Interview: Paul Scanlan, COO, MobiTV

It took two years for MobiTV to sign up its first 500,000 customers — and just six months for the next 500,000. The growth has been aided by the availability of more video-capable handsets and increasing access to wireless broadband, along with greater awareness of mobile devices as a way to watch various forms of TV and video. During an in-depth conversation at CTIA, co-founder and COO Paul Scanlan talked about some of the advances the company has made in the past year, the move beyond phones to laptops, and possible involvement in the Sprint-cable joint venture. Other services on the product map: DVR-like capabilities, an online locker for off-device storage through MobiTV, Scanlan also was quite frank about the location shifting options from Sling Media and others, spurred, in part, by my use of Slingbox Mobile on a Cingular device that doesn’t support MobiTV. Some excerpts:

Someone suggested to me that Slingbox disrupts you out of business. “Sling, in a weird kind of way, is actually helping our business more than most people would think. One of the nice things about what Sling is doing is they’re really agitating the content partners. … We’ve been challenging (our content partners) to free up the rights and license their content so that we can offer a paid service for subscribers who want to get their content outside their television set and offer an affordable package that’s available to everybody and legitimize the service offering. What’s happened is, in lieu of not having that available with the exception of MobiTV, people are buying products like Sling Media and doing it arguably illegally but still getting access to the content that they want. … It’s very similar to what the music industry went through several years back … the fact is the music industry actually wasn’t providing consumers with an opportunity to do it in such a way that those things could be straightened out.”
– “We’ve moved from mobile phones into PDAs and Smartphones into WiFi and now into laptops and PCs so MobiTV is available to you everywhere from any broadband-connected device and all of our content is licensed and rights are clear for the distribution that we’re allowed. … In its current form in the way they’re offering it, (Sling’s) not really a mass-market device. Our goal and … our vision is to enable a very, familiar easy to use service for people to get TV on all the devices that they want access to.”

Do you really think I’m breaking the law? “I think you are breaking the contract with your cable company or satellite … If you look at the rights that you have to distribute that content, you’re confined to distributing that content inside your home so you actually don’t have the rights to retransmit that content. Here’s why: The providers who are providing that content to you are providing it because they’ve licensed it for certain specific uses. They’ve licensed it for cable and satellite. There are windows of availability that they can make their content through. If you have a tool that enables you to view that content in areas where they don’t have the rights, you’re actually putting them in a legal situation because they may be licensing content from a sports league where they’re subject to blackout restrictions… You’re paying for access through the distribution you pay for but not through the one that you’re watching.”

The fact that I’m watching through my own set doesn’t matter? “Doesn’t matter … This is definitely a gray area and one which the content providers clearly are not excited about. … If I had my way, I would agree with you that, hey, we should be able to watch this content wherever. That would be better for us. We wouldn’t have to license content if that were the case. We could just go and I could hook my cable and distribute it. But that’s not the way rights work. When you’re talking about produced content whether it’s music, TV, movies, there are a lot of people involved that need to be paid, who need to be compensated for their work. Just like an artist deserves to be paid every time someone downloads their song. … In this case, the content providers are claiming — and I actually think they have a very solid argument — that they should be compensated for the additional use and that that additional use should still be subject to the same rights and restrictions that they licensed the content with. … The first iteration of MobiTV way back before we launched the commercial service was, in fact, our own version of what Sling is doing today. Technically, it wasn’t challenging for us. The real challenges are in the business model and finding a way … I think one of the things Sling is going to be subject to is they are agitating the carriers and they are agitating the content providers. If they want to have a very successful mass market product, the people participating in the value chain need to be compensated fairly. They don’t need to go overboard on the compensation. … Our goal for MobiTV isn’t that you would have to have a separate, distinct subscription for every device that you have but you need to figure out the business model. … We’re working with our carrier partners and our content partners to make sure we can provide easy to use, easy to understand packages where you get MobiTV on your laptop, PDA and your cell phone, it’s one subscription on all devices — and maybe if we work in cooperation with the cable company, it’s offset with the fact that you’re paying for cable at home.”

You’ve worked very tightly with carriers, Sprint, you’ve got 1 million-plus customers and yet it feels like the carriers still have yet to quite figure out what to do with all this. “I actually disagree with that. … I would say the carriers understand this space a lot better than they used to and they’re doing a lot more to build this space than they ever have as witnessed by our growth. We grew to 500,000 subs in the first two years and in the last six months we added another 500,000 subs. That tells you something about how the operators have firmly gotten behind these products and service … Sprint is very visionary in their approach to TV; they’re now bundling TV in all their data plans. Alltel is doing the same thing. In the early days, TV was something they were interested in but not a strategic objective of theirs … I think actually through a lot of our success, we’ve demonstrated how powerful TV can be. … They’ve actually stopped calling data plans data plans, they call them TV plans. That’s the Holy Grail for us.”

Are you involved with the Sprint-Cable joint venture? Sprint’s a big partner of ours. They’re got the JV. We’ve shown some things at some trade shows (programming set-tops through the phone) … I can’t talk about anything yet but we like what’s happening. It’s good for us and it’s good for Sprint and it’s good for the cable companies.”