MediaFLO USA Inc. is locking up high-profile content deals and shifting into overdrive as it nears its service launch with AT&T Mobility. Meanwhile, its would-be competitors remain in idle as they work to lock up their first carrier customers.
While the subsidiary of Qualcomm Inc. is only a few months away from its second nationwide deployment, Aloha Partners L.P. and Crown Castle International Corp. are struggling to move beyond the experimental stage. Aloha is partnering with T-Mobile USA to test its HiWire service in Las Vegas this summer; earlier this year, 138 users took Crown Castle’s Modeo offering on a six-week test drive in New York. But only three major operators remain in play: Alltel, Sprint Nextel Corp. and T-Mobile have yet to commit to a dedicated multimedia network, and it’s quite possible that one or more of them may opt not to use any sort of dedicated multimedia network.
So while its competitors flail, MediaFLO threatens to run the table.
“In the U.S. market, as of now, MediaFLO is on the verge of running away with the market,” said Vinod Valloppillil, VP of product marketing for Roundbox Inc. “They’ve created a platform that is very open, very friendly” for carriers.
Roundbox develops mobile broadcast software and supports MediaFLO but also is a member of the Mobile DTV Alliance, which supports DVB-H-the technology used by HiWire and Modeo. While DVB-H is gaining ground in overseas markets, it faces an uphill battle here, according to Valloppillil. Bagging just one of the three remaining carriers in play may not be enough to save HiWire or Modeo.
“Unless you have a minimum scale of customer commitments, you can’t finance your buildout,” Valloppillil said. “T-Mobile’s commitment may not be enough; Sprint’s may not be enough.”
Alternatives
As mobile video begins to get legs, however, wireless service providers may opt to partner with two or even three multimedia network operators in an effort to broaden their content offerings. What’s more, Aloha and Crown Castle could look outside the wireless industry to find partners. Computer manufacturers could install receivers in their laptops, for instance, allowing users to access video on the go with the added bonus of full-screen viewing. Carmakers could try to lure customers by delivering mobile broadcasts to in-dash video screens, similar to the arrangement between General Motors Corp. and XM Satellite Radio.
Modeo President Michael Ramke said earlier this year that his company had ruled out launching without a partner and was looking to strike a deal not just with mobile operators but satellite or cable TV operators. And while MediaFLO has inked some impressive deals to deliver exclusive premieres, there’s no shortage of familiar content from its competitors: HiWire has teamed with satellite firm SES Americom, a major player in the satellite and cable TV distribution space, while Modeo’s trial showcased offerings from Discovery, E!, Fox News, Fox Sports and MSNBC.
But while adding a receiver to a laptop or even installing an in-dash TV to cars may not be prohibitively expensive-a chip can be added to a computer for just a few dollars-building out a nationwide network requires a massive investment. MediaFLO is spending $800 million on its infrastructure, and Crown Castle and Aloha Partners each have said they’ll spend $500 million on their networks. Without a carrier somewhere in the value chain, it’s unlikely a TV provider will pony up, according to Michelle Abraham, a principal analyst with In-Stat.
“The cable operators are certainly looking to be able to have a mobile-phone offering as well as the traditional voice and data that make up a triple play,” Abraham said. “But I would think that just the separate mobile video, without enabling mobile voice and data features, would not be of as much interest to them.”
So MediaFLO’s competitors have effectively stopped spending on their buildouts as they trial their services and try to find out what-and how-U.S. users will consume mobile video. Meanwhile, they’ll continue looking for partners with the bank accounts and distribution channels that can help build an infrastructure and bring their offerings to users across the country.
“They’re working to gain partners before moving forward with nationwide rollouts,” Abraham said. “It will be very tough to do without a cellular partner. You’d have to build out the network, and I don’t think either of those companies plans to do that unless they have a partner.”
