the center, but he disclosed that Qualcomm considered multiple bids, “and in no way were we the highest bidder.” Rather, Purboo says QuickPlay Media “presented the best business case” to operate the facility.
Just what that business case is—and how QuickPlay will be able to operate a more profitable business than Flo TV—has yet to fully unfold.
Qualcomm reportedly paid about $800 million to develop its Flo TV business, including an estimated $683 million to acquire the necessary broadcast spectrum licenses it needed to stream wireless video in scores of U.S. metropolitan markets. As investments go, though, Qualcomm did pretty well—selling its licenses for the 700 MHz spectrum in more than 100 U.S. metro areas to AT&T for nearly $1.93 billion last December.
[ Clarifies that ATT U-verse mobile already was QuickPlay customer at the time of acquisition] At the time, some industry observers wondered why AT&T didn’t also acquire Flo TV’s infrastructure to help alleviate its own strained wireless capacity. QuickPlay, which already was a longtime managed video service provider for ATT U-verse mobile, stepped forward roughly eight months later to claim Flo TV’s physical assets. Sirius XM is currently QuickPlay’s biggest media customer, although Purboo says, “we do see a time when we’ll have many of those tier one media companies.”
Purboo says QuickPlay is distributing video from FreeWheel, DoubleClick, and some 4,000 other media partners. The company streams about 200,000 videos a month, from short sessions of less than 30 seconds to full-length feature films and TV episodes. Including live events, such as the 2011 Stanley Cup Finals and royal wedding, the company counts about 40 million video “consumptions” a month.
It’s also clear, though, that QuickPlay faces an enormous challenge in managing the complexity of sending video to a universe of different Internet devices, on behalf of customers like AT&T and T-Mobile.
Purboo contends that QuickPlay is at the forefront, strategically, as streaming video moves from being a sideshow to the main event. Yet the QuickPlay CEO also seems to be counting on the company’s ability to knock down the barriers between rival companies, technologies, and pricing schemes. For example, Purboo says QuickPlay has been integrating its technology with the set top box used by AT&T U-verse, so users can record a program on their home digital video recorder, and then decide whether to watch it on their TV, tablet, or smartphone. Cable TV service, on the other hand, traditionally imposes an additional charge for every TV or other device that gets the feed.
So while Purboo describes QuickPlay’s strategy as “very much an ecosystem play,” it’s also clear that he’s looking for the carriers and media companies to move to a new business model in which consumers pay a simple flat rate to watch their streaming video anywhere, on any device. Just how likely does that seem to anyone out there?
