The Golden Age of Take-Out
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In the late 1940s, still a time when many people didn't have televisions in their homes, David Sarnoff, the chairman of RCA, appeared on NBC — RCA's fledgling television network — to promote the emerging medium and to introduce an RCA scientist, Vladimir Zworykin, as the inventor of television.
But, notwithstanding any of Zworykin's other accomplishments related to television science, the real inventor of television was Philo Farnsworth, a Utah farm boy who devised the concept prior to 1920 while he was still a teenager, but spent many years fighting RCA in court over television-related patents.
For most of the history of television, arguably the most influential invention of the 20th century, Philo Farnsworth's name has been not much more than a footnote to what has become a multibillion-dollar industry.
The innovative minds behind MobiTV hope to avoid such ignominy.
The wireless industry is in the earliest phases of recreating the mobile phone as a TV. As surreal as that notion might have seemed a few years ago, mobile carriers, entertainment companies, mobile vendors and advertising firms are all intensely evaluating the concept and preparing to mold strategies around it. In Asia and Europe, mobile video services have enjoyed varying degrees of success to date.
In the U.S. market, one of the most visible signs of that evolution is the broad acceptance of MobiTV, the increasingly well-known solution from the much-lesser-known Idetic, a 6-year-old Berkeley, Calif., company.
Sprint initially used MobiTV last year to offer existing TV content on mobile devices, and more recently, Cingular Wireless and Midwest Wireless deployed the service. It currently allows carriers to offer more than 20 channels, including Fox, ABC, C-SPAN, several NBC-owned channels and other content, to users with video-enabled mobile phones.
Idetic's success in winning support from both mobile carriers and the entertainment industry has helped grease the wheels for other innovators of mobile video delivery architectures and applications. For instance, Verizon Wireless and Fox Entertainment Group recently launched the first “mobisodes,” original TV-like content and new content related to existing TV shows (Fox's “24,” for example), but developed specifically for delivery to mobile devices (see Telephony, Jan. 31, page 6). Also, Qualcomm announced late last year that it is building a nationwide multimedia broadcast network dedicated to delivering TV-based and original content to mobile users (see Telephony, Nov. 8, 2004).
But in an embryonic and rapidly evolving market for mobile video, these developments from bigger firms also could threaten the ongoing viability of MobiTV. Carriers still seem to be in an information-gathering mode of determining customer behavior patterns, figuring out how they should market and price a TV service and what kind of future that service has.
All in all, it's an exciting and turbulent set of circumstances churned up by a little company that never originally intended to bring TV to the mobile universe. Though the company has seen its MobiTV solution adopted by two national carriers and one regional carrier in less than 18 months since its commercial introduction, MobiTV's market birth was more like a long-form test of character, patience and ingenuity.
“We came to the business a little bit backwards,” said Phillip Alvelda, chairman, CEO and co-founder of Idetic.
In 1999, the company was pursuing a different but related path to the mobile multimedia future. It had developed software to help mobile carriers improve their ability to deliver and manage rich multimedia applications, which the company assumed there would be plenty of with carriers planning network upgrades to support broader bandwidth.
“But, we ended up solving a problem that didn't exist,” Alvelda said. “There was no rich media being delivered at that time. So we asked ourselves, ‘How can we help create the problem that we have already solved?”
Idetic found itself waist-deep in the mobile content conundrum. Developers of rich content applications were too often small, unknown companies with no links to the mobile industry, and mobile carriers were hesitant to commit to applications from small third-party sources that they were afraid might flop after they invested in them on a mass-market scale.
The Idetic team decided it might be less risky to work with a form of content that already had a huge, established audience and was easy to understand — TV programming.
“We extended our technology so it would be capable of linking to broadcast TV — the content that was already out there and successful,” Alvelda said. “Carriers said that was a great idea, but that they didn't know how to get at that content” because they didn't have entertainment industry connections or an understanding of the industry itself.
“We were at this point where we couldn't sell a damn thing,” he said. Making another go at it, Idetic hired many people with entertainment industry experience to help the company establish relationships with companies in the television industry to get the licenses to distribute their content on mobile handsets.
But, even after Idetic did that, the company still had to build its own network and gateway architecture to bring live TV signals into a gateway GPRS service node on a carrier's wireless network for delivery to the user handset.
“It was unlike any service they had supported before, so we had to do these things to get it going,” Alvelda said. “We went and told the carriers that we had solved all these problems, and that's when it finally took off.”
