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15 July 2019

MobiTV wins new funding to support mobile video push to smaller operators

MobiTV’s funding round of $21m two years ago was interpreted as the last chance for the one-time mobile video pioneer to get its newer Connect product off the ground. Connect, in turn, represented the company’s U-turn from serving telco titans with mobile technology to delivering big screen services to Tier 2 and 3 cable operators.

Yet here we are with another $50m in funding, led last week by existing investor Oak Investment Partners, which is clearly impressed with MobiTV’s change of direction.

It brings the company’s total funding to around $214m since its founding in 1999 and as with the previous funding round, the fresh $50m is intended to accelerate the expansion of MobiTV’s Connect software – shifting from its core mobile TV business to one targeting both mobile and set-top environments.

Launched in 2016, MobiTV Connect is a cloud-based IP video delivery system designed to allow smaller US cable companies to offer over-the-top video on smartphones and other portable devices, especially to streaming media adapters deployed already in many US homes, such as Chromecast, Apple TV, Roku, Amazon Fire and even an Amino IPTV set-top. The plan is to help cable operators upgrade video delivery from traditional QAM to IP and blend on-demand, live TV, catch-up TV, network DVR and recommendations – on a TV-as-a-service basis.

Bringing broadcast TV to smartphones hasn’t exactly been the mainstream hit MobiTV had hoped – although ATSC 3.0 is offering something of a lifeline – but MobiTV Connect is unifying the big screen and mobile in a way which could gobble up contracts at Tier 2 and 3 operators which are keeping many of the set-top suppliers afloat.

MobiTV CEO Charlie Nooney claims his company is winning business more quickly than anyone else in the sector, admittedly at small fry customers compared to those of MobiTV’s glory days when it sold to the likes of Sprint, Softbank and Deutsche Telekom (three giants for which we believe it still supports mobile TV services in some form).

Most recently, in February this year, Arkansas-based operator Windstream decided to trade in its managed video network for an app-based streaming video environment through the launch of Kinetic TV, powered by the Mobi TV Connect platform. The big catch is that Kinetic TV costs a hefty $75 a month, available on connected devices, smart TVs, PCs and mobile devices. Such a price tag is why Connect might struggle to survive the test of time as a technology disrupting traditional pay-TV, as millennials today won’t even look twice at this type of solution.

It also suggests the Connect software is on the expensive side, although Nooney attributed the growth of MobiTV Connect to the software’s cost-effectiveness. Perhaps he means compared to what Sprint has paid since the vendor began powering the Sprint TV app way back in 2005.

MobiTV began life as a content management system (CMS) to ingest video and metadata, and transcode and encrypt video. Today, the system also transcodes into classic ABR formats all the way to 1080p although we are not sure Sprint uses the upper end of this capability. One of the key benefits of MobiTV is that the technology is relatively easy to upgrade as it can flow through the existing system. Using Sprint as an example, the system will go all the way up to HD 1080p, but there is now zero-rated data associated with the service as there are with each of its three rivals, and the most recent update was in 2017 when Sprint and MobiTV rolled out the Sprint Spot mobile app for accessing videos, music and games.

The current MobiTV system encodes and packages content into MP4 as well as HLS for iOS devices, DASH, and also 3GPP. Encryption is managed by its own MobiTV DRM based on Open Mobile Alliance standards, which supports Common Encryption (CENC), which is endorsed by UltraViolet. This also supports blackouts for live events. MobiTV systems can also host native device DRMs such as PlayReady, Widevine and Fairplay.

A cloud-based network DVR is also offered so that consumers can stream on other devices, and this can support both shared copies (a single copy stored for all users) and personal copies (every individual has his own copy stored), depending upon the regulatory environment it operates in.

MobiTV had been working on a recommendations system for some years but in August 2015 revealed it was working with Vidora, an entirely new content discovery engine, which applies machine learning to content personalization. It says it is already working with US and international operators. The system also offers targeted advertising selection based on user profile data.

Its own CMS-based analytics system is also boasted, capturing and reporting on customer behavior, which platforms are accessing the system (TV, PC, mobile devices, operating systems and application versions), audience measurement, session lengths, and which content is the most popular – but it has no on-device QoE system as far as we know.

It seems then that MobiTV has plowed all this expertise into the newer Connect platform and is winning its way around smaller US MVPDs such as Windstream, EPB and Citizens Fiber. How sustainable that will prove to be is another matter and climbing its way up the ranks to tier 1 deployments is likely a pipe dream.

Oak Investment Partners was joined by fellow existing investor Cedar Grove Partners and newcomer Ally Financial.