ION’s “OMVION” mobile unit gaining ground

ION Media Networks’ new Open Mobile Ventures Corporation (OMVION) is a business unit dedicated to the research and development of portable, mobile and out-of-home transmission technology utilizing over-the-air digital television spectrum.

OMVION offers a vehicle for like-minded broadcasters to align R&D efforts in the advancement and standardization of TV spectrum-driven mobile applications with much higher bandwidth. ION Media recently initiated the formation of an Open Mobile Video Coalition, an association of leading broadcasters that are committed to driving the development of mobile digital broadcast television. The Coalition consists of broadcasters that include Belo, Fox Television Stations, Gannett, Gray TV, ION Media, the NBC & Telemundo TV Stations, Sinclair and Tribune.

OMVION is establishing three mobile DTV test centers in New York City, Tampa and Washington, D.C. for prototyping and development of mobile DTV and single frequency distributed networking technologies.
RBR/TVBR spoke with ION Media President and CEO Brandon Burgess and David Glenn, ION’s President of Engineering.

The overview

Glenn tells us OMVION has started to draw the attention of other industry companies as well as broadcasters. “Broadcasters are looking for business opportunities for television to become mobile as opposed to strictly an in-home theater environment.

As you know the rest of the world is beginning to explore this, and it is spreading fairly quickly with video to other devices such as in cars.

We have done some research and it’s surprising the number of video displays being incorporated into mobile vehicles, trains and buses, etc. That’s a first step, with the PDA cellular phone type devices coming right behind. We had been interested in mobile video distribution and looking for opportunities to monetize some of the spectrum.

After several phone calls from a multiple of venture capitalists and a couple of meetings, it was actually Brandon’s idea to launch OMVION. We’d already been talking with some of the manufacturers, but launching OMVION was a way for us to get the ball rolling. Subsequently, we learned that one of the primary venture capitalists that we’ve been dealing with has been selected by Samsung to be the tuner chip manufacturer for their mobile handheld devices. So this is becoming a very good opportunity for broadcasters, and we have several station group owners and one TV network that agree with us.”

OMVION will work with other broadcasters and manufacturer to allow content of any type to be distributed to stationary or mobile devices from pedestrian speeds of a couple mph up to high speeds in excess of 70 mph. You can deliver any content—video, audio, Internet content, stock exchange information, etc.

What are you offering to local broadcasters, existing carriers and equipment manufacturers?

“It has to be a collective effort in our opinion,” says Glenn. “We’re not trying to sell devices. They are not going to be coming to us looking for devices. We want the carriers, the CE manufacturers and the content providers to all collectively work together on this and agree to pursue the business opportunities that are out there.”

New chip needed

The new technology will require a new chip to be installed in handheld devices that will receive the spectrum or frequencies needed to carry the over-the-air content. The good news is the infrastructure is already built. Broadcasters already have the towers and the delivery systems in place. “It’s a minimal change to your broadcast plan to be able to incorporate the data that is capable of being received in the mobile and handheld environment,” explained Glenn. “The turnaround time for a typical cellular device is about 18-months. Most of the new devices that are coming out now already have displays built in them in one form or another. All we need are the receiver and the decoder which can be one chip or two separate chips that are very small low-power consumption devices incorporated into these displays or handsets.”

So that’s actually a big leap. “It actually is and it’s moving things in the right direction,” says Glenn. “In addition to the Samsung, I’m sure you’re aware of the LG-Harris initiative where they have their own technology that they haven’t released a lot of information about. OMVION and a lot of the other broadcasters are hoping they could find a way to work together and utilize the technologies that they have and build it into one system as opposed to two separate systems. That would move things along much quicker because they’re big powerhouses when it comes to consumer devices.”

It’s the network…

ION is planning on putting a system on as many of its own broadcast towers around the country as it can, using its own spectrum. But to make it successful, market-wide, other stations’ towers will likely be needed as well, creating a network similar to cellular coverage, so to speak.

“Exactly,” explains Glenn. ‘And that’s one of the concepts that we have been talking about to other broadcasters who are very receptive to it. It’s easy to do a cellular type network. The technology is already there. We just need to incorporate it. We feel there is an average of 30 megabits of data available within each market that the broadcasters currently own and are not utilizing to their potential. Even groups that want to use the full 19.4 megabits of their data stream for the home theater environment will have the opportunity to go to other local broadcasters within the market that don’t have the HD content to put on their digital stream. They have a lot of excess capacity. They can make joint service agreements with them or carriage agreement and actually utilize somebody else’s spectrum to put their programming on. This seems to have peaked some interest.”

More robust?

What about OMVION’s broadband capability as far as throughput versus established broadband networks? What about the cost differential and actual ability to carry more content at faster speeds? Is that one of the biggest selling points?

