ITV Interview: Phillip Alvelda, Co-Founder, Chairman and CEO, MobiTV

Dr. Phillip Alvelda is co-founder, chairman and CEO of mobile TV specialist, MobiTV. He recently spoke to [itvt]'s Tracy Swedlow about which kinds of mobile TV services and programming are proving most successful on the company's platform, about the potential of the WiMAX standard to support interactive and high-definition mobile TV, about the company's partnership with AT&T, about its future plans, and more.

[itvt]: Some industry analysts have expressed skepticism about the long-term growth potential of mobile TV. What is your reaction to that?

Alvelda: Anyone who thinks that interest in mobile television is leveling off certainly doesn't have access to our data. Because we see quite the contrary: demand is stronger than ever and growing faster than ever before.

[itvt]: Are you talking about a demand for TV on mobile phones specifically, or on other mobile devices as well?

Alvelda: The principal data we have--which spans three years—encompasses everything from the free mobile phones that carriers have been giving away for some time now, all the way to the smartphones and PDA's that are now sold part and parcel with wireless service plans. We've been operating our service for well on three years now and there's more demand than we can possibly meet internationally, and in the US the demand is stronger than ever before. I have seen some of the recent analyst reports you refer to, which conjecture that demand is falling off. But I'd have to say that they're probably relying on somebody else's service that isn't doing so well, because ours is going like gangbusters.

[itvt]: Can you provide us with some statistics on your growth?

Alvelda: Let me put it this way: we made our first subscriber-growth announcement in September, 2005 when we hit 500,000 subs, and it took us about two years to get there. Six months later, we announced hitting a million. We're growing faster than ever now, and expect to make our next subscriber-growth announcement soon. So this idea on the part of some analysts that interest in mobile TV is tapering off--quite the opposite is true. I think that the biggest challenge for us is customer awareness: most people aren't even aware that you can get regular broadcast TV on your phone. We've clearly gotten to the point where we've reached past what I would call the early adopters, and are beginning to tap into the mass market as more and more people become aware of mobile TV. But tapping into the mass market seems to be accelerating our growth, not the reverse.

[itvt]: Where is your service available now?

Alvelda: The MobiTV Service is available in the US on Sprint, Cingular and Alltel; in the UK on 3 and Orange; in Canada on Bell, Rogers and Telus; and in Latin America through America Movil, Claro, CTI and Telcel. We currently have well over one million paying subscribers internationally.

[itvt]: What kinds of mobile TV services does MobiTV offer, and which are proving most successful?

Alvelda: We've built a service platform and infrastructure that will deliver all sorts of media. So we can deliver live television just as it is on your home television set--we send to your mobile phone many of the same channels that you see on regular TV. We also offer custom, made-for-mobile linear channels. In addition, we offer video-on-demand--some of which consists of short-form clips that are made for mobile, and some of which consists of long-form programs that you would see on regular television. So we're in the unique position of having tried all these different types of mobile TV programming to see what really works and what doesn't. I'd have to say that, just in terms of people's interest in subscribing--so in terms of how many people sign up when you send out a marketing message, and in terms of their willingness to pay--the content that interests consumers the most are the live television channels that you can also get on your TV at home. So people are attracted by the familiar, you might say.

However, once people start to use our service and start to be exposed to all the different ways you can consume video on the service, they increasingly tune to our made-for-mobile linear TV channels, which are programmed using data that's been gathered on how people watch TV when they are mobile--so data on what they watch, when they watch, and how long they watch. These custom channels, which are made specifically for the mobile audience, are starting to outperform some of the more traditional television channels on our service, and are actually starting to dominate in terms of viewership. On the other hand, I'd have to say that our on-demand services, most of which also offer made-for-mobile clips, are way less popular than these made-for-mobile linear channels--I would say they're less popular by a factor of ten.

I think it's very important to give viewers a wide range of options. To some extent, it seems like hubris to decide that we know what the consumer wants and therefore only to program in 30-second clips or whatever. The world doesn't work that way. If someone has a lot of time to kill, they're fine watching a long-form program. If they're in a hurry, they're more likely to want to watch a clip. If some important news story is breaking, they'll want to watch live coverage, and they'll often stay watching until their battery runs down. But then, a few days later, they might want to watch clips of the highlights of that story. So we've come to espouse the philosophy that there need to be different programming formats for different situations.

[itvt]: You mentioned that made-for-mobile channels are proving popular on your service. Where are you getting these channels from?

