Not enough subscribers for live mobile television? Well, Qualcomm CEO Paul Jacobs says the company is debating the future of its FLO TV division because of it. Qualcomm is looking to sell or find a partner for its FLO TV mobile television business in the U.S., which launched about three years ago but has struggled to build critical mass.
In his earnings call, Jacobs said Qualcomm is in discussions with several companies over the future direction of the service. Talks are in early stages. They center on understanding “things that different companies might be interested in relative to that business and relative to the spectrum that we own.”
Qualcomm said three options are on the table: selling the business, selling the spectrum or finding a partner.
Qualcomm spent $683 million acquiring the wireless spectrum to run FLO TV, according to The San Diego Union-Tribune. A couple of years ago, it predicted that it would invest $800 million in all — including spectrum, network build-out and marketing costs — to get the network up and running.
The service offers about 20 channels of live mobile TV, including ESPN , ABC, Comedy Central and CNN. Coverage is not nationwide, but FLO TV is available in most major cities and several smaller ones, covering 68 million potential subscribers.
FLO TV powers the Verizon and AT&T mobile TV offerings for cell phones that contain a Qualcomm chip that enables the service. Qualcomm sells its own personal TV device for about $150 on Amazon.com. Subscriptions range from $10 to $15 a month.
Despite a marketing effort, including advertising as part of last year’s Super Bowl, FLO TV doesn’t have a large subscriber base, according to analysts. Qualcomm won’t release subscriber numbers.
Recently, the company has talked about other uses for the FLO TV network besides television. Qualcomm has said the network could potentially be used by publishers delivering electronic magazines and newspapers to mobile subscribers, for example. Qualcomm also is sponsoring a contest among software developers to come up with additional non-TV applications that would work on FLO TV network, said the Union-Tribune.
Qualcomm acquired the spectrum when broadcast television switched from analog to digital. The company thinks the spectrum has significant value as a way to ease data traffic that’s clogging existing 3G networks.
RBR-TVBR observation: There could be a flaw in the subscription mobile TV business model. First of all, most consumers are already paying for TV in the home, post-DTV transition. The ones that aren’t are not likely to pay for it on a mobile device; the ones that are, are likely not willing to pay more monthly than they already are. As well, much of this content, whether it be delivered live or not, is already available by going directly to the broadcaster’s/content providers’ website or app. Likely AT&T or Verizon will absorb the service and call it their own – and try to get as much ROI as possible through advertising insertions. But they’ll have to compete with the free-to-consumer ad-supported mobile DTV now being rolled out by broadcasters.