The Futurist: Can The Mobile TV Industry Survive The Slingbox?

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After years of infrastructure building and billions of dollars of investment, the United States is finally ready to join the ranks of our Eastern neighbors who have long had watchable streaming TV service. CES announcements by companies such as MediaFlo and Verizon made as much clear, and competing services aren’t that far off.

However, standing in the way of these corporate Goliaths is Sling Media, a tiny California-based David with the potential to completely cripple the mobile TV industry before it gets off the ground. The one-two punch of the company’s Slingbox (which, while Tokyo won’t admit it, is already almost single-handedly murdering Sony’s Location-Free TV division) and Sling Player Mobile software, which can deliver your TV, DVR, or even DVD content straight to your cell phone for (shockingly) no monthly fees, are scaring Big Media shirtless. The multi-billion dollar question is: If somebody can get all of their home content on-the-go for free, why would they ever pay for a fee-based service?

Big mobile TV providers might survive the Sling Media onslaught, but it’ll take a lot of luck and even more muscle, and it’ll be a war that plays out on a number of battlefields. And, the way I see it, there are exactly three ways the big players can crush Sling Media.

Click the jump to see exactly what scenarios will allow the new mobile TV industry to survive the Sling threat, and how likely each is to happen.

LAWSUITS, LAWSUITS, LAWSUITS
Throw Sling Media in a legal ring with Verizon, MediaFlo, and the major networks and it almost doesn’t matter who is right—if Verizon decides Sling Media is Public Enemy #1 and turns it into a war of attrition, it’ll be very, very difficult for Sling Media to survive. After all, Sling Media’s entire annual revenue is about equal to the fuel costs of the Verizon CEO corporate jet. In order to win this battle, the mobile TV providers don’t need to win a single court case, just keep Sling Media tied up with enough legal fees to keep them out of contention. Although the fact that Sling Media has survived lawsuits so far is a good sign for them, it may only be because the mobile TV industry hasn’t had much to lose yet—after all, their services have barely launched in a few test markets. Once MediaFlo goes nationwide, expect the legal pains to begin.
LIKELIHOOD OF THIS HAPPENING: High

THE DEATH OF NET NEUTRALITY
Verizon, the first US carrier to bat with MediaFlo’s service, is also one of the biggest opponents of “Network Neutrality”–the idea that Internet service providers shouldn’t be able to throttle the speed of content providers who don’t pay them off. If Network Neutrality dies, first on the slow-down hit list of any ISP will be guys like Sling Media, who not only piggyback huge amounts of bandwidth for their service, but also cut into the carrier’s business plan by delivering something for nothing. What happens with this is ultimately up to Congress, but Sling can breath a little easier due to the recent election victory of the generally more tech-friendly Democrats.
LIKELIHOOD OF THIS HAPPENING: MEDIUM

GOVERNMENT SUBSIDIES
In Korea, where mobile TV has saturated subways and sidewalks for years, early adoption can be chalked up to a number of factors: local CE giants Samsung and LG turning the country into their electronics petri dish, and a mentality that encourages early adoption are foremost on the list, but there is one other crucial factor: the government subsidizes Korean mobile video. While premium and pay-per-view services can beef up any Korean’s channel line-up, the basic networks are delivered free to handsets thanks to the Korean government.

While it would be extraordinarily out of character for the US government to fund any such infrastructure (unless the Pentagon suddenly decided it needed streaming sitcoms to boost troop morale), you can bet the mobile carriers are trying to get something for nothing from Uncle Sam to fund their new ventures. If they succeed, this government influx of cash (or, more likely, tax breaks), could give the mobile TV industry a stay of execution for at least a few years. But will this happen? Probably not.
LIKELIHOOD OF THIS HAPPENING: LOW

In the end, it is necessary to keep in mind just how small Sling Media is, and how big the companies they are likely making enemies with are. Their survival isn’t just important for people who want cheap mobile TV–it’s important to the idea that any start-up with a good idea can survive in a landscape dominated by lawsuit-happy giants who usually value bean-counting over innovation. For that reason, we should all be rooting for them.

Seth Porges writes on future technology and its role in personal electronics for his column, The Futurist. It appears every Thursday and an archive of past columns is available here.

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