|Wireless service uses technology by Qualcomm|
By Jennifer Davies
UNION-TRIBUNE STAFF WRITER
April 18, 2008
This revolution will be televised, but you might have to squint to see it.
That's because you can now watch TV, real TV shows such as “CSI,” “30 Rock” or MTV's “The Hills,” on your cell phone.
EDUARDO CONTRERAS / Union-Tribune
Verizon Wireless and Qualcomm are hoping television and cell phones are a match.
Verizon Wireless, using Qualcomm's MediaFlo technology, yesterday launched a service that provides live TV on cell phones in San Diego. It is the 58th market to have access to Verizon's V Cast Mobile TV service, which was first rolled out more than a year ago.
The service, which costs between $13 and $25 a month, allows Verizon subscribers to watch live programming from a variety of networks, including NBC, CBS, ESPN, MTV, Fox and Nickelodeon.
Unlike other services, Verizon's V Cast Mobile TV service is not merely short video clips downloaded to a cell phone. Rather it is an actual TV broadcast in which viewers can see sporting events such as March Madness and the U.S. Open play out in real time.
“When you are out and about, you don't have to miss that last-minute shot,” said Paul Jacobs, Qualcomm's chief executive.
The question is whether people will really want to watch, say, Kansas take the NCAA basketball championship into overtime against Memphis on a two-inch cell-phone screen.
EDUARDO CONTRERAS / Union-Tribune
Some wireless industry analysts are skeptical that there will be great demand for cell phone television.
Some analysts are skeptical.
Michael King, who covers the wireless industry for Gartner Group, a research firm, said he's unsure if there is real demand for this type of service.
While subscribers in South Korea and Japan have quickly adopted the mobile-TV technology, U.S. consumers have been less enthusiastic. Verizon declined to provide V Cast subscriber numbers, but King said he believes the results to date have been “disappointing.”
“Suffice to say, they've faced some real challenges in its adoption,” King said.
Among those challenges are the limited number of phones that receive Verizon's Mobile TV as well as the cost of the service itself. Currently, only four of Verizon's phone models can get the live TV programming, including the LG Voyager, which retails for $350, as well as less expensive models such as the Motorola RIZR, which retails for $129, after a $50 rebate.
Gina Lombardi, president of Qualcomm's MediaFlo USA subsidiary, said the service has been researched extensively, using focus groups totaling about 4,000 people. The lessons from those focus groups were that people would watch from 30 minutes to an hour of live programming on their cell phones.
While not a big TV watcher, Jacobs said he has become addicted to TV on his mobile phone, keeping it tuned to financial channels while in his office. He said he has regretted that friends and fellow San Diegans have had to wait so long for the service.
Qualcomm typically likes to launch its new technologies on its home turf, but several technical problems delayed the local launch.
The MediaFlo technology works much the same way that regular television does, beaming signals to multiple devices at once, using 50,000-watt transmitters mounted on towers and tall buildings.
AdvertisementFor the service to work, existing television stations using UHF channel 55 had to vacate that spectrum, something that was difficult in San Diego because two stations were using it, Jacobs said.
He said San Diegans will be attracted to the MediaFlo service, which is not the herky-jerky movements of much of the previous video offered on cell phones but rather actual TV broadcasts – fluid and watchable despite the screen size.
“It really changes your expectations,” he said.
Qualcomm and other wireless companies hope that those raised expectations will translate into big business for them. The San Diego wireless giant has bet big on MediaFlo, investing more than $800 million on the technology and the airwaves needed to transmit the broadcast signals. In addition to Verizon, AT&T plans to use MediaFlo to offer mobile TV service beginning next month.
Mark McKechnie, a financial analyst who covers Qualcomm for American Technology Research, said AT&T's launch could help spur more demand because it could create a pricing and marketing battle.
“We've certainly seen those dynamics before,” he said.
Also, local television stations, whose programming is not currently available on the mobile TV services, are looking to broadcast to cell phones as well. This week at the National Broadcasters Association meeting in Las Vegas, owners of more than 800 local stations said they are considering different standards for sending local TV signals to mobile devices.
While that might sound like competition for Qualcomm, Jacobs said it's actually a benefit for the company because it will pump up demand by offering more viewing options. Higher demand for TV-enabled cell phones means more sales of Qualcomm cell phone chips and more revenue for the company.
To provide the local content, Qualcomm would only need an additional radio chip to pick up the broadcast signal.
Still, the business models for the local broadcasters and for Qualcomm are decidedly different.
Qualcomm's MediaFlo makes its money through deals with national networks such as Comedy Central and NBC and then selling its service to companies such as Verizon at a wholesale rate. In turn, Verizon makes money by charging consumers a retail price.
Local broadcasters, which have seen their traditional advertising revenue shrink, hope that providing their content on mobile devices might help them increase their audiences.
That brings another issue with mobile TV to the forefront: do cell phone users really want to watch commercials? Lombardi said studies are trying to determine how many ads can be shown without users turning off the service.
But make no mistake about it.
“It's television. There are going to be commercials,” Lombardi said.