Bill Stone was appointed to Qualcomm’s mobile broadcast unit in January. Since then, the FLO TV president is overseeing the company’s launch into 39 new markets with a reach of more than 200 million subscribers. As he looks forward to the company’s launch of direct-to-consumer products, Stone talked about the ongoing challenges facing FLO TV and the opportunities that lie ahead.
Wireless Week: An analyst I spoke with some time ago said mobile television hadn’t reached a high level of consumer awareness, a sentiment I’ve heard reflected by others in the industry. I’m wondering what it will take to change that.
Bill Stone: I totally agree with that. Mobile TV went out with a lot of hype: We’ve got cell phones, we’ve got television, put the two together and that makes a lot of sense. The reality is that putting those two things together requires you to have coverage, a network, devices and the right price/value content mix. None of those things have been there. We’ve had to spend the last few years catching up to that hype. That’s really been the issue for us.
We’re now in a position to take advantage of that. We’ve got the coverage: We cover the top 100 markets and 200 million people. We’re the only mobile broadcast network in the country right now. We now have some exciting devices from both AT&T and Verizon, including the recently announced HTC Imagio for Verizon, which marks the first smartphone to launch the FLO TV service, FLO TV’s Personal Television and a slew of new devices coming down the pipeline for 2010. We have new content coming out, with new pricing packages … All these are building blocks for our service and really positioning us to give us incredible momentum.
WW: What is FLO TV’s target demographic – who are your customers?
Stone: It’s still somewhat dependent on the device because different demographics buy different kinds of devices. For example, the person buying a new car who wants FLO TV is different that a person who has a gaming device with FLO TV. There are different market segments for FLO TV just based on the hardware.
Generally speaking, we’re really targeting two segments. One is a segment we call fast-forward families: They’re high-tech, on-the-go. We also target active Millennials; not necessarily youth but people who are just out of college, tech-savvy, maybe a little more urban in nature. We’re not targeting couch potatoes. We’re targeting people who are really active and on-the-go but still consume and watch television.
WW: The mobile television industry overall has had sluggish adoption. When do you think demand will catch up with supply?
Stone: We’re already seeing a ramp today. In terms of really big-time drivers for growth, you’re going to see a significant ramp from us in the next 12 months. Now the market enablers are in place, and they haven’t been before.
WW: In terms of the competitive environment, do you see Mobi TV as a competitor to the FLO TV service?
Stone: The barriers for our service are really not around competition. It’s more about how do you build the pie to grow awareness of the capability. Once that awareness is out there in the marketplace, I think there will be a market that can support many players – with us in the best position.
We are the only ones who have a broadcast network. I can’t emphasize just how important that is. Not only is that important because it delivers the best quality experience, but because it also delivers the most scalable experience. Whether we have one user or a million users on our network, it doesn’t matter because it’s all about scale.
WW: What about streaming video content that you can get without a special subscription – stuff like YouTube videos – do you see those as competitors?
Stone: You’re seeing carriers pulling video applications like Slingbox because it takes down their network. To put a finer point on it, if I make a cell phone call today, it operates at roughly 4 kilobits between the cell phone to the transmitter. If I’m streaming a video, it hits 400 kilobits. That’s almost the equivalent of 100 cell phone calls. The carriers just melt down because they’re not set up to scale. With our network, we can have a million users and it doesn’t matter because it’s broadcast network.
We’re the only network in the U.S. that’s built to handle that. Frankly, that’s why AT&T and Verizon are using our network: because they get that efficiency.
WW: An analyst I recently spoke with told me that adoption of FLO’s service has been hampered by your partnerships with AT&T and Verizon, suggesting the company ought to create its own destiny. Can you respond to this?
Stone: We have no incremental cost to increase capacity, so strategically it’s important to us to continue to grow and foster our relationships with Verizon and AT&T – which, by the way, are good, healthy and have a number of devices on their roadmap that are going to launch with FLO.
That said, it’s also important for FLO to go out and build the brand. We have to compete in non-connected devices – devices that don’t necessarily have a cellular modem inside of them. That’s why we’ll be launching our own FLO TV brand. We’ll have our own pricing, our own packaging, our own billing. However, the intent is not to go out and compete with the carriers. The intent is to be complementary to carriers. We want our customers to consume video with the best screen available. That is contextual depending on where you’re at – it can be on your laptop, on your cell phone. That’s really what we’re about.
WW: Are you seeking to expand your relationships to carriers other than AT&T and Verizon?
Stone: We’re always talking to a variety of people, but nothing that we’re going to comment on today.
WW: Are you working on any new initiatives with AT&T and Verizon?
Stone: There are a few things we’re working on other than devices and coverage. One is an initiative around new content. We’re working to roll out big brands you’re familiar with and original content. We’re also developing features like video on demand, interactivity and alerts for a richer platform than just live television. We also have a lot of initiatives around building our brand. What SiriusXM is to radio, FLO TV will be to video.
