Mobile Video

Mobile TV Meandered at The Cable Show

LOS ANGELES -- The Cable Show -- As if the move to IP hasn't given cable enough of a complex, the industry is also grappling with the need to respond to wireless services, including mobile television. (See Cable MSOs Seeing the IP Video Light .)

So far, the response has been silence.

TV Everywhere was, of course, a popular buzzword here at last week's show, but there just wasn't a lot of activity or excitement around mobile TV. For an industry that has spent the good part of its existence downplaying mobile technologies they did not own, their muted enthusiasm is understandable, but probably not wise.

Even Cox Communications Inc. , which revealed some mobile handset plans for its wireless debut, noted that wireless video services aren't at the forefront of its near-term plans. Cox EVP and chief strategy and product officer Dallas Clement told a panel here that the MSO has witnessed only limited consumer interest in mobile video so far. (See Cox Mobilizes With Android & BREW .)

According to The Diffusion Group (TDG) contributing analyst Brian Platts, however, there is consumer interest in both mobile video and mobile TV. There just isn't an interest in a complex or expensive service. "I think [pay-TV providers] have to do it, because there is a latent demand out there," Platts says.

EchoStar makes a case for Slingin' it
Mobile TV is at least on Comcast Corp. (Nasdaq: CMCSA, CMCSK)'s mind. Sam Schwartz, president of converged products for the company, told The New York Times that it will complement its newly introduced Xfinity mobile app with full TV watching on the iPad soon, but it has to work around technical issues with authentication first. (See To Xfinity... & Beyond!)

But, according to EchoStar Corp. LLC (Nasdaq: SATS) director of corporate communications Marc Lumpkin, this is the wrong battle to be fighting.

"Cable is looking at authentication, but that means you can only watch the programming they have [mobile] agreements for," Lumpkin said. EchoStar's goal is to get cable companies to instead adopt its "SlingLoaded" line of set-top boxes to bring all of a user's TV content to the mobile phone.

What it is pitching is an integrated box that creates a one-to-one secure relationship with each customer using it. This ensures that only paying subscribers are watching their content on-the-go, according to Lumpkin. With the Sling software integrated in existing STBs, cablers can offer a version of TV Everywhere out the gate. (See Dish Starts Selling 'Sling-Loaded' HD-DVR , Cable Show 2010: The Hot List, EchoStar: We're Cable's Answer , and EchoStar Gains Foothold at Unitymedia.)

Lumpkin said the industry is overcoming its collective hesitancy around EchoStar's close ties with Dish Network LLC (Nasdaq: DISH), and that SlingLoaded boxes are starting to gain traction in the Tier 2 and Tier 3 MSO crowd.

"It took Pace plc eight years to break into cable," Lumpkin said, referring to EchoStar's favorite target and one that has managed to challenge the traditional US set-top duopoly of Motorola Inc. (NYSE: MOT) and Cisco Systems Inc. (Nasdaq: CSCO). "We've been at it two years and expect to announce our first North American customer before the end of the year."

SeaChange pushes for screen irrelevancy
SeaChange International Inc. (Nasdaq: SEAC) was another company hoping to make the screen irrelevant, but from the software side.

In 2008, it acquired Mobix Interactive , a UK-based company that powers software to offer royalty-protected content on mobile phones. Damian Mulcock, Mobix's CEO, said that as long as the content is protected, operators can roll it out on any device. SeaChange says it can support all the protocols for streaming, including Flash and HTML 5, and support any handset of mobile display, including the iPad. (See SeaChange’s Changes Come in Waves .)

"The devices are getting better, broadband is proliferating and content owners are coming around," Mulcock said. "For MSOs, it's a sticky way to interact with consumers."

What's the hold-up?
Mulcock's stance is that content should be licensed to the subscriber, not the device, but that's not the reality in today's market.

The hold-up isn't necessarily coming from the cable and telcos either. According to TDG's Platts, it's coming from another source -- the programmers.

Programmers charge the broadcasters a licensing fee to transmit their content, and they charge another to those who rebroadcast it, namely the cable or IPTV providers. Entering mobile into the equation would mean another licensing fee, since programmers don't want to give it away for free.

For new or renegotiated content deals, content owners will likely ensure that contracts include an additional licensing fee that allows distributors to bridge their content to the mobile world, Platts says. That's not necessarily a bad thing for cable companies, though. It just means they will likely have to charge for the service if they want to see any return on the investment.

TDG's studies show that consumers will pay $10 to $15 per month for a mobile-TV service, and that they will be more inclined to pay for it if the price is bundled in with their current pay-TV provider's service.

Some of the content owners are showing signs of coming around too. Turner Broadcasting System, for one, had a mobile presence at its booth, showcasing its content on a number of devices.

It may take a while to move from demos to actual deployments, but services in the US like MobiTV Inc. and Qualcomm Inc. (Nasdaq: QCOM)'s FLO TV are demonstrating that the consumer appetite is for content on the go is real. (See App Focus: MobiTV’s iPhone Streaming Success , Sprint Touts Cheap Mobile TV on WiMax & 3G , FLO TV Adds UFC PPV, FLO TV to Expand Its Offering, and CTIA 2010: Qualcomm's Tony Lutz.)

Making it real profitable, however, hinges on pricing and user experience, something cable operators could work through -- if the impetus is there.

"You need to give consumers choice," Platt says. "If you don't give them choice, they'll go and grab it themselves. They are much savvier, and they know what can be done... The message to all the service providers is, this is a good business for you, but don't screw it up for you by making it complicated."

— Sarah Reedy, Senior Reporter, Light Reading Mobile

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