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MobiTV raises $21M as it pivots into set-top box-free IPTV for the living room

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This is your last chance to buy tickets to the D.C. Meetup + Pitch-off!

MobiTV, one of the first companies (est. 1999) to bring TV services to mobile devices, has raised some funding as it moves into a late-stage pivot to bring its technology to the living room. The company today announced that it has picked up a growth round of $21 million from Oak Investment Partners and Ally Bank.

It plans to use the funds for further development and marketing of its MobiTV ConnectTM Platform — a product for pay TV and on-demand TV providers to stream broadcast TV and offer other services, like catch-up and recording, without the need of a set-top box.

(It also can be incorporated into products like the Fire TV stick from Amazon, or Apple TV, to add live TV services to these.)

“We’ve made a big investment in the platform, and we want to get additional salespeople on the street and make sure we get more aggressive in the marketplace,” said Charlie Nooney, the company’s long-time CEO. “We have a supportive investment group and the timing was right.”

This is the first funding that MobiTV has raised in four years, but it’s not its first rodeo. Before today, the company (can you call an 18-year-old company a startup?) had raised nearly $143 million from a mix of strategic and financial investors that included Adobe, Hearst, Menlo Ventures and Redpoint. And in 2011, it applied for but then backed away from an IPO.

MobiTV cut its teeth early on by developing a way to deliver TV services to mobile devices, working with carriers like Sprint, T-Mobile and AT&T, who offered these as incentives to bring more people to its networks and pay them more beyond their basic monthly tariffs.

Ironically, we pointed out as far back as 2006 that MobiTV might pivot to larger screens over time. The argument we made then was that the mobile TV streaming market might be limited in the long term — “It’s effectively a cable television service that only does business with people who have 2 inch TVs,” Michael Arrington wrote.

But things changed: Screens got a lot bigger, and networks got faster. Today, we watch a lot of video on smartphones: around 25 percent of U.S. adults watch a TV show or movie daily on a smartphone, according to eMarketer figures from April 2016. Yet the pull for broadcast TV on mobile has slackened for other reasons: the kind of TV we watch has centered around on-demand content, apps and video that appears in news feeds on social networks, making MobiTV less of a must-have for mobile.

Where MobiTV has a break today, though, is in the at-home TV market: pay-TV providers (and their consumers) are looking for a way beyond set-top boxes, which can be expensive for consumers to buy, costly to maintain for the pay-TV providers and often limited in their functionality. Their clunkiness, in fact, has made them ripe for disruption, and many now opt for lighter options like Fire TV or Apple TV to bypass those services altogether. In other words, pay-TV providers need to find other routes to providing services to customers that can compete better with the newer generation of video services.

Nooney said that MobiTV anticipated all of these changes and that it would eventually try to shift its own service to other kinds of screens beyond mobile. “But the shift to IPTV has happened slower in the U.S. compared to other markets, so we shifted our focus, too.”

One place where MobiTV has been testing its newer service is in India, where it’s working with Reliance on its 4G service Jio to deliver a TV offering with 350 live channels, catch-up TV for seven days and DVR recording capabilities.

And now it’s using the funding to focus its attention on the U.S. again. MobiTV has already announced deals with C Spire, DirectLink and Citizens Fiber to use its MobiTV ConnectTM Platform to shift to IP delivery of their TV services. 

As this takes off, it may also lead to a name change in the near future.

“I get the question about our name asked a lot, but I spent a lot of money for a sign on the side of the building,” Nooney joked, but also admitted that it may start to cause some confusion in the market as too many people assume it’s just about smartphones and tablets, and a now-very legacy service. “The thing that we’re good at is providing this solution wherever you are. But we are having that discussion about changing our name. I don’t have a great answer yet. If we do it, we want to do it right.”

The company had been cash-flow positive, Nooney said, although it has “dipped out” of that now in a bid for growth. MobiTV is not disclosing its valuation, but I understand from sources that it is definitely under $500 million.