MobiTV Takes Cautionary Tone in Filing for IPO
MobiTV took a cautionary tone in filing an IPO seeking to raise $75 million, saying cellular carriers’ moves to end unlimited data plans could “decrease the attractiveness” of its mobile video service, in an SEC filing. “Because our services are data-intensive” ending unlimited data plans could “increase costs to our end-users and decrease the attractiveness of” MobiTV, the company said in SEC documents.
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Among the carriers scrapping unlimited plans are two of MobiTV’s major customers, AT&T and Verizon. AT&T combined with T-Mobile accounted for 24 percent of 225-channel MobiTV’s $66.8 million in 2010 revenue, up from 17 percent of $62.4 million the previous year. Verizon began providing NFL Mobile to MobiTV in Q3 2010 and in six months ended June 30, the company’s managed services revenue rose to $36.9 million from $26.3 million a year earlier. Verizon, along with T-Mobile, which added MobiTV in Q4 2010, accounted for $10.6 million in revenue in the six-month period, the company said. MobiTV has 75 live channels.
Sprint remains MobiTV’s largest customer, accounting for 54 percent of its 2010 revenue, down from 69 percent the previous year, the company said. The Sprint pact shifts to a month-to-month agreement in September 2012, MobiTV said. AT&T, which launched its IP-based U-Verse Live service on MobiTV in Q1, has an agreement that expires in January 2013. The deal with T-Mobile automatically renews in December for one year, MobiTV said. MobiTV’s average paid end users number fell to 1.8 million last year, from 5.8 million a year earlier due largely to a change in Sprint bundled services to a fixed annual fee, MobitTV said. But average revenue per user rose to $2.90 from 88 cents, MobiTV said. In 2010, MobiTV delivered more than 3,000 live events and streamed 1.4 billion minutes of video, up from 264 million minutes in 2007, the company said. It has carriage pacts with ABC, CBS, Disney, ESPN, Fox, NBC and others.
MobiTV is also using its mixed television service to deliver “traditional” TV programming to smartphones and tablets, it said. MobiTV’s mixed television will power Mobile Content Ventures (MCV) service using cellular networks and ATSC-MH broadcast spectrum. MCV is a group of local broadcast affiliates, including those of Fox and NBC, that are expected to launch the Dyle service, MobiTV said.
In first half 2011, MobiTV’s net loss narrowed to $8.2 million from $9.3 million as sales rose to $36.9 million from $31.9 million, the company said. MobiTV’s six-month cost of revenue increased to $14.4 million from $18.8 million as total operating expense jumped to $44.8 million from $40.4 million.