Alvelda: There are really two different ways that we get them. One way is through established broadcasters: many of the broadcasters on our service--NBC Universal is a good example--are giving us a combination of content, because they're trying out a whole range of programming ideas to see what works and what doesn't. So, for example, we get MSNBC and CNBC from NBC, but they also provide us with an NBC Mobile channel, which they program specifically for the mobile phone. The other way is that we have begun to do deals directly with a number of different studios. Last January, for example, we announced a big deal with Universal Music, where we're licensing all their full-length music videos. As a result of this deal, we are now programming six different music video channels. One's devoted to hip-hop--it's called The Mic; another one, which is called Shift, is devoted to alternative music; then there's V40, which is a top-40 pop station; and Chaos, a heavy-metal-extreme station; and we've also recently started offering a reggaeton station; and we have a rewind channel which does 80's and 90's music and is a popular one as well. So we're beginning to take our knowledge of the mobile audience and use it to program channels ourselves. We're also programming a made-for-mobile comedy channel and a made-for-mobile cartoon channel, by the way.

[itvt]: You also offer a mobile radio service, which seems to be targeted at the US.

Alvelda: Today our dominant audience for the radio product is in the US, so we've concentrated principally on US music, news and sports sources. But we're getting a lot of demand to deploy the radio service internationally--in the UK and across Latin America for example, where there's obviously a demand for local channels. So we're currently still in the process of putting some of those together.

[itvt]: Do you seek content from independent producers?

Alvelda: Well, for the most part, we prefer to work with partners that can put together complete channels for us. So the challenge for a small studio is that they need to produce a large amount of content on a regular basis if they're going to be able to put a channel together themselves. Obviously, many of the smaller ones don't have the capacity to produce that much content. However, we are beginning to license individual bits of custom content on a piecemeal basis--but that hasn't been our model so far.

[itvt]: What kinds of programs draw the most traffic on your various services?

Alvelda: There's a lot of value around live content. There's an incredible perceived value to knowing something right away. So programs that provide breaking news, the latest financial reports, that kind of thing, tend to be very popular. Of course, whenever there's a big sporting event, we also see a big spike in traffic. People want to see what's going on in the game right now. In fact, one of our biggest ever spikes in traffic was game seven of the Boston Red Socks vs. New York Yankees playoffs, just before the World Series. The World Series also saw a good spike, but not as good as for the Boston-New York game. We also saw a huge upsurge in traffic for our news channels and for the Weather Channel during Hurricane Katrina. In many places, MobiTV was the only television service still broadcasting. People needed to see what was going on with the weather--because their lives were quite literally at stake. So there was a huge upsurge in traffic as a result.

[itvt]: You're saying your service didn't go down during Hurricane Katrina?

Alvelda: Ultimately it did when the cell towers were finally submerged. But it was the last television to go down and the first television back up. That was a stark reminder to us that our service isn't just about entertainment, but that it really is a public utility: a service obligation, not just a fun service to provide.

[itvt]: You made a couple of big announcements at the recent CTIA tradeshow. Could you talk a little about those?

Alvelda: One announcement was the launch of this AT&T Internet television service, which will allow you to watch live television anywhere you can find a broadband Internet connection. What's significant about this is that we're breaking open some doors that have been pretty securely closed for many years: it used to be the case that you could only get multichannel television through your local cable company or through a satellite company; but what this partnership with AT&T means is that we're really opening up access. The other announcement we made was that we were demo'ing high-definition television delivery to both fixed and mobile devices over a WiMAX network, using equipment from Navini. As you know, WiMAX is the technological standard that Sprint has chosen as the foundation for its fourth-generation wireless network, and it's a standard that's also being really heavily pushed by Intel, among others. In terms of bandwidth and power it rivals the DSL or cable connection you have at your home, but it's wireless.

[itvt]: When do you think MobiTV will begin offering service over WiMAX?

Alvelda: That's a good question. There are several companies that are working on deploying WiMAX networks: Bell South has started to deploy WiMAX across the Southeast; Clearwater has deployed it in something like 13 or 14 cities, and is already beginning to deliver broadband connectivity over WiMAX. So the technology is already commercially deployed. It just hasn't really gotten mobile yet. And so, for our demonstration at the show, we used the latest what they call "pre-standard" mobile version of WiMAX. "Pre-standard" meaning that it hasn't actually been certified by the WiMAX Forum yet as a final standard. However, there's a pretty good general consensus at this point around this pre-standard mobile version of WiMAX.

The real promise of WiMAX is not only that it gives you a broadband pipe through which to deliver advanced, multichannel television services to mobiles, but that that pipe is a two-way pipe. So, it's going to support rich interactivity: you're not going to be stuck with just a sit-down-and-watch kind of mobile TV service. And I think that's pretty exciting. The other interesting part of the announcement was that we were delivering high-definition television. That pretty much puts to rest the argument that wireless pay-TV providers will have trouble competing with cable and satellite companies because they won't be able to deliver HDTV. So in our first ever demonstration of WiMAX, we've actually shown its competitive potential. And, of course, what we demo'd at the show was just the beginning. We expect the technology in general, and the base stations and the service performance to improve over the next several years, just as other mobile systems have.

