobile television service.
FLO TV hopes that its spruced-up device line-up will change that, but Orr says there needs to be both a compelling use case and higher consumer consciousness of the service for mobile television to really take off.
“Everyone wants this to become part of what we do, but it’s not mainstream,” he says “It just doesn’t strike me as a significant trend in the U.S. right now.”
FLO’s goal is to populate small screens everywhere. It recently inked a deal with Audiovox for an in-vehicle entertainment system with live TV. The new service will be supplied to more than 12,000 new car dealers in 85 markets nationwide.
Though FLO TV’s Stone admitted in a previous interview with Wireless Week that its low profile with consumers posed a problem, he maintains that the company has a strong long-term value proposition – FLO TV is just way ahead of the curve.
“The good news about launching early is that we’re the only live broadcast delivery mechanism for mobile TV,” he said. “On the bad news side, we launched before we had ubiquitous coverage, devices, price value to consumers and content.”
The fact that FLO has its own broadcast network is strategically important for the company’s long-term success. Because it’s architected as a broadcast network instead of a wireless network, FLO’s service functions just fine whether there is one person watching or 1 million people watching. This gives FLO a leg up on competitors like MobiTV, which runs on carriers’ already-burdened networks.
That’s not to say that FLO TV is sweating about the competition. At this point, the mobile television market is so small that new companies coming into the field serve to grow awareness of the technology instead of threatening incumbent players.
“My goal is not to be king of the minnows,” Stone says. “At this moment in time, it’s really not about who’s competing with whom. It’s more about growing awareness of the technology. Once it’s out in the market and people know you can do it, I think you’re really growing a market that can support many different players – and we’re in the best position. We are truly the only mobile television company that has its own broadcast network.”
Filed Under: Infrastructure