Bloomberg News

MobiTV Pulls $75 Million IPO, Citing ‘Unfavorable’ Conditions

July 14, 2012

MobiTV Inc. (MBTV:US), the maker of software that lets smartphone users watch live television, withdrew its plans for an initial public offering, citing “unfavorable market conditions.”

The Emeryville, California-based company, which filed for a $75 million IPO in August, requested in a letter to the U.S. Securities and Exchange Commission yesterday that the filing be withdrawn immediately.

While the technology IPO market has slowed since the troubled Facebook Inc. offering in May, companies are still going public. Business-software maker ServiceNow Inc. (NOW:US) has jumped 34 percent since its debut last month, and Palo Alto Networks Inc. and Kayak Software Corp. are scheduled to go public next week. The Standard & Poor’s 500 Index (SPX) has gained 3.5 percent since the end of May, after dropping 6.3 percent that month.

MobiTV has never turned a profit, according to regulatory filings, recording a net loss of $11.8 million last year even as revenue rose 27 percent to $85.1 million. Live mobile television has proven to be a challenging market, because consumers can access free on-demand services such as Google Inc.’s YouTube and subscription offerings from Netflix Inc. (NFLX:US) and Amazon.com Inc.

“The actual appeal of what they have to offer from a consumer’s viewpoint is relatively low,” said Charles Golvin, an analyst covering mobile technology at Cambridge, Massachusetts-based Forrester Research Inc. “People have a relationship with Netflix, they’ve got their preferences managed on Netflix, they get a lot of the content they want on Netflix and they’re comfortable with that.”

Licensing Costs

Qualcomm Inc. (QCOM:US), the largest maker of chips that run mobile phones, closed its wireless FLO TV service last year because consumers were gravitating more to programming on demand.

MobiTV’s business is built around providing the streaming technology and then partnering with mobile-phone companies for distribution. Last year, 97 percent of its revenue came from Sprint Nextel Corp. (S:US), Deutsche Telekom AG’s T-Mobile USA Inc. unit, AT&T Inc. and Verizon Wireless. The biggest increase in MobiTV’s operating expense last year was the $9.5 million it spent licensing content.

The company also has another potential competitor on the horizon. Aereo Inc., the online TV service backed by Barry Diller, won a court ruling on July 11 that will keep it from being shut down while U.S. networks pursue a copyright lawsuit against the company.

To contact the reporter on this story: Ari Levy in San Francisco at alevy5@bloomberg.net;

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net


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Companies Mentioned

  • NOW
    (ServiceNow Inc)
    • $59.7 USD
    • 1.37
    • 2.29%
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