After raising $21 million in 2017 for a late-stage pivot from mobile TV to set-top-box-free IPTV services for the home, MobiTV is announcing another large growth round. The company — an early mover in building services to stream broadcast TV on mobile devices (it was established in 1999) — has raised $50 million more to continue building momentum, in part by expanding internationally.
MobiTV today has deals in place with 90 cable and other TV operators, covering 2 million people, with its MobiTV Connect services — providing access to 350 channels including those from A+E Networks, AMC Networks, Crown Media Family Networks, C-SPAN Networks, Disney and ESPN Media Networks, SHOWTIME and Viacom — making it possible to add new channels by way of apps — no need for a set-top box, with customers instead either using existing streaming devices such as a Fire TV stick, Roku or Apple TV, or their smart TVs.
“Our vision of creating leading edge video experiences and technology in a unique, cost-effective manner has allowed MOBITV to win business faster than anyone else in the industry… since we first launched the platform in 2016,” said Charlie Nooney, MOBITV chairman and CEO, in a statement. “We continue to demonstrate our ground-breaking approach to addressing operator challenges as they upgrade their pay TV offering in an increasingly competitive marketplace.”
The funding comes from existing investors Oak Investment Partners and Ally Financial, along with investment from Cedar Grove Partners. We’re trying to find out the valuation. For some context, in 2017, its valuation was between $400 million and $500 million, according to figures from PitchBook and also what sources told us.
The set-top box has developed as a cornerstone to how many pay-TV services work today: emerging at a time when TV sets were very limited in terms of their functionality — they were not designed for hundreds of channels that could be added and removed depending on what your subscription plan offered — they took on a key role for pay TV providers in the struggle for “customer ownership”: the set-top box ensured that would-be channel owners could only connect with viewers by going through pay TV providers.
But fast-forward to today and those set-top boxes have become a millstone for anyone but the very largest providers (and maybe the biggies, too, but it’s notable that the reference customers noted by MobiTV are not the Comcasts of the world, but companies like Citizens Fiber, Windstream and EPB).
Set-top boxes can have technical faults, they are expensive and they go out of date in terms of their functionality. The latter is an important point, because the rise of streaming and over-the-top services have completely transformed how consumers get their TV content today. They now have options for cord-cutting — that is, bypassing pay TV providers altogether — by getting channels and on-demand content over the internet, and linking that through to their TVs to watch.
MobiTV’s technology was originally built for mobile phones, and as such bypassed the set-top box from day one. There was enough growth — and key deals with carriers like Sprint — to encourage MobiTV to file for an IPO at one point to raise capital and take the company to the next level.
But in actuality, broadcast TV viewing on mobile never became a mass-market phenomenon (people watch on-demand on mobiles, and some might watch broadcast streams, but mainly it’s for short pockets of time rather than the main, default screen people use). And on top of that, amid a difficult period for tech companies going public, the IPO never happened. Then the team, led by Nooney, spotted the opportunity to bring the same technology to larger screens.
The pitch that MobiTV makes to pay TV providers goes something like this: set-top-box-free pay TV services gives operators a wider array of channels and potentially more flexibility in how they are provisioned. At the same time, a solution like MobiTV’s potentially lowers the total cost of ownership for providers by removing the need for the set-top boxes.
That’s not to say that some of its customers are not using both, though: they can provide a certain set of channels directly through boxes, and the MobiTV service gives them the option of having another set that are offered on top of that.
“We believe in MOBITV’s superior consumer experience and know that being the only true TVaaS commercially deployed solution in North America has differentiated their positioning in the marketplace,” said Bandel Carano, managing partner, Oak Investment Partners, in a statement. “They have reinvented pay TV by providing operators a platform that allows consumers to use their streaming devices or SmartTV, while eliminating the requirement of a STB – without completely alienating it! This leaves room for everyone to evolve and future-proof their cable offering at a pace comfortable for both operators and consumers.”