Video vendors poised to pounce on MobiTV opportunityVideo vendors poised to pounce on MobiTV opportunity
'There's blood in the water,' says an exec with a video tech supplier that's considering opportunities with operators should MobiTV fail to emerge from a bankruptcy restructuring unscathed.
March 5, 2021
Several video tech and service vendors are sizing up potential partnerships and solutions for cable operators and telcos that could find themselves grasping for alternatives in the wake of MobiTV's voluntary bankruptcy filing.
While at least two suppliers have entertained thoughts about acquiring MobiTV's assets if they could be had for cents on the dollar, many others are exploring opportunities to create and integrate an alternative in tandem with tech partners and, possibly, with cable operators that are using MobiTV today, according to a group of execs with suppliers contacted this week by Light Reading. A big question at the moment is which suppliers would consider taking on the lead role in such an endeavor.
"There's blood in the water now … and a lot of discussion on who could fill the void," says an exec with a video streaming technology company.
"We're definitely interested … and putting together proposals," said another video tech exec. However, he also believes T-Mobile is likely in the catbird's seat if taking over MobiTV's business becomes a viable option.
But there's still much uncertainty about how big a void will be left to fill as MobiTV pushes ahead with what is expected to be a months-long restructuring process. That process could result in the sale of the company and its platform to a vendor or even a customer, such as T-Mobile, which has ponied up a $15.5 million loan to keep MobiTV operating through this process, a decision that will keep its own OTT-TV service, TVision, running.
That bridge loan should keep MobiTV operating through the summer and possibly into the early fall, a source familiar with the situation said. However, there are also fears in the US cable community that MobiTV will end up liquidating, a move that could leave its customers scrambling.
According to court filings, MobiTV has more than 125 business customers and provides TV content to more than 300,000 end-user subscribers. It's believed that T-Mobile's new TVision streaming service, which relaunched last November, represents more than 100,000 of them. Many other MobiTV end-user subs come way of independent cable operators that launched app-based pay-TV services via an agreement struck by MobiTV and the National Cable Television Cooperative (NCTC) in 2017.
Piecing together a video puzzle
To provide a comparable alternative to MobiTV, the parties would need to piece together and deliver a set of critical components: programming rights; a way to source all of the live TV feeds and VoD content; the processing, packaging and transporting of the video; an integrated billing and back-office platform; and partners that could provide and/or support streaming devices and develop and maintain the video apps that run on them.
That's a simplistic overview of what such a platform would need, but there's no shortage of suppliers that could play a role in completing the mosaic. Examples of companies that could provide pieces of that puzzle include Adara Technologies, Alticast, Ateme, Enghouse/Espial, Evolution Digital, Firstlight Media, Harmonic, Kaltura, MediaKind, Minerva, SeaChange International, Synamedia, TiVo, Vecima Networks and Velocix.
"Everyone is raising their hand to say, I can do it," said an exec with a video tech supplier that is sizing up the opportunity but has yet to create an internal team to explore it in earnest.
There might also be an opportunity for Comcast to seek out more X1 syndication deals while MobiTV is on the ropes. But it's unclear if Comcast's syndication pricing model for X1, which has led to deals with major operators such as Cox Communication and Rogers Communications, is capable of scaling down to the many smaller operators being served by MobiTV. Industry observers see significant involvement from Comcast in resolving the MobiTV situation as a long shot.
And even if a solution could be built, who would want to take on the responsibility of integrating and managing it all? That's unclear, though discussions between certain vendors are underway, sources said.
"It's not like flipping a switch," says an exec with a video tech supplier that's keeping a close eye on opportunities that might come out of the MobiTV situation.
Replicating the MobiTV model rife with financial challenges
An exec with another video tech company confirmed that it also has begun to explore a competitive technology solution to MobiTV's. However, the source adds that everyone would be faced with an insurmountable challenge if the goal is to build out a system under the business model that helped MobiTV not only win a bunch of deals, but also helped to plunge it into the financial morass it's in now.
"From the outside looking in, it looks like it could be a challenge to offer a competitive solution to MobiTV from a pricing standpoint. There are things that are fundamentally broken about MobiTV's business that's not something we'd be interested in," the person said. "But there are ways to replace the platform on a one-for-one basis from a technology standpoint."
