The US Mobile TV Wars

BusinessWeek has a good post about the mobile TV wars in the US, which it says has come down to MediaFLO vs MobiTV. I think it’s a bit early to write off any other entrants…HiWire still has its toe in the water even if it isn’t blustering about its business, and it’s still early enough that a new entrant might come in and take a dominant role. But at the moment, it mainly is MediaFLO vs MobiTV. “A service like MobiTV is cheaper for both carriers and users. While MediaFlo requires the purchase of special handsets that can pick up both cellular and TV broadcast signals — so far, Verizon Wireless only offers two — MobiTV works on some 175 cell-phone models. It also streams programs over the same network a carrier uses to connect wireless calls, cutting out the cost of a separate infrastructure” writes BusinessWeek. This is true as far as it goes, but as customer numbers increase the economics will reverse, and the MediaFLO broadcast system will become cheaper per customer than the MobiTV over–the-network system. It will need a lot of scale though — some back of the envelope calculations by BusinessWeek shows Qualcomm receiving $36 million for this year from 300,000 MediaFLO subscribers, compared to $800 million for building the network and $95 million in its previous quarter to deliver MediaFLO in just 32 of its planned markets. That means it would need about 3.17 million paying customers to cover its current op-ex, which is just over 1 percent of the US population so the potential is there.

Another figure, from Telephia, estimates that mobile TV revenues totaled $146 million in the first quarter, approaching the $168 million generated by mobile video games. “The mobile video business is catching up to businesses that have been around a while,” reckons Telephia.

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