Mobile TV's future still murky despite growing consumer demand

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Consumers are tuning in to the possibilities of mobile TV. Half of U.S. consumers would consider viewing programs on their smartphones and tablets according to a new survey conducted by Mobile Content Venture, the broadcaster alliance behind the forthcoming Dyle mobile TV effort. Sixty-seven percent of respondents would watch more television content if they could view it live on their mobile devices wherever they go, and 61 percent said they would be somewhat or very likely to switch mobile operators to get access to mobile TV services.

Asked by Mobile Content Venture what they want from live mobile TV services, 81 percent cited local news and weather, followed by movies (79 percent), national news (75 percent), sitcoms (69 percent) and sports (66 percent). And if you're wondering why consumers want mobile TV, 85 percent are looking to kill time while waiting, 76 percent want entertainment while in transit, 74 percent hope to entertain their kids in the car, 63 percent desire an additional TV at home and 53 percent are looking to stay connected at live sporting events.

Subscriber interest in mobile TV is good news for players like Mobile Content Venture, which brings together the four major networks--ABC, CBS, NBC and Fox--along with 18 major broadcast groups. The bad news is that Dyle is far from the only game in town. Last week, a federal judge ruled that startup Aereo can continue streaming live television programming to smartphones and tablets, despite broadcasters' claims that the service violates copyright law.

Aereo, backed by investors including broadcasting veteran Barry Diller, employs tiny HD antennas to capture local over-the-air network television and stream content live to connected devices for $12 a month--not a dime of which goes to broadcasters. In a 52-page decision, U.S. District Judge Alison Nathan denied allegations that Aereo unlawfully copies and retransmits programming for distribution to connected devices, citing a U.S. 2nd Circuit Court of Appeals ruling that determined a remote DVR service offered by Cablevision also failed to violate copyright restrictions. Aereo attorneys successfully argued their client provides a legal, alternative platform for free TV broadcasts and that, like Cablevision, it essentially rents remote equipment enabling consumers to access content they could receive for free by installing a comparable antenna at home. Broadcasters promised to appeal Nathan's ruling and continue to maintain that the Cablevision ruling does not apply to Aereo's technology: "This case is not over by a long shot," CBS said.

For now, Aereo is limited to the New York City market, but in an interview with Bloomberg following Nathan's decision, Diller said the service will expand to other metropolitan U.S. markets in the near future. "We're going to really start marketing," Diller said. "Within a year and a half, certainly by '13, we'll be in most major" cities. (Diller, who served as chairman and CEO of Fox between 1984 and 1992, also couldn't resist a dig at his former network TV compatriots: "One of my friends at a large broadcaster said 'You succeeded in dropping my stock 2 percent,'" adding "I did think we were on the right side of this, and I'm happy the judge agreed with us.")

Aereo's courtroom win further complicates the question of who will ultimately control the mobile viewing experience. Will it be gatecrashers like Aereo, broadcaster alliances like Mobile Content Venture, streaming media services like Netflix and Hulu, or dedicated network apps like HBO Go and WatchESPN? That uncertainty could explain MobiTV's recent decision to withdraw its plans for an initial public offering, blaming "unfavorable market conditions" in a request mailed late last week to the Securities and Exchange Commission.

MobiTV--which offers live television, video-on-demand content and offline viewing options spotlighting network partners including ABC, CBS, NBC, ESPN, The Disney Channel, MTV and Comedy Central--announced plans to raise as much as $75 million in its original IPO filing, submitted in late August 2011. Bloomberg reports that according to regulatory filings, MobiTV has never turned a profit, posting a net loss of $11.8 million in 2011 even as revenues increased 27 percent to $85.1 million. It seems inevitable that someone is going to make a killing on mobile TV, however--it's simply too early to determine just whom that will be or how they will do it. Stay tuned.--Jason

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