Backed by a cadre of notable cable lions and a key satellite partner, new mobile-video player Hiwire is planning to take to the air, starting with a trial this fall in Las Vegas.
It will be the third such mobile broadcast-video venture now in the works, along with Qualcomm Inc.-backed MediaFLO and Crown Castle International’s Modeo — and another indication that the mobile-video market is gaining momentum.
A subsidiary of Aloha Partners, Hiwire plans to debut its service using Digital Video Broadcast-Handheld (DVB-H) transmission technology and major 700-Megahertz spectrum licenses.
Hiwire is notable in part because of its cable connections. In addition to Aloha CEO Charles Townsend, the former president of Colony Communications in Providence, R.I., Hiwire has investment funding from cable veterans including Continental Cablevision Inc. founder Amos Hostetter, former Prime Cable CEO Bob Hughes, and former Daniels Cable president John Saeman.
“It’s an interesting juxtaposition of these cable operators now looking at a new video play that is not based on wires, but wireless,” Townsend said. “I think they can appreciate the potential here for this new offering better than most, which is why they put money into Aloha.”
So far, Aloha has gathered more than $100 million to support the Hiwire video buildout, which is estimated to cost about $500 million. Townsend said the company will likely seek additional funding from existing investors, network technology partner SES Americom or via high-yield bonds, possibly using its spectrum as collateral.
The largest holder of spectrum in that band, Aloha has licenses covering all of the top 10 U.S. markets and 80% of the points of presence in the top 100 markets, Townsend said. It acquired the bulk of that spectrum at auction in 2002 and 2003, and via acquisitions from other major license holders over the last two years.
That spectrum will provide the local-access connection. SES Americom will supply the nationwide video transmission backbone via its satellite network and IP-PRIME IPTV Broadcast Center in Vernon Valley, N.J. There, the satellite provider will gather network programming feeds and transcode them, converting the video from MPEG-2 into MPEG-4/H.264. It will then deliver the video signals to Hiwire markets via satellite.
“So it will come in as a plug-and-play scenario that can feed the Aloha transmission path seamlessly,” said SES Americom president of media solutions Bryan McGuirk.
From there, the signals will feed future subscribers’ DVB-H-enabled cellular phones, offered through a wireless-carrier partner. Hiwire has yet to secure this partner, but it is in talks with several companies, according to CEO Scott Wills.
“We have been in discussions with carriers already participating with us and using our network to be able to do this and get them involved in the trial,” Wills said. “I think you’ll be seeing some announcements down the road about us partnering with wireless carriers.”
Also yet to be determined is the exact channel lineup.
“Right now, we are in the process of talking to a variety of programmers,” Wills said. “We are talking to the usual suspects, and [SES Americom] has a full team there that is going to be helping us pull together programming relationships to load up the network.”
McGuirk said SES’s program acquisition team has been working on the project “and the response has been positive so far.”
At the same time, Aloha’s cable connections have led to discussions with cable operators, “but there are no specific deals” as yet, Townsend said.
But just as programming has not been firmed up, the pricing has yet to be determined, either in a monthly subscription or the price of a DVB-H capable cellular handset.
“I think we’re going to build pricing based on what our research shows as well as what the carriers feel they can bundle and sell to consumers,” Wills said. “But all of the research we’ve seen is pointing to a price point in the $15 to $20 [monthly subscription] range is easily supportable.”
Hiwire plans to package and bundle programming using its comparatively generous 12 MHz bandwidth — twice the bandwidth competitors can access through their spectrum licenses.
It will be able to offer double the channels of its competitors — as many as 40 channels, compared to the eight to 20 channels MediaFLO and Modeo are planning.
As with MediaFLO and Modeo, Hiwire plans a mix of live streaming video, live audio and on-demand video and music content.
It also will bank on its 700 MHz spectrum to add what it calls “tricklecasting” — downloading content to a user’s mobile phone memory for later viewing — and datacasting. The latter will allow Hiwire to offer a news, sports and weather information data feed alongside the video.
The future mobile carrier partner’s cellular network can be used as the return channel from the user to the network, supplying the needed link for interactive TV applications and e-commerce, Wills said.
It also will be banking on a small but growing number of DVB-H capable cellular handsets now available, including Nokia’s N92 handset.
“The fact of the matter is because there have been so many trials and so many handsets made to support European trials, there are a variety of handsets that currently see our channels,” Wills said.