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5 Reasons FLO TV Failed

Qualcomm (s QCOM) announced Monday it was selling the spectrum it used for its FLO TV mobile video service to AT&T. (s T) The spectrum sale was long-expected, and came after Qualcomm announced it would shut down the FLO TV service next March. Few gave FLO TV much of a chance in establishing a foothold, but here are the top five reasons Qualcomm’s big bet on mobile TV failed to pan out:

Ahead of its time
FLO TV launched at a time when most consumers were still getting used to having the Internet on their mobile handsets, let alone viewing broadcast television. Unfortunately for Qualcomm, this was probably the biggest reason its mobile video aspirations failed. By the time media companies actually started streaming on other devices, FLO TV was an afterthought in consumers’ minds.

People don’t watch live TV on their phones
There are very, very few times when people watch TV on their phones; mobile viewing happens when people are stuck somewhere — like waiting for a plane or on public transportation — or when there’s an important sporting event going on that they can’t see anywhere else. Services like Netflix (s NFLX) and Hulu Plus have made their videos available on smartphones, but even those providers admit that viewing on mobile devices runs a distant third, behind viewing on connected devices like TVs and on PCs.

Users needed a dedicated device
You’d think that Qualcomm might have been able to capitalize on first-mover advantage when media companies began streaming on the iPhone (s AAPL) or Android (s GOOG) phones. But for many years, FLO TV was only available on dedicated devices, before becoming available on select AT&T phones. Even when consumer behavior changed, and mobile streaming became (more) mainstream, consumers realized they didn’t need another device for a single service.

The hardware and service were too expensive
In addition to buying a dedicated device, generally for about $200, FLO TV users were expected to pay $15 a month for use of the service. For many consumers, that was simply too much to ask, especially in a rough economy when they were already seeing their cable bills rise year after year. It seems that $10 a month is the breaking point for supplemental consumer video services. FLO TV eventually lowered its price, but by that point, it was too late.

Qualcomm isn’t a media company
Let’s be honest; Qualcomm’s core competency is in making mobile devices. It believed that it could create consumer demand for more of its mobile gadgets and chipsets by launching a new service that required its hardware. What didn’t register was that it would have to create a service that consumers would want to pay for. Qualcomm might have been better served by selling hardware used by different services as opposed to trying to run its own.

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  • 6 Responses to “5 Reasons FLO TV Failed”

    1. I pick up my kids at school and sitting outside of the school for about 1/2 hour, gave me alot of time to watch the Flo tv.
      While traveling, I stop to get coffee on the road and watch the flo tv. It passes the time and there was plenty of news channels to watch. A little Sponge Bob here and there never hurt anyone either.

    2. Flo Tv came in very handy for me,for a long time I was fraustraed with Sprint TV. Sprint has yet to improve on their tv programing. I pay a lot of money for their cell phone just to get only tv clips by numbers,or interviews from actors about their characters who cares. I’m not paying money for that junk.They have the nerve to charge you for each programs that doesn’t come with your package. Sprint is a Huge Rip Off when it comes to tv programing. I would rather pay the fee for the flo tv for the year and get full tv programs that I enjoy watching. If I miss a show on tv at home, I know I can watch my program on flo tv the following day. Flo Tv has one problem it freezes every now and but not nearly as bad like Sprint Tv. The parent company that decided to cancel flo tv on Feb 28,2011 your doing a disservice to me and anyone els who rely on this device.

    3. I think this was one of the best and most convient things to come out just as i bought mine i had it almost a month and i was gonna get my subscribition it was stopped and i am very upset.

    4. Ondastreet

      FLO was only intended to run on dedicated devices (including handsets) – as stated – then Qualcomm would sell the chips to convert the signal. The primary reason FLO failed was that there were not enough devices – primarily phones (Verizon & AT&T). The article is inaccurate in that it was VZW and ATT phones that first offered the services – not FLO-made “dedicated devices” – those devices were a last-gasp effort to supplement the non-existent phones – an effort that was way too little way too late. In retrospect, FLO should have had the carriers commit to a certain number of devices per year. VZW lost interest as FLO was trying to beef-up the network – they had little to lose by ignoring FLO, and the handset mfg’s had more effort to integrate the FLO chips into their offerings. No carrier requirements, no incentive and additional costs = no phones to contain the chip. By the time FLO decided to make their own devices it was too late and the devices were not compelling enough for anyone to care.

    5. It’s understandable that FLO-TV would fail at a time when many people are finding ways to cut their monthly bills and sometimes, the services themselves. People want to be able to do more with less, not more with more. Subscribers are learning that, although they may not always be able to get the same programming the networks offer, the alternatives are becoming more plentiful. Often they are free, just as entertaining and available on demand.

    6. I think it failed as their was too much cost to their model. In the UK is far more sustainable as it uses the internet and low quality streams for 3G. It defeats all the points you mention.

      As for the point that no one watches TV on their mobile, im aware that this is incorrect. It seems very popular in the UK.