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MobiTV, an early entrant into streaming cable TV, files for bankruptcy

One of the industry’s first companies focused on delivering live cable channels over the Internet has filed for Chapter 11 bankruptcy protection as it scrounges up more funding to keep the lights on for a little while longer.

According to a consulting company hired by MobiTV, the service has raised $15.5 million in debtor-in-possession financing while it crafts a strategy to come out on the other side of bankruptcy.

Launched in 1999, the Northern California-based tech company was one of the first to envision a world where cable channels and other types of live television programming would be liberated from the cable box and distributed to computers — and, eventually, smartphones and tablets — over the Internet.

It came at a time when some companies were experimenting with delivering postage stamp-sized, heavily pixelated streams through RealPlayer, QuickTime and other software, largely to Internet homes and businesses that lacked the bandwidth to handle standard definition streams.

MobiTV’s software and infrastructure was an early hit with broadcasters: In 2006, it launched a streaming television service, offering a handful of broadcast, cable news and sports channels to Sprint subscribers for $10 a month. It soon expanded to customers on other networks, and even partnered with a pre-Comcast NBC to offer highlights of the 2006 Winter Olympics on mobile devices.

Though it signed up 7 million subscribers, MobiTV’s service was largely relegated to phones and tablets that were connected to WiFi — the service was too demanding for carriers’ 3G wireless networks. The company found slightly more success through a partnership with Sprint and XM to develop an app that could bring streaming variants of satellite radio channels to phone users (a similar partnership brought Music Choice streams to certain Nokia and Sony Ericsson phones on Cingular around the same time).

The company’s decision to focus on carrier partnerships over developing its own service and content offerings put it in an unfortunate position when upstarts Netflix, Hulu Plus, Amazon Prime Video and Crackle began to gain momentum, with hardware developed by Netgear, Roku and Apple TV (and, later, Google and Amazon) helping people move away from linear content streams toward on-demand offerings that could be watched and synced on a slew of other devices.

MobiTV shifted in recent years towards offering its infrastructure to smaller cable companies and startup streaming TV services. In recent years, it signed agreements with T-Mobile and Cable One to help those companies launch their own streaming TV services. But it has faced tough competition from YouTube TV, Fubo TV, Hulu with Live TV, AT&T TV and Dish Network’s Sling TV, all of which reach more customers than any single service powered by MobiTV.

Despite some shortcomings, MobiTV’s executives say the company is still in a good position to compete: It has over 100 customers, according to the company’s bankruptcy filing, and it’s not in danger of going out of business anytime soon.

“We will continue to provide live and on-demand video solutions to our customers and will continue to review our services through the case proceedings,” Charles Nooney, MobiTV’s chief executive, said in a letter on Monday. “In connection with the Chapter 11 filing, the Company has secured important bridge funding commitments which will allow MobiTV to continue business as usual operations during the pendency of the proceeding.”

Nooney said MobiTV could finish its restructuring by the middle of 2021. It wasn’t clear if any positions would be impacted through reductions as part of the company’s restructuring.

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About the Author:

Matthew Keys

Matthew Keys is a nationally-recognized, award-winning journalist who has covered the business of media, technology, radio and television for more than 11 years. He is the publisher of The Desk and contributes to Know Techie, Digital Content Next and StreamTV Insider. He previously worked for Thomson Reuters, the Walt Disney Company, McNaughton Newspapers and Tribune Broadcasting.
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