According to multiple industry sources, MobiTV requires little to no upfront costs from its operator partners and provides service on a per-subscriber basis, but does not set any minimum requirements. That last piece has become troublesome because MobiTV also went through the process and expense of striking programming deals for national cable programming that is shipped to operator partners from its multi-tenant headend. Most video vendors contacted by Light Reading said they have little to no interest in taking on the financial risk of striking programming deals, but do see the potential of creating platforms that can take advantage of the programming distribution rights of the individual cable operators or telcos.
That appears to be the kind of approach that Adara Technologies is using for myCatapulTVe, a new app- and IP-based pay-TV and streaming video platform that, it claims, is tailored for the kind of tier 2/3 operators that are being served today by MobiTV. Adara's angle requires operators to purchase gear upfront along with per-subscriber fees, and sets up the IP delivery from the operator's headend rather than sourcing most of the content from a multi-tenant headend.
MobiTV's pitch to take and manage the whole video distribution side of the business was certainly attractive. "On the surface, it was a no-brainer" for smaller operators to work with MobiTV, said another supplier that's exploring the opportunity to pursue MobiTV's business. "MobiTV's learning that it's an opex-intensive business, even in an IP world."
Meanwhile, suppliers tell Light Reading that several MobiTV customers are likewise reaching out to them directly about alternatives should everything go south during MobiTV's restructuring process. Three sources said there's buzz about enlisting a large member of the NCTC to take on a centralized syndication role that could manage the organization's service provider members. But they also point out that this idea has been floated before and gotten little to no traction.
"The best situation that could occur is that an operator takes it over" in tandem with a group of suppliers that could underpin the new platform," said an exec with a video supplier that works with a wide range of MSOs.
Mum's the word at NCTC
Meanwhile, NCTC has not publicized its thinking about the MobiTV situation or offered comment on whether it's looking into alternatives at the moment. Light Reading has made such inquiries to NCTC for weeks, but has not received a formal comment.
Still, being able to roll up and support multiple operators from NCTC's membership onto a new platform would be critical in achieving the necessary scale to spread out the costs, as opposed to chasing small, one-off deals with operators that serve only hundreds or a few thousand subscribers.
"Some [operators] are so small … it's almost not worth the time in some cases," said an exec with a video tech supplier.
If anyone steps up to take over MobiTV's business, it's possible they will need to renegotiate the deals with minimum commitments to right the ship. "Without volumes, there's not enough recurring revenue to offset the costs to run it," said a person familiar with MobiTV's business model.
Of MobiTV's current partners, T-Mobile has some of the deepest pockets and, evidently, the financial fortitude to keep MobiTV running for the near term. It's also unclear if T-Mobile is keeping MobiTV afloat while it explores other alternatives.
But if T-Mobile ends up taking over the assets, it begs the question whether T-Mobile would continue to run that business as-is, and if MobiTV's other operator customers would be willing to retain T-Mobile as their pay-TV tech partner beyond the near-term.
Pivoting to OTT partners?
Then again, some MobiTV partners might have interest in striking a co-marketing deal for TVision. In fact, partnering with virtual multichannel video programing distributors (vMVPDs) has become increasingly commonplace for cable operators, and could be viewed as a more attractive option for some MSOs given the headaches that are being spawned by MobiTV's troubles.
The NCTC, as one example, has agreements with two vMVPDs: Philo and FuboTV. NCTC previously had a similar deal with Sony PlayStation Vue, which shut down in January 2020 (T-Mobile picked up some of PS Vue's programming rights and applied them to TVision).
Meanwhile, WideOpenWest promotes several vMVPDs, including YouTube TV, FuboTV, Philo and Sling TV, as it pushes a "broadband-first" strategy that will result in steepening pay-TV subscriber losses in the coming years.
One company that's taking advantage of this growing scenario is MyBundle.TV, a company that started out helping consumers research and create streaming bundles driven by content needs and preferences. MyBundle.TV more recently developed a subscription management platform for ISP partners based in part on affiliate relationships that it holds with dozens of individual streaming services. MyBundle.TV has already notched partnerships with several service providers, including WOW, C Spire and CenturyLink.
"Everybody is thinking broadband-first," Jason Cohen, co-founder of MyBundle.TV, said.
Light Reading will have much more detail about MyBundle.TV and its strategic focus with cable operators and other broadband service providers in a future story.
— Jeff Baumgartner, Senior Editor, Light Reading
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