[itvt]: Have you considered building a delivery network of your own?

Alvelda: To some extent. We still have a business model whereby we work with third-party network operators. We don't own a network of our own, and we have not paid for a spectrum license or anything like that. So, for now at least, our model is to work with the people who have deployed and are operating these networks. But certainly we often ponder what we should do next.

[itvt]: Can you say what you are pondering?

Alvelda: We can't tell you about that. That would be telling!

[itvt]: Is your platform mostly proprietary, or standards-based?

Alvelda: Well, we certainly have a lot of intellectual property in how our system operates--so for everything from maximizing its performance to how to get the best cost-efficiency out of the network delivery, and all those sorts of things. We also have a lot of intellectual property around the user interface and the guide. But one of our really strong philosophies is that we support open standards. So, for example, we're not using proprietary encryption techniques or proprietary compression techniques. We're supporting the common industry standards, so that all of our content providers and carriers can interface with us easily without fear of being bound to some kind of closed- standards system. Of course, one of the advantages of WiMAX is that it is an open industry standard supported by thousands of companies--which is certainly not the case with some of the competing technologies, like MediaFLO which is proprietary and closed and Qualcomm-only.

[itvt]: Which mobile TV standards are you currently supporting, and which do you expect to support going forward?

Alvelda: Today we offer a Unicast solution. However, we have publicly stated, as the mobile television leader and the partner to many of the world's leading mobile operators, that it's important that we support the needs of those partners. Therefore, we have chosen a network-agnostic approach to the business. If we have an operator in a region with capacity issues that require them to utilize a solution or standard beyond their existing 3G, 2.5x or EV-DO network, we'll support whatever solution they choose to use. We are currently able to support Unicast, DVB-H, WiFi, WiMAX and even Flo. Again, we're ready to support whatever our partners and the industry deem appropriate or useful solutions. But we believe strongly that WiMAX is a logical option for the evolution of mobile television that fits the needs of the wireless industry and consumers alike.

[itvt]: How long will it be before you offer interactive TV on your platform?

Alvelda: We've certainly taken some early steps in that direction. For example, from November, 2005 to January, 2006 we did some interactive advertising with Chrysler. We would insert a Chrysler ad, and when people saw the commercial they could click through to a private channel and watch a long-form advertainment channel. We're planning to do another interactive advertising campaign this holiday season. So we're starting to take baby steps in terms of adding interactivity. Of course, for us, it's a matter of making sure we're doing things that are relevant to the consumer. We're interested in things like voting and polling in association with shows, and also in applications that would tell you what the music video was you just watched and allow you to download it. We've got a group that's exploring all of those things, and we're trying to lock them down in order of opportunity with the right partners.

[itvt]: Do you have any plans to offer your service on portable gaming consoles, such as the Sony PlayStation?

Alvelda: We haven't ported to the portable PlayStation yet or to the equivalent Nintendo and Xbox devices for that matter. But a few people have asked us and we certainly have folks looking at it.

[itvt]: Are there any new developments coming up in the next six months you can talk about?

Alvelda: Well, we've been chosen by the WiMAX Forum to run their live network deployment here in California. So citizens of Berkeley, Emeryville and Albany will be able to get television, Internet access and probably voice services as well, through this WiMAX network that we'll be operating.

[itvt]: Could you talk about user-generated content on your platform? I understand you already offer a channel, Varsity, that's devoted to UGC. Do you have any other plans for UGC services?

Alvelda: We sure do, but unfortunately I cannot talk about that in detail now. I will say that UGC certainly has a very enthusiastic audience that spans various demographics, and that we plan to offer our subscribers the content they want. So more to come on that….

[itvt]: You recently secured $70 million in venture funding. What are your plans for that funding?

Alvelda: A number of things, but mainly to address the incredible demand for mobile and PC television offerings--which means we must scale to address that demand and to continue offering our operator and content partners the resources they need to extend their reach in this market.

[itvt]: What are your plans, if any, for offering local content?

Alvelda: Local content is something we are very interested in offering our subscriber base and will. It's just a matter of time. Location-based services are something our partners take very seriously and have created. I think you'll begin to see some action in that area very soon.

[itvt]: Do you see TV-placeshifting services (i.e. services that allow consumers to get their regular home TV on their mobile phones) as a threat to original mobile TV services such as yours?

Alvelda: We sure don't. We want to offer subscribers the features they want and I believe placeshifting is something you'll see incorporated into mobile television services in the coming year. At MobiTV we embrace any and all enhancements to mobile television and, as the pioneer in the industry, we pride ourselves on leading the innovation that gives consumers the best possible experience whether that be on their mobile phone or PC.

URL: MobiTV

Originally Published: October 12, 2006 in [itvt] Issue 6.98

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