After working together for years through a trade association, a dozen broadcasters are now forming a financially-backed joint venture to develop a national mobile service, including live and on-demand video, local and national news and entertainment from both TV and print companies.
The joint venture is upping the financial stakes in the mobile TV space, which has been dominated by MobiTV, and Qualcomm’s FLO TV subsidiary. It consists of: Belo (NYSE: BLC), Cox Media Group, E.W. Scripps (NYSE: SSP), Fox, Gannett (NYSE: GCI) Broadcasting, Hearst Television, ION Television, Media General (NYSE: MEG), Meredith (NYSE: MDP), NBC, Post-Newsweek Stations and Raycom Media. The plan is to pool spectrum together from Fox, NBC & Telemundo and ION to be able to reach about 150 million U.S. consumers. It requires commitments for content, marketing and capital.
The joint venture is escalating its mobile efforts following the passage of the FCC’s National Broadband Initiative, which proposes to reclaim some of the broadcasters’ spectrum for more mobile broadband networks. The broadcasters will have to move fast to prove to the FCC that the spectrum is being used to the nation’s benefit. In a release, the group said the venture “is designed to complement” the initiative by reducing congestion of the nation’s wireless broadband infrastructure. In other words, they are arguing that if they can offload video to broadcast spectrum from today’s mobile networks fewer new networks will have to be built.
The Open Mobile Video Coalition, which names these dozen broadcasters as members, along with over 800 TV stations, has been working for years to establish a national mobile TV standard. The goal is for broadcaster to be able to transmit the same TV signals that they do today to mobile devices, like phones, cars and portable consumer electronics, without much financial investment.
Yesterday, the Open Mobile Video Coalition provided an update on its efforts, saying that 45 stations have started providing mobile broadcasts. Washington D.C. kicks off on May 3 and two stations in Detroit will follow. But it will take awhile for consumers to start having capable devices of receiving the broadcast signal. The first available consumer device is the “Tivizen,” which was funded by broadcasters. The small device, built by Valups, receives mobile TV signals and then re-transmits them to WiFi devices, such as a laptop or mobile phone. It will cost $149 beginning in May and will be available on Amazon.com.
The broadcasters are clearly trying to position this offering as a way for the FCC to achieve its goals of increasing mobile broadband in the U.S. That may be a tough argument to win. The FCC says the U.S. is currently in a spectrum crisis, given the dramatic growth curve of smartphone usage. But John Wallace, President of NBC Local Media, argues: “This initiative offers a path for the next generation of video consumption, and will help the FCC in its goal of ensuring efficient and reliable broadband service for US consumers.”
The group said more information would be released later in regards to a dedicated management team who would focus on “securing additional content, spectrum and distribution partnerships for the venture.”
This doesn’t necessarily pose a new threat to either Qualcomm’s FLO TV or MobiTV since the broadcasters have been working for a number of years on a plan to roll out mobile TV services. In fact. all three providers have their own set of challenges. FLO TV has recently launched its own branded service after relying on Verizon Wireless and AT&T (NYSE: T) for years to resell the service on a handful of phones. And while it has done a good job of securing rights to a lot of content, it still has major gaps, such as rights to the Super Bowl or the local news. In contrast, these broadcasters in the joint venture will benefit from having the rights to local content, but will clearly have to work together to secure national feeds. Both FLO and the joint venture will have to get new devices into the hands of consumers in order for them to receive a TV signal. That’s one of the biggest benefits for MobiTV. Its service is streamed over the mobile network, so as long as the network is not congested, any subscriber can watch content.