“Yes and yes,” claims Burgess. “One of the benefits is that there is already a lot of infrastructure in place. Really 90% of the infrastructure that is needed to provide pretty much nationwide coverage by broadcasters is already in place as we sit here today. There are some very tiny things that in theory would have to be developed at the local station from a transmission standpoint to enable the mobile transmission. Then obviously there is a lot of development work that has to happen at the receiver side, at the device side. That is the real benefit. In other words if you start up a completely new system such as the satellite radio companies have very painfully had to experience and as Qualcomm is going at a carefully very painfully going to experience when you have to put out two, three billion dollars to build infrastructure that puts a huge burden on the business plan. One of the benefits is that the infrastructure is largely there on the transmission side. The spectrum therefore is very efficient and very inexpensive to operate. The incremental cost is very modest and there is a lot of capacity available—not necessarily for individual broadcasters but if a couple of like minor broadcasters get together and pool unused spectrum. Even though it may be on different frequencies, most of it is going to be UHF bands and the receivers would have to be built such that it can seamlessly detect various UHF frequencies within the market.”

The advantage truly is a stronger more robust signal with higher throughput. More broadband capabilities; faster download speeds that sort of a thing. Is that really one of the biggest selling points that you’re offering?

“Yes, at a much lower cost,” says Burgess.

Working with existing carriers

Is OMVION aiming to set up a whole new Sprint or Verizon Broadband Service? No, they see themselves as a much better service provider to distribute video for them. Why? They don’t have the capacity to take it to the next level via cell towers, explains Burgess: “If you, Dave and I had a phone and we were all standing near the local cell here and we would all watch video on our phone, we’d shut down the cell because they don’t have enough capacity.”

So this totally changes it?

“It totally changes it because the way the carriers make their money is off of point-to-point voice communication, Burgess added. “That’s so they can charge you fifty cents a minute and that’s where they make money. If they allocate bandwidth to put through video for which no one is paying a sub fee it’s not going to be economic for them. We have a whole analysis on that where it costs cellular carriers something like billions of dollars okay for that zip code to deliver one hour of video.”

According to the research that their consultant, did the cellular ROI for their bandwidth for an hour of programming at a $10.00 charge per film is the return is four cents. Making four cents off of consuming that bandwidth as opposed to what they would make off of text message and over cellular service.

Revenue estimates

What about revenue and subscriber estimates? Have you protracted out that far about any estimates for say a local broadcaster?

Says Burgess: “This is in an early strategic planning phase. We have not gone into market-by-market business plans.

We’re trying to put a prospect out there for how big the market could be once we solve the technology issue. The numbers we come up with depend on which mobile universe we think we’ll be ultimately able to reach which, in turn, is a function of what your technology solution is going to be. You can only make definitive business plans once you know what the addressable universe of devices is going to come out of the technology solution.

The big dividing line between those devices is going to be which have large built in power sources versus which devices are battery driven. Battery life is going to be a factor; power consumption is going to be a factor.
Ultimately the question is going to be how far up the food chain are you going to be able to go on a mobile basis when technology shakes out. Are you going to be able to reach every single cell phone? Then you’ve gotten 100% of the addressable market, which is a huge number of devices. I think we came up
with something like 300 or 400 million dollars of potentially addressable universe when you include the cars and all the phones and all the mobile devices. If you are limited, either because of reach or power consumption, those sorts of things, you may only get the vehicles and the laptops and all those devices with a higher battery capacity.

We think either way even if you just get the basic addressable universe the revenue potential is in the billions of dollars as opposed to the hundreds of millions of dollars over time. If you get to the full universe, meaning including mobile devices, it’s probably in the mid single digit billions of revenue. We assume that that would be composed of a sizable portion of advertising revenue and some portion of subscription.”

ION Media station participation

What about the rollout plans for your own transmitters? Have you planned to have just about every ION television having this capability within say one to three years? I know you’re rolling it now for broadcasters, but for your own stations what are the plans?

“For our own stations the plan first has to be the industry rallied around this idea so we can standardize the technology,” says Burgess. “So the real question you’re asking is when do we think the technology will be ready? And I would say a one to two year timeframe would be our hope. Once the technology is available and if and only if the industry is adopting it, then we would assume that we would have the capability in all of our markets. I would be a little more skeptical if the industry as a whole did not come together on it because I’m not so sure that any one or two companies alone can build a robust system around this idea.”

A good thing for OMVION is the forced move to digital and UHF spectrum in 2009 is those frequencies are much better for the system to work well than VHF. The higher UHF frequencies punch through buildings and other ground clutter better than VHF spectrum.

In cars and trucks

What’s really going to be key is when the automakers roll out IP addresses in every vehicle. Ford’s new F-150 Truck has an IP address with a computer screen that can stream audio and video and access the internet completely.

“Well we see the auto industry potentially as one of our earlier partners,” explains Burgess. “You know once the technologies were to come around, auto is a great device for this. Some of the coalition members are talking with them. We haven’t personally geared up on that front, but that’s just been a resource issue and clearly a discussion we need to have.”

This isn’t all about ION making money. It’s about everybody making money and doing something that needs to be done in the industry. Something like this needs to be done to really bring video content delivery to the next level where it can be better monetized.

Burgess concludes, “Yes, well this is one of those where all ships rise with the tide and if you fight it you’re not going to get there. So we really think the industry has to come together on this one.”

Editor's note: This is archived from 5/07