HBO, Verizon Wireless Face Mobile TV Challenges

Programming rights, evolving viewing habits and delivery technology issues are the top challenges facing both content distributors and service providers in delivering video to the masses, according to top execs from HBO and Verizon Wireless at NAB 2007.

While the talk of the media and service provider industries has been filled with three-screen video strategies and letting consumers view video anytime and anywhere, major business and technology obstacles must be overcome for these ambitious plans to start becoming reality, according to speakers.

HBO’s patience is wearing thin when it comes to the blocking and tackling that underlies offering mobile video services, while Verizon, like others, is still expending too much time on negotiating programming rights across platforms.

“There are no standards in the industry,” said HBO CTO Robert Zitter. “That makes it extremely expensive for us to deal with diverse formats. I said this last year, too. This situation needs to change if the [wireless] industry is going to thrive.”

HBO has cut an exclusive deal with Cingular Wireless (AT&T Inc.) to launch its HBO Mobile offering, which as been available for 18 months. The network has worked with mobile video in more than 10 foreign countries, according to Zitter.

Through its broadening experience with mobile video offerings, HBO has learned that trying to match TV programming for use on mobile devices is not the right plan. “Dark video scenes are not displayed well and long shots don’t work well with low resolution,” explained Zitter, who added that wireless “is a closeup medium that works best with quick cuts.”

Zitter predicted that it will take three to five years before there are millions of mobile video subscribers in the United States, while Jeffery Brown, senior director for business development at network operator MediaFLO USA Inc, was more optimistic, saying it could be achieved in as little as two years.

Robin Chan, director of broadband and mobile video at Verizon Wireless, said the company is still dealing with a host of rights issues that make delivering video across platforms a long and arduous process.

“Content licenses are negotiated on a platform by platform basis,” Chan said. “I understand that there are sliced and diced to optimize revenues, but this [practice] needs to dissolve for things to work. Customers need to know that devices can work together.”

Network operators such as MediaFLO are well aware of the pressing issues that their current and prospective customers face in this country.

“It’s simpler in other markets where programming rights are bought across multiple channels including TV, broadband and mobile TV,” said Brown. That’s how his company’s partner in the United Kingdom, BskyB, which has two mobile TV trials underway in Manchester and Cambridge has proceeded, he added.

Scott Willis, president and CEO of Hiwire, a spectrum owner that plans to launch local and national mobile TV service in Las Vegas in the coming months, said the situation Chan touched on “is continuing to thwart consumer adoptions of mobile video.”

Not to be forgotten is the seemingly ever-present issue of video quality, which HBO’s CTO asserted makes traditional TV programming unsuitable for a no-extra-effort transition to mobile devices with relatively tiny screens and lower resolution.

“Quality is subjective, with what’s high quality to one consumer is unacceptable to another,” said Joe Zaller,, vice-president of strategic marketing for Snell and Wilcox, which helps service providers adapt video assets for use on mobile devices. “We expect to see phones with better [video] encoders.”

This development, he added, would help deliver a better picture at lower bit rates.

Speakers also raised issues about the best means of distributing video to mobile devices.

HBO’s service with Cingular is based on unicast technology, while its service through Vodafone in the United Kingdom began with linear video streams, according to Zitter.

“As a programming company, we don’t get involved in the technology decisions, but the linear streaming of TV via broadcast is not something that will resonate at the end of the day with customers,” Zitter said. “I understand that 3G network operators need an ROI on their network and spectrum, but everything we do with video has to start with consumers, people that are watching when they want to.”

Zitter cited HBO research that shows that 70 percent of the viewing of its programming in the home is done via VoD. “Nobody wants to jump in in the middle of a show.” He suggested a hybrid approach featuring the broadcast model with more storage on mobile phone, would be best.

“We’re looking at a generational discussion of technology here,” said Chan. “We’re looking at broadcast for on-demand because it offer better capacity, access and search capabilities, with search being a major factor with on demand.”

Verizon Wireless, does, however, want to keep its technology options open. “It’s a question of cost and scale,” said Chan. “We will leverage our spectrum and use bandwidth efficiently. This will drive our network spending decisions.”

AT&T Inc. www.att.com  

Hiwire Inc. www.hiwire.com  

Home Box Office Inc. www.hbo.com  

MediaFLO USA Inc. www.qualcomm.com/mediaflo  

Snell & Wilcox www.snellwilcox.com  

Verizon Wireless Inc. www.verizonwireless.com

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