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1 April 2010

Fox launches subscription-based Hulu-like mobile service

Fox Mobile Group is planning to bring hit TV shows from Fox, NBC Universal and Discovery to mobile phones and every other mobile device it can in a move that would make even Hulu jealous.

News Corp-owned Fox Mobile announced plans to launch Bitbop, a subscription service for smartphones that will deliver both streaming and downloadable TV programs to mobile devices. Movies are expected, also both streamed and downloaded, as the service picks up more content deals and partners. A free version of the app will offer only previews and a handful of clips. The full service including complete episodes will cost $10 per month. Streaming and downloading are said to be supported on both 3G and Wi-Fi connections, but some carriers may end up putting a restriction on downloads over 3G.

Fox said the app will work on mobiles such as the iPhone, Droid and several BlackBerries at launch, and the company plans to continuously expand support for other mobile devices. Fox Mobile Group executive VP and chief architect of the Bitbop service Joe Bilman, said, “The marriage of on-demand content and mobility has the power to ignite a fire in the smartphone space.”

Fox, NBC Universal and Discovery will initially offer their TV shows, and Fox is promising other yet-to-be-named TV partners. Movies are on the agenda, but these will likely be individual rentals or come on a more expensive subscription.

So far, there’s been no mention of broadcasting live content. Fox’s Bitbop might’ve found a way to address one of mobile’s biggest disadvantages – spotty 3G coverage – by allowing users to both stream and download the content. Music apps like Slacker’s and Rhapsody’s are leading the trend of letting users cache music on devices, allowing them to play continuously even if the 3G signal goes awry.

The download model will do the same for mobile video content. It will help ease the strain that smartphones are already putting on 3G networks.
Giving users the ability to download videos over Wi-Fi means that it can be done at home or office when they aren’t using the mobile. It also gives users the chance to download while the device is charging, avoiding any battery consumption when they can’t fully utilize the device. Those without unlimited data plans will definitely stick to Wi-Fi for downloading, at least after that first bill.

Movies will need to be newer releases if they are to attract a large audience. If mostly older movies are offered, Bitbop users will have to weigh that service against Netflix, a fight Bitbop might not win. Netflix is coming to at least some Windows 7 mobiles and “soon” to other mobiles with different platforms.

Fox Media Group CTO Markus Thorstvedt said the Bitbop platform will elevate what video it’s sending out: “Working across most carriers and a wide variety of devices, Bitbop’s technology can move the data robustly over the pipeline, providing a picture that exceeds expectations. Whether downloading or streaming, it will bring viewers the content they want and the ability to access it anywhere.”

The service appears to be restricted to the US, at least initially, although News Corp is a global media company. So far, there’s been no mention of live content as might be expected of mobile TV, so this isn’t a direct competitor to Qualcomm’s FLO TV. But it will likely grab the most potential eyeballs away from Qualcomm.

FLO TV currently offers a variety of live, local channels as well as nationwide channels with live and recorded content. Its smallest package offers around 20 national channels for $15 per month. FLO TV works on some mobiles from AT&T and Verizon Wireless, sold under their brand. FLO TV also works on a mobile TV that Qualcomm sells for $200.
Qualcomm has said it can reposition FLO TV, and the MediaFLO system that powers it, as a content delivery network in case it doesn’t prove as successful as other approaches like Bitbop.

The first question we had about the service is whether it’s aiming to get on the iPad or any of the other tablet PCs coming out that support apps.
The official response seems to be “no,” or at least a cautious “not yet.”
A person involved with Bitbop, unnamed since he was not authorized to comment on new devices, told us that the initial focus is on mobile phones but that support for other devices might happen due to that focus, citing the iPod Touch and laptops that can run mobile phone operating systems as an example.

The iPad is being looked at, but there is some worry over competition on that device. The source said Hulu is looking into the iPad and is figuring out how to adapt its service to the device, but said Hulu isn’t looking into mobile streaming.

The companies are trying to figure out their offering without having too much competition and overlapping content. We were told to expect the content to reach the iPad both through existing stores like iTunes and through a subscription-based app – and that Fox’s brand would be a big part of that app.

Bitbop will face some major challenges as it tries to traverse the mobile video and TV arena, some unique to its offering. First, Bitbop wants users to pay monthly but currently doesn’t have billing set up with carriers. It hopes to do this soon but doesn’t appear optimistic about having this option before launch. Initially, it will only accept credit cards that are tied to a Bitbop account, which could make for an awkward transition to carrier-based payments down the road.

Speaking of paying, there’s also CBS’s TV.com app that offers full-length content for free on the iPhone. The existence of this app and the fact that it doesn’t grab headlines with its usage puts doubt in some minds about the demand for full-length TV shows and movies on mobiles. The CBS comparison, however, has a lot to do with the content that’s being offered, whether or not it’s on mobiles. Look at Hulu – from NBCU, News Corp and Disney, and featuring content from the majority of their studios and channels – and its numbers compared to those from TV.com’s Web site.

Bilman told GigaOM, that Fox hits such as “Family Guy” and “The Simpsons” are believed to be uniquely attractive to users interested in mobile entertainment. Pairing that with downloads means that Bitbop could see success more akin to Hulu than TV.com.

Speaking of Hulu, Bitbop’s biggest competitor could end up being a mobile version of Hulu. Two of the three Hulu parents – News Corp (which owns all of Fox) and NBCU – are involved. A mobile version of Hulu feels unlikely, especially when looking into all the extra deals it would have to make to broadcast all of its content over 3G. But it’s an odd choice not to use the Hulu brand, since it’s become synonymous with quality Web videos.

There’s a chance that that Disney is holding out until it knows and can control the space better, but it’s a difficult gambit for anyone at this stage in mobile TV, especially in the US.