The U.S. mobile TV business hit a milestone of sorts this week as Verizon Wireless launched its mobile-TV offering in 20 markets and pioneer mobile-TV company MobiTV said it has surpassed 2 million subscribers worldwide, about three-quarters of them in the U.S.
Verizon Wireless has been offering short video-on-demand clips on its V Cast service, but it now will show programs from TV networks including Fox, CBS, NBC, MTV and Comedy Central.
MediaFlo's living-room-quality TV
The programming will be broadcast using the MediaFlo technology developed by Qualcomm. Verizon Wireless has not indicated how many subscribers it expects to sign up for the service, which promises to deliver close to living-room-quality TV on the small screen.
Meanwhile, MobiTV's subscriber numbers have been building, growing to 500,000 two years after its launch in November 2003, and then to 1 million in April 2006. The number is only a fraction of the 220 million U.S. cell phone users, but marks the start of what is expected to be a big year for the nascent mobile TV media.
Is it a sign mobile TV is getting ready for prime time? "We're seeing an increasing demand for mobile TV," said Jeff Kagan, an independent wireless analyst. "The product is getting better and better."
Ross Rubin, director-industry analysis, NPD Group, said MobiTV's growth "bodes well since bandwidth is constrained at this point and the networks haven't been fully optimized." Others note that even though the Apple iPhone, launching in June, is not expected initially to have live mobile TV capabilities, it will have a large screen capable of viewing iTunes programs and will educate consumers about the use of a mobile device beyond making voice calls.
Is third-screen TV overhyped?
But not everyone is answering the call. At the National Association of Television Programming Executives conference in Las Vegas in January, a number of speakers bemoaned the dearth of cellphone users who were watching TV on the third screen and a Gartner report called mobile TV overhyped and at least 5 to 10 years away.
Still, consumers -- and marketers looking for mobile-phone opportunities -- will be learning more about the two current flavors of mobile TV. MobiTV is delivered to a cellphone from an individual cell tower much the way a voice signal is transmitted for a voice mobile-phone call. That's different from the MediaFlo plan, in which content is broadcast to many cellphones at once, similar to a cable operation.
MobiTV sells its service on Sprint and AT&T, previously Cingular Wireless. AT&T also plans to offer MediaFlo's service.
Channels and handsets
Julie Reynolds, senior marketing manager, for MediaFlo, said MediaFlo's first offering will have eight channels. Initially, Verizon has just two handsets capable of viewing MediaFlo. However, Ms. Reynolds said others will be added when AT&T offers the service. MediaFlo handsets require a specific Qualcomm chip not part of the great majority of handsets on the market.
Jack Hallahan, VP-advertising and brand partnerships at MobiTV, said his service has between 30 and 50 channels in the U.S. while more than a 100 handsets on the market can receive MobiTV.
Both MediaFlo and MobiTV stream live programming, which also include spots that aired on the shows. Like MobiTV -- and cable channels -- MediaFlo will be able to sell spots on its interstitial allotments. While MobiTV runs branded channels for marketers, MediaFlo initially has no plans to do so, Ms. Reynolds said.
Local and national ad buys
For marketers, Mr. Hallahan said, an ad buy on MediaFlo will be limited to less than a dozen markets, whereas MobiTV will offer national buys. The combination of a national and local buy would nearly duplicate the traditional TV situation, he said.
"Over time, marketers then can double down on national buys between the two sources," MobiTV and MediaFlo, he said. MobiTV also is offering a number of interactive options for marketers, by clicking to get a text message or be sent through to a mobile website, or by calling directly to a dealership or sales center.
Mr. Hallahan said MobiTV, based in Emeryville, Calif., with investors including Hearst Corp., will continue to be marketed primarily through wireless service providers such as Sprint that promote the product at their retail outlets during subscriber sign-ins and occasionally through their massive marketing blitzes. MobiTV does not have an advertising agency, but used AKQA in the past on a project basis.
Meanwhile, a third mobile TV competitor, Modeo, an affiliate of Crown Castle International Corp., has received Federal Communications Commission permission to start its live digital TV and audio to mobile devices.