Qualcomm has finally put an end to FLO TV, its faltering mobile TV unit, which will shut down by the end of the year. This comes less than three months after Qualcomm CEO Paul Jacobs publicly admitted that the unit, which is based on the company’s MediaFLO technology, was not performing up to expectations. Jacobs initially stated that Qualcomm was looking to find a buyer for FLO TV; the shutdown implies that Qualcomm found no buyers and realized that no buyers were likely to emerge.
On its website, the company announced that it is “suspending our direct-to-consumer sales of new devices. We anticipate we will maintain the network so that current direct-to-consumer subscribers will continue to receive FLO programming into spring 2011. Service provided to handsets purchased through wireless operators is unaffected at this time.” Both AT&T and Verizon are FLO TV distribution partners, white-labeling the service to their customer base.
Qualcomm has invested approximately $800 million in FLO TV, of which $683 million was the cost of the spectrum (the 716MHz-722MHz spectrum band or UHF Channels 55 and 56) purchased at an FCC auction. Qualcomm, of course, still owns that spectrum, an asset whose value and use will become clearer in the future. Jacobs did stress in his earlier comments that the network may become a data delivery platform for connected devices. With issues of congested bandwidth, especially with the increase in video traffic, this plan may still reap significant revenues for Qualcomm. Jacobs noted that the spectrum itself is now worth “almost $2 billion” based on the latest spectrum auction.
FLO TV was a pioneer in the mobile TV space, launching in 2004 with AT&T and Verizon. The service included content from a wide range of broadcast partners, including ABC, CBS, NBC, Fox, ERSPN, MTV and CNN. One obstacle of adoption of FLO TV was that it was only available on a small number of devices; the company had recently launched its Personal TV device. Although Qualcomm never released its subscriber numbers, one insider estimated that the figure never rose above 100,000. FLO TV is said to be in discussion with AT&T and Verizon Wireless about the future of the service. Both the walled-garden and subscription-based mobile TV models have fallen out of favor since FLO TV’s 2004 launch.
One additional nail in the FLO TV coffin was the launch of mobile DTV by a consortium of U.S. broadcasters. Although, at the time, executives at FLO TV stated that they welcomed the broadcasters’ move and did not see it as direct competition, the advent of a nationwide network airing full-length versions of content played in clip form on FLO TV made its content less compelling.