The More The Merrier Says Mobile500

The Mobile500 Alliance was formed last year around this time by the many second-tier TV station groups that had not been invited to join the mobile DTV consortium including NBC, Fox, Ion Media and nine other major network-affiliated station groups that later became known as the Mobile Content Venture.

It was a defensive move. The rejected Mobile500 broadcasters figured that they had better organize so they would not have to accept whatever role they were assigned by MCV and so they could have some say in how the mobile DTV service took shape.

Today, the Mobile500 is no longer playing defense. The 46 member-companies are moving ahead with plans for their own mobile DTV service that they expect will be compatible with whatever service MCV offers, but not dependant on it.

The plans also presume that broadcast network programming will not be part of the service, although they hold out hope that it eventually will be.

This is according to Rob Hubbard, president of Hubbard Television Group, and VP of the Mobile500, and John Lawson, executive director of the Mobile500, who are briefing reporters this week on the status of the effort.

“We’ve been doing some of the legwork to get the ball rolling and we decided it was time to let people know a little bit more about what we are doing,” said Hubbard.

The 46 station companies of the Mobile500 represent 420 full-service stations covering 92% of TV households. Major players include Tribune, Sinclair, Gray, Fisher, McGraw-Hill, Nexstar, Local TV, LIN Media and, of course, Hubbard.

According to Hubbard and Lawson, as now envisioned, the service will comprise 15-20 channels, including five or six local free channels and 14 or 15 national pay channels. In addition, the service will offer a “hybrid” VOD service using the wireless broadband network, but fully integrated with the broadcast service in a single user interface.

Hubbard and Lawson said they hope to have the local service up and running in at least the major markets by the end of the year with some mobile DTV-enabled receive devices, possibly tablets, on store shelves for early adopters.

To make it happen, they said, the Mobile500 planners are proposing a joint venture that will develop and market the national pay and VOD services, work with receive-device manufacturers and wireless companies, make available “overlay” programming that stations providing local service could use in place of network and other programming for which they don’t have mobile rights and build the technical infrastructure for it all.

All broadcasters would be invited to take an equity position in the venture in exchange for money or spectrum or both, they said. And those who choose not to join will still be able to use the infrastructure to offer a local service for a fee, they said.

“We are not going to keep anybody out and we are not going to tell anybody what to do,” Hubbard said.

Hubbard said the Mobile500 is actively seeking outside financing to help fund the venture. Those efforts are “progressing nicely,” he said, declining to identify any of the potential backers or say how much the venture hopes to raise.

Hubbard said the national pay channels have yet to be identified, although they are likely to include the typical array of specialty channels — sports, news, weather, general entertainment, kids. “It’s taking a best-of or meld of categories that would be usable and [interest] for someone with a mobile device.”

Among other things, the infrastructure would provide conditional access, its management and a ratings service.

“If we put together a subscription package, there needs to be the infrastructure in place to sell it, facilitate that transaction, collect the money and then distribute it out to the parties that contributed to it,” said Hubbard.

Accurate audience measurement, of course, is key to selling advertising, Hubbard said. “You can’t monetize any viewership if you don’t know that it’s there.”

The “overlay” programming is critical because stations will probably not be able to clear local mobile rights to all their conventional over-the-air programming. ABC and CBS have shown no interest in extending those rights to their affiliates. And despite their involvement with MCV, Fox and NBC may not be able to clear all the rights from their program providers, particularly the sports interests.

“We want to make it easy [for stations] by giving them some national content they can choose from so they can create a platform for their local content,” said Lawson.

It’s not certain that the network programming will be unavailable for the local mobile service, Hubbard said. “But we need to plan to fill whatever holes might be there.”

Hubbard noted that Hubbard’s flagship in Minneapolis-St. Paul, ABC affiliate KSTP, has been offering a mobile DTV service since last fall that’s basically a simulcast of KSTP with ThisTV programming in place of the ABC programming. ThisTV is a 24/7 multicast channel featuring movies and old TV shows.

Hubbard said that the networks and other resistant programmers will eventually come around and make their programming available for mobile DTV. “Long term, I believe, everything will be there because no one will be able to not have their product there.” The networks have an interest in “making sure their ads are seen by everybody who is watching television,” he added.

The Mobile500 is working hard to encourage tablet and other mobile device makers to build units with mobile DTV receive chips.

“There is a lot of pent up interest from the device makers,” said Lawson. “I think they have been a bit frustrated by our industry. But given the growth of mobile DTV in other markets around the world, they look at North America and say: it’s bound to happen.”

Hubbard conceded that initially the major wireless providers like AT&T and Verizon will likely use their clout to block vendors from putting mobile DTV chips in smart phones.

But like the networks they, too, will eventually embrace mobile DTV, he said. “It wasn’t too many years ago the phone companies were saying they were never going to build a phone with Wi-Fi in it because they viewed that as competition to their networks. Now it’s hard to find products that don’t have Wi-Fi.”

The key to winning over all the device manufacturers is coming up with a “common device profile” — a specification for conditional access and other service features that has the backing of all the broadcasters and that manufacturers can rely on.

Lawson said that he spoke will many device manufacturers at CES and NAB this year. “What they all said they wanted above all was an agreement from the broadcasters that the devices will be able to receive content from all broadcast sources.”

The good news, according to Lawson, is the Open Mobile Video Coalition is working on a common device profile. The OMVC is a broad consortium of broadcasters dedicated to developing and promoting mobile DTV. It spawned the Mobile500 as well as MCV.

Lawson and Hubbard pledged that the Mobile500 would stick to the OMVC device profile, and said that they expected the MCV would, too. They also said they were not concerned if the profile reflected the thinking of the Mobile500 or the MCV.

“We don’t care about the ownership of it; we just care that it’s there,” said Hubbard. “We care that there is a system in place that can be used by everybody, regardless of whether they are a partner, an owner or whatever.”

Lawson and Hubbard now see the Mobile500 and MCV not only as complementary, but also as mutually beneficial.

“It’s in our interest for the MCV is to be highly successful because the more content that’s out there, the more consumers will be interested in buying the product,” said Lawson. “Anything that drives consumer demand for devices and content is a good thing for us. It’s not a zero-sum game.”

Hubbard said that it is difficult to bring together all the parties necessary to launch a service — broadcasters, programmers, device makers, investors — because each has to be convinced that the others are fully committed.

“This is all tough stuff,” he said. “It’s not easy to put together even if you had the ability to do it just the way you want it. You have to work with a lot of different groups here.”

But “the biggest single headwind” at this point is the FCC and its incessant talk of reallocating great swatches of broadcast spectrum to wireless broadband providers, said Hubbard.

“When we talk to manufacturers or to potential financial contributors, they say, the government is going to talk away all your bandwidth. You’re not going to have a business.”