The Hotspot Content Connection - Page 2

By Gerry Blackwell

December 02, 2004

The simplest scenario OnAir envisions is a single hotspot or small regional operator with four or five hotspot locations. A system for a single or first location costs under $5,000. For each subsequent location, it's about $2,000. The additional amount for the first location pays for a management systema separate server running OnAir's management softwarethat works over the Internet and allows an operator to manage several locations from a central console.

"We believe the return on investment will be very fast," Nath says. "It should be a six to nine-month payback." This is based on charging $2 to $4 an hour or about $30 a month for video service, which he says is in line with what consumers are willing to pay for residential pay TV and Internet services.

However, this doesn't take into account costs for content. Nath suggests that some operators may have access to free content, such as local community television programming or their own or others' infomercialsalthough it's hard to imagine anyone paying for this kind of content. Local sponsorship of purchased content is another possibility.

Operators could also source content from satellite and cable providers. These providers currently have rate cards that include different rates for providing their standard services in public environmentshospitals, for example, or public areas in hotels. We're guessing, however, that satellite and cable providers don't have a "Wi-Fi hotspot" category on their rate cards as yet. The concept is too new.

The third possibility is to buy content from OnAir, which Nath says is in the process of developing a portfolio of content provider partners. He can't provide details yet because the deals have not been announced.

OnAir makes a more compelling case for Wi-Fi pay TV services in airports. There, as Nath points out, operators have a captive audience of travelers who spend anywhere from 45 minutes to an hour and a halfor longertwiddling their thumbs, waiting to fly. The company is proposing that service providers offer eight channels of video content, including feeds from the major networks. Now the price to end users begins to seem more reasonable.

Customers would log on through their regular hotspot providera T-mobile or WayPortand then have the option of buying time on the video service, or if they're already a subscriber, logging in using their existing userid and password.

The case for Wi-Fi video in conference centers is also an interesting one. Many if not most conference hotels and convention centers already have Wi-Fi infrastructure in place, Nath points out. Providing live video feeds from conference sessions over the wireless network could work in several ways.

Suppose you're a conference goer who gets up a little late after a night of conventioneering. You could log on to the live video feed from the keynote session as you eat breakfast and then join the session when you're ready. Or you're attending one session but you're interested in another in a different conference track. So you log on to the Wi-Fi video service and use the OnAir system's personal video recorder (PVR) functions to record the session you're missing so you can watch it later.

Nath also suggests that conference organizers might be able to sell lower-priced admittance to the conference to people who don't want to pay the full price to attend in person. This would allow vendor companies at a conference, for example, to have personnel attend and be available for meetings with prospective customers but not actually pay the full shot to sit in on the conference sessions.

OnAir also has an offering for hotels that would allow them to deliver video content to guest rooms over a wired Ethernet network.

The company has one other interesting scenario in the transportation sectorproviding video content to bored commuters on trains or even ferries. There are both train companies and ferry companies in OnAir's Bay area home turf currently offering Wi-Fi service. Is the company talking to any of them, we wondered?

"We're not in position to disclose anything yet, but you're on the right track," Nath says. (We don't think the pun was intended.)

Truck stops are another possibilityalthough it's clear that OnAir is too small to be able to pursue every possible market opportunity. It only has about 15 employees. And although Nath says it has sufficient funding at presentall of it privateit will need more within the next two years to move ahead, he says.

"We haven't made our plans [for seeking funding] public yet," Nath says. "We're still trying to figure out what our needs are."

OnAir has some interesting ideas and if its technology works as well as it claims, it might be able to create a market. But it will be creating a market. This is virgin territory. Content, as in all IP TV propositions is keyand could be a deal breaker. It will be interesting to see what kind of content deals OnAir can strike.

Reprinted from ISP Planet.

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