The mobile carriers deploying Mobi-TV don't pretend to know more than they actually do know about mobile TV services — and they are more than willing to admit they don't know much, at least not yet. Cingular Wireless, which launched MobiTV service over both EDGE and GPRS network facilities two months ago, initially conducted a quiet, low-profile test of MobiTV after seeing the user interest that fellow national carrier Sprint garnered for its MobiTV launch, said Jim Ryan, vice president of product management for Cingular.
“To be honest, some of our biggest challenges in some markets are that we don't really know what kinds of new services the customers want — but they don't know either,” Ryan said.
The benefit of the MobiTV solution, he said, is that Cingular was able to launch it quickly over multiple handsets without an extreme network makeover. The company can now evaluate the service while it's running live and decide whether or not it works without worrying about getting a return on a major investment.
So far, what Cingular has learned is that MobiTV is attractive to two of Cingular's most appealing market niches — young adult users and power users with mostly mobile lifestyles. The first audience tends to use the service at night and mostly for entertainment purposes, while the second accesses it more frequently during the day to surf news and information channels.
Midwest Wireless, a regional carrier based in Mankato, Minn., has had a similar experience since it launched MobiTV a few months ago. Though Midwest Wireless started with a soft launch — providing a MobiTV icon in its BREW applications catalog, but not further promoting the service — the carrier saw a strong response from the “upper teen and young adult markets,” said Scott Bergs, chief operating officer of Midwest Wireless. “That's how they want to get a lot of their entertainment and information.”
While Cingular and Midwest Wireless share a positive attitude about MobiTV thus far, they also both recognize that they are only at the beginning of a wide-open evolution that could take them far away from the mobile TV services they offer today.
“There's an absolutely undefined opportunity set before us,” Ryan said. “What we know now is that a growing number of people are interested in these services.”
Bergs said that while the future market penetration of MobiTV remains to be seen, the company believes it might be at the beginning of a strategy that ultimately could evolve to a stage where Midwest Wireless will develop or partner with other companies to develop its own locally flavored programming.
Ryan said Cingular also plans to evaluate opportunities to offer original programming in addition to re-purposed TV programming.
“The jury is pretty much still out on how much of a hit that will be,” he said. “Mobile is a distinct medium, and you have to believe that eventually, people won't pay only to watch regular TV shows on their phones.”
If more mega-partnerships between national carriers and Hollywood studios can produce mobile-specific programming that pays off, it could make what's on MobiTV now seem like re-runs by comparison. Similarly, while these pairings could apply market pressure to Idetic's live-TV content model for MobiTV, the small company could be getting squeezed on the network side by Qualcomm's ambitions for the MediaFLO network.
But, Alvelda doesn't feel painted into a corner. “There's room for all kinds of content — from TV and original,” he said. “You don't really know at this point which one will be the hit. The big lesson of TV is that you need something for everyone.”
And regarding Qualcomm's plans, he added, “MediaFLO is something we're terrifically excited about, to see that sort of new infrastructure. That will help lower prices. Those are the things that need to happen to make this a mature industry. What could MediaFLO do for our operation? We have to be very careful. We're a mouse in this industry, but we're a useful mouse, and we want to remain useful.”
But, industries aren't so kind to mice. To be fair to Philo Farnsworth, he hasn't been forgotten. Several biographies in recent years and a fictionalized characterization in the novel “Carter Beats the Devil” have helped ensure that. But, he also never was able to influence the direction his technology took and, by many published accounts, never comprehended its potential value as an entertainment medium.
Idetic may understand better how MobiTV could potentially be used. Alvelda believes that most mobile handsets will evolve to include TV buttons and that traditional TV advertising will evolve to take advantage of the mobile format.
“Soon, we'll be talking about cellular phones passed, rather than homes passed,” he said.
Heidi Lehman, vice president of Third Stream Media, a marketing agency targeting mobile content publishers, agreed.
“There are a lot of advertisers that feel mobile video will be a killer app,” she said, adding that mobile-specific TV programming such as mobisodes offer major brands an opportunity for product placements.
She also said that mobile TV service eventually could benefit from mobile-specific advertising content. “If the price of the service was lower because it was partially supported by ads, that would be great.”
Cingular's Ryan, whose company prices MobiTV at $9.95 per month, is less certain of that idea, suggesting mobile consumers might not want specialized mobile advertising and that turning mobile TV into a service supported by advertising could unnecessarily convolute an economic scenario that already seems to have a bright future.
“We're making money,” Ryan said. “We don't see any reason to change the model.”
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© 2008 Penton Media Inc.












