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Ad-subsidized mobile video: Where is it Qualcomm?

April 21, 2009 — 1:38pm ET | By Mike Dano

FLO TV, previously called MediaFLO, is the subsidiary of chip giant Qualcomm that plans to spend close to $1 billion building out a dedicated mobile TV network across major U.S. markets. The network currently sends around a dozen TV channels to select cities and select phones from AT&T Mobility and Verizon Wireless. The carriers each offer two tiers of mobile TV service, both starting at $15 per month. (AT&T charges a whopping $30 for its premium service, which features extra channels.)

How many FLO customers are there? Stone said FLO TV counts two customers: AT&T and Verizon. He declined to say how many paying mobile TV users each carrier has, and the carriers themselves don't provide such information.

How much of FLO's revenues come from advertising? Not much, it seems. Stone said that subscription fees account for "well over 99%" of FLO's current revenues. That said, Stone explained FLO does indeed have a sales force dedicated to selling ads over the FLO network, but he declined to say how big that sales force is. He also declined to talk about any possible mobile-specific advertising campaigns run over FLO's network.

What's the future of ad-subsidized content on FLO? "It's definitely something I see happening, but it's not necessarily going to (make the service) free," Stone said. "I think advertising will become a compliment to subscription, not a substitute."

Indeed, a spokesman from Verizon echoed Stone's comments. "Today, customers pay for TV through their MSO (mobile service operator), satellite or telco provider, and on the Internet the users are still paying for the connection. Shouldn't the question be, ‘Why would mobile be any different?'" said Verizon spokesman Jeffrey Nelson.

Thus, it appears FLO and its carrier partners plan to maintain a paid service-and enjoy the resulting subscription revenues-for the foreseeable future. But it's unclear whether there are enough paying subscribers to make the venture worthwhile.