Flo TV Lowers Price to Lure More Subs

Qualcomm's Flo TV service has dropped prices in an effort to gain more subscribers. According to the NY Times:

Bill Stone, who Qualcomm hired earlier this year to run its Flo TV business, said that the service has been too expensive. Especially because AT&T and Verizon tend to sell it in a package that includes other wireless video for $25 or $30 a month, half the price of a typical home cable TV bill.

Right now Qualcomm doesn’t set the retail price for service sold through phone companies. But soon later this year it will start selling directly to consumers with what Mr. Stone said will be more attractive prices. Customers will be able to subscribe on an annual plan for a price probably less than $10 a month. There may be one day passes for something like $5 and month-to-month subscriptions in the $10 a month range, he said.

In my view only sports, news and adult content will attract premium subscription dollars, given all the free video content that's now available in mobile including the anticipated launch of Hulu for the iPhone. 

MocoNews previously reported the estimates of research firm SNLKagan about mobile TV revenues and subscribers:

  1. ESPN : $38.4 million.
  2. MobiTV: $23.8 million.
  3. MTV Mobile: $22.4 million.
  4. CNN: $22 million.
  5. Comedy Central: $20 million.  

MobiTV had 4.4 million subscribers in the U.S. for 2008. In the fourth quarter 2008, SNL estimates that Qualcomm’s MediaFLO had 239,000 subscribers, up from 40,000 in the same period a year earlier.

While mobile video continues to gain users, price remains a major obstacle to mobile TV subscriptions, as we've previously discussed.

In our most recent North American consumer survey we found limited interest in mobile TV (n=611, March 2009).

 opus mobile tv interest march 2009

Note that 7% said "yes" and 18% said "depends on cost." Five percent said "depends on service quality." So we could extrapolate that roughly 30% of the mobile market has at least some degree of interest in mobile TV. Execution, quality and pricing here are thus critical in gaining subscribers.