FLO TV Makes Retail Push

Mobile television provider FLO TV, which uses UHF spectrum nationwide to deliver a subscription service with major network programming, is officially expanding its distribution beyond wireless carriers Verizon Wireless and AT&T into general retail stores and selling its product exclusive of wireless voice and data plans.

The San Diego-based company, a subsidiary of cellphone chip colossus Qualcomm, Friday began selling its new $250 “FLO TV Personal Television” in Best Buy stores and on e-tailer Amazon. Electronics retailers Radio Shack, P.C. Richard, J&R and 6th Avenue Electronics are expected to begin selling the device, which comes with six months of free service, by early December. FLO TV runs $15 a month for 10-15 channels of programming from CBS, NBC, Fox and MTV Networks, and until now had been sold as a companion to voice and data plans for special FLO TV-enabled cellphones.

FLO TV, which launched in March 2007 on select Verizon Wireless handsets and subsequently added AT&T as a distribution partner, has taken advantage of increased coverage it received this year after broadcasters ceased analog operations to grow the service. The June turnoff meant that FLO TV, which initially paid for UHF Ch. 55 slots in a 2005 FCC auction and subsequently acquired more capacity on Ch. 56, was able to begin broadcasting in major markets such as San Francisco and Boston.

The company has hired DirecTV, Cox Communications and MTV Networks veterans with relevant pay-TV experience to handle sales, marketing and strategy, and has diversified into new receivers beyond the handset. At the CES show last January, it announced a partnership with Audiovox to create an in-car entertainment system with a FLO TV receiver. It has subsequently signed up automobile manufacturer Chrysler to include the system in new cars, a product FLO TV demonstrated in a Chrysler minivan at a New York press event Thursday. Audiovox is also working on an after-market FLO TV product for older cars, though pricing of that has yet to be nailed down.

In October, FLO TV unveiled the Personal TV product, which measures 3 inches by 4.4 inches by 0.5 inches, weighs just over 5 ounces and has a 3.5-inch QVGA display with a capacitive touch-screen that allows users to control the device with intuitive swipe gestures. The device, which has an integrated viewing stand and stereo speakers, has a long-life battery that supports five hours of viewing time and 300 hours on standby. FLO TV executives say the Personal TV’s large screen is a great way to show off FLO TV’s picture quality compared to streaming services that rely on cellular networks for transport.

One thing FLO TV doesn’t have, however, is true local programming, as its channels are national networks that are transmitted via satellite from its networks operations center in San Diego to local headends that broadcast the service terrestrially. FLO TV executives are paying close attention to efforts by broadcasters to launch their own mobile TV services with the new ATSC Mobile DTV standard. They say they can envision reaching some sort of partnership with broadcasters, such as making receiver chips that incorporate both FLO TV and ATSC Mobile DTV capability.

FLO TV president Bill Stone, a Verizon Wireless and Vodafone veteran who ran mobile content provider Handango before joining FLO TV last February, says broadcasters’ efforts to push local mobile DTV can only help FLO TV by showing off the technical capability of a broadcast “multicast” service compared to the “unicast” streams that most consumers have experienced as mobile video.

“The hardest thing to do is to build awareness,” says Stone, who adds that most consumers probably had a negative first impression of mobile video.

He also thinks that FLO TV is well-positioned to compete with new video streaming services enabled by wireless transmission technologies such as 3G, 4G and LTE, simply because of the bandwidth demands that high-volume video will put on wireless broadband networks.

Stone notes that a video stream takes 100 times more bandwidth compared to a simple voice call—roughly 400 kilobits per second compared to 4 kilobits per second for voice. Moreover, FLO has found that one minute of video is equivalent to about 1 megabyte of data, which Stone estimates costs a 3G network about 10 cents to transmit and a 4G network about 5 cents.

If wireless broadband users watched 30 minutes of video a day, the average of a FLO subscriber, then the wireless provider would be incurring about $45 in network costs alone a month.

“The numbers don’t add up,” says Stone.

Stone is particularly excited about the potential of FLO TV for in-car displays. He notes that some 20 million cars already them, which represents more units than Apple’s popular iPhone, and thinks they are a natural complement to mobile handsets or miniature TVs.

“We’re in the best-screen-available business,” he says.