ATT Wireless has just announced a firm date to launch their version of mobile TV. This comes on the heels of the first anniversary of VCAST, Verizon’s mobile TV service, currently in 50 US markets airing about 150 broadcast programs. Both companies use MediaFLO’s "MediaCast" an independent delivery network built by Qualcomm.

Steve Sechrist
Senior Analyst and Editor

AT&T Mobile TV will launch in May and go head-to-head with the VCAST service. The group is looking to differentiate from Verizon with two (yet to be named) channels "exclusive" to AT&T Mobile. In addition, Sony Pictures Television has announced they will provide a movie channel called PIX to AT&T’s mobile TV service. PIX will feature (mostly older) full-length films for mobile TV viewing. AT&T’s offering will also include non-exclusive channels like ESPN, NBC, CBS, and Nickelodeon, all found on the VCAST network today.

It’s significant that AT&T is now entering the mobile TV space, as the presence of a second carrier helps to validate the market. Also, Qualcomm’s MediaFLO gamble of an independent delivery network build-out looks like it is paying off.

Are these mobile TV services likely to become mainstream, particularly under a business model that requires a monthly service fee that starts at $13/month and goes up from there when so many multi-media delivery alternatives are available?

A recent CEA (Consumer Electronics Association) survey on Non-Voice Cellular Services found that consumers planning to buy a new cell phone in the next six months were interest in subscribing to first, Text messaging (80%), Pictures (65%), Internet (65%) Ringtones (58%) and e-mail (57%) with video a distant 8th place at just 38%. (No doubt Verizon or AT&T would be very pleased if they could sign up 38% of all video-capable cell phone owners at $13/month.)

While Steve Jobs proved consumers are willing to watch video on QVGA displays (ala Video iPods), his model is simply an extension of the iTunes space where multi-media content is downloaded to the player for time-shifted viewing. That’s the rub to the mobile video crowd: most users don’t need real-time access to TV programming, much of which they can get for free or a very low cost a la carte over the web.

YouTube has gone a long way in convincing people that Internet access = access to video, albeit mostly short video clips for now. Again, in part thanks to Steve Jobs, the iPhone opened up the world of cell phone video viewing with a single touch of the YouTube icon on the screen - anywhere, anytime via the AT&T EDGE network and already included in the Web access package.

But don’t give up the ship on mobile video just yet. That same CEA survey did find that among those wanting to buy cellphones in the next three years, interest in video was highest. This may indicate that while the delivery technology is here today (VCAST was launched in March 2007) the consumers aren’t seeing a reason to buy in the near term but recognize there is value in the longer term.

We’ve said it before, the competitive advantage of mobile TV services comes in the immediate delivery of "time sensitive" or even "time critical" data. But simple "convenience access" to mobile TV programming may be a harder sell for the wireless carriers, unless they can make it ad-based and free to the consumer. After all, it was ad revenue and not pay-TV that built our existing TV infrastructure some sixty years ago. On the other hand, the switch from free broadcast TV to paid cable and satellite TV has shown the consumer is willing to both pay for TV and watch ads. Talk about an unbeatable revenue combination. Time will tell.

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