Last Tuesday, Web outlet paidContent.com broke the story that Qualcomm was preparing to shut down its underperforming FLO TV business unit this coming December.
FLO TV, for those readers who’ve never heard of it (and that’s a large group, apparently), is a proprietary subscription mobile TV service that broadcasts nationwide on UHF channel 55. The service, also bundled as a ‘white label’ wholesale product to Verizon and AT&T subscribers, delivered several channels of TV programming specifically formatted for mobile and handheld devices.
Among the networks offered to FLO subscribers were Fox, CBS, NBC, ESPN, MTV, Nickelodeon, and CNN. The service first launched in 2006 as MediaFLO, and picked up Verizon (VCAST) and AT&T Mobile as re-sellers in 2007.
Unfortunately for Qualcomm, FLO never caught on with Verizon and AT&T customers. Customers didn’t care to watch movies and long-form programming on cell phones, opting instead for ‘snacking’ on news and sports clips.
The result was a decision to market the service directly to consumers in the summer of 2009, with big box stores including Best Buy and Radio Shack offering a 3.5” LCD FLO TV receiver for $250, along with a $9 per month service contract with a three-year commitment.
The total out-of-pocket expense to watch 12 channels of programming – $570 – was not appealing to potential customers, particularly with the new ATSC MH mobile digital TV service getting off the ground. Why pay all that money when you could potentially access thousands of digital TV stations across the country for free?
Another strike against FLO TV: It didn’t offer any local news, weather, and sports broadcasts, which are the three biggest drivers for mobile media consumption. To make matters worse, smart phones were already providing Web access to video content providers like Netflix and Hulu, not to mention Web podcasts of sports, news, and weather programming; all on a flat rate data plan that also included email access. That’s not a battle Qualcomm could hope to win.
Ironically, FLO viewership numbers surged with ESPN’s coverage of the 2010 World Cup as the obituary was first being drafted back in June. But it was a case of too little, too late.
Qualcomm’s plans for what’s left of FLO TV and its nationwide network of over one hundred channel 55 TV transmitters (and in some markets, channel 56) aren’t clear yet. But there doesn’t seem to be a lot of hand-wringing coming from the San Diego corporate headquarters.
That’s because Qualcomm acquired the UHF spectrum relatively inexpensively earlier this decade, and now feels that the channels are worth at least $2 billion today, based on current spectrum auction results. So they can sell off their real estate and still pocket a nice piece of change for their efforts, which among other things included relocating (at Qualcomm’s expense) a few UHF TV stations broadcasting on channel 55 prior to the analog TV shut-down in June of 2009.
Is there a market for subscription-based mobile digital TV? It would appear not. And there’s no guarantee that the free MH services just getting off the ground will be sustainable, either.
But in a day and age of customers feeling they are being ‘nickel-and-dimed to death’ for cable and satellite TV, Internet access, cellular phone service, and landline telephone service, FLO TV never stood a chance.
Posted by Pete Putman, October 11, 2010 8:17 AM
About Pete PutmanPeter Putman is the president of ROAM Consulting L.L.C. His company provides training, marketing communications, and product testing/development services to manufacturers, dealers, and end-users of displays, display interfaces, and related products.
Pete edits and publishes HDTVexpert.com, a Web blog focused on digital TV, HDTV, and display technologies. He is also a columnist for Pro AV magazine, the leading trade publication for commercial AV systems integrators.