Virgin pulls the plug on mobile video

Updated: Virgin is to switch off its mobile broadcast video service early next year.

The announcement comes less than 10 months after the service was launched, and is a result of BT Movio (the bandwidth provider) cancelling its contract with GCap Media, which owns the frequency.

The only handset ever equipped to receive the service was the Lobster 700TV which, despite a massive promotional effort featuring Pamela Anderson, had only sold around 10,000 at the start of this year.

BT Movio's service was using DMB (Digital Multimedia Broadcast), which utilises the DAB network * (Please see Nick Piggott's comment below). But the EU's decision to endorse DVB-H as the mobile broadcast technology of choice put even more pressure on DMB-based services.

Business Week has produced an interesting analysis of the business model around broadcast mobile video, in light of Crown Castle shutting down its transmitter network (and Modeo service) in New York.

Its prediction is that Qualcomm will have 300,000 subscribers for its US MediaFLO service at the end of 2007, and goes on to suggest that Qualcomm could receive $10 per subscriber per month for the full year. That makes $36m for the year, contrasted with the $800m it's planning to spend building its network, and the $95m it cost to run the service in the last quarter.

Using existing 3G and 2G networks to send video streams to individuals might clog up the data channels, but figures like that make broadcast a very expensive proposition.

Virgin said its service will run until the end of January 2008, though BT's contract on the frequency lasts until 9 June. Virgin refused to comment on the reason for the cancellation, though a lack of subscribers seems likely.

BT Movio was intended to be applicable to any broadcast technology, as it provides DRM and content management services, but without any customers it seems that BT won't be continuing with the product. Timescales for shutting down the Virgin service are still under discussion, but they admit that sales have been "slower than originally expected", which they attribute to a lack of big-brand devices and lacklustre interest from operators.®