Watch all red carpet interviews from Streaming Media West in San Jose.
We all remember the TV commercials reminding us to pick up our digital converter boxes before the FCC made the switch from analog to digital. Originally scheduled for February 17th, 2009, the full conversion happened by June 12, 2009.
Did you ever wonder what happened to the spectrum that was used for old (by old I mean last year) analog television before the digital conversion?
Qualcomm was one company that purchased the newly vacated spectrum from the government. In many of the largest national markets Qualcomm purchased channel 55 (716 – 722 MHz) and channel 56 (722 – 728 MHz) spectrum.
Channel 56 has special meaning for me. I remember watching Creature Double Feature, cartoons such as GI Joe, and Celtics games on channel 56 back before we had cable in Boston.
So why would Qualcomm, a maker of telecommunications gear and CDMA chip sets, want to buy spectrum typically used to deliver over the air television and radio? After all, it paid more than a billion dollars for a national broadcast footprint. It must have a business rationale for the investment.
It turns out they do have a business plan. Qualcomm wants to become a media aggregation and delivery company. With their spin out of FLO TV, Qualcomm is getting into the TV Everywhere game.
FLO TV is a mobile TV service that consumers can receive through either an AT&T or Verizon smart phone or, as of a few weeks ago, a FLO TV branded mobile device, about the size of a smart phone, purchased through Amazon, Radioshack or Best Buy.
The Verizon and AT&T devices have a FLO chip and antenna inside them that receive the signal from the FLO network. The software on the device then plays the stream and integrates it into their User interface/experience. In order to enable FLO on a device, AT&T and Verizon need to add an antenna (to pick-up the UHF signal), a filter to not interfere, and a chip that has the FLO technology in it. Then they need to work with FLO and the device OEM (e.g., LG, Samsung, etc.) to integrate the software and User Experience.
FLO TV also just struck a deal with Chrysler and Audiovox, an after market installer, to deliver FLO TV service to kids in the back of every mini van in America. Kids don’t just have to watch Sponge Bob DVDs in the back seat anymore. They can also watch live episodes through Nickelodeon on a FLO TV screen, just like if they were sitting in the living room.
Kids today have it easy. The car trips of my youth were a much different experience. Epic family road trips as a kid is what put hair on my chest. I had to stare out the back window of the family station wagon on trips to New Hampshire so that my parents could drop me off at ski school for two days of skiing on ice in 30 below wind chill.
I had a chance to sit down with FLO TV CEO Bill Stone at the Streaming Media West conference in San Jose last week.
The company’s business model is to sell hardware and monthly subscription plans for small screen subscription video services. The company also allows mobile operators to sell the service on their devices and participates in the subscription revenue.
While advertising revenue is not envisioned as a large percentage of revenue, the company does get to sell a minute or two of ad space per half hour of network programming.
FLO also believes that interactive advertising will become the most engaging way to connect brands to consumers. Since FLO knows who is watching, it has improved targeting capabilities to deliver a Coke ad to me and a Diet coke ad to a woman. And thanks to two way data feeds, I can click on the Coke ad and receive a coupon, or respond to a survey.
Stone says, “FLO TV uses the cellular network (IP or SMS) for backchannel communication. Since 99% of the bandwidth is forward, the requirements to interact w/ the FLO network are very small. To the FLO device, we have some middleware from a company called OpenTV that sits between our system and the Content Providers. The middleware can insert ads during the right portions of the show and then interact w/ the show for voting, ads, etc. (click for more info, click to buy, click to SMS, etc.).”
Current content partners include CBS, NBC, ESPN, Fox, MTV Networks, MLB, NBA, NCAA College Football, PGA Masters, Comedy Central, Nickelodeon, MSNBC, Sony’s Crackle. The NFL can only be found on Sprint TV (white label MobiTV platform). FLO TV is also working with small production companies that are creating mobile short form content.
Content providers like the idea of new subscription-based distribution channels to monetize their assets.
While Stone won’t disclose subscriber targets, he did mention that scale is key as it doesn’t cost more to have a million subscribers on the network than one subscriber.
