News From Telecom World

Mobile TV- what is the chance of success?

Posted on: December 14, 2008

Mobile TV appears to be everyone’s favourite whipping boy.

Ever since the announcements that Toshiba’s MBCO was scrapping its SDMB service in Japan, SK Telecom’s satellite and terrestrial DMB services in neighbouring Korea were in crisis and Germany’s Mobile 3.0 DVB-H service was closing down, the doomsday brigade has been out in force to predict that this signals the death of mobile TV.

It probably didn’t help that these announcements came in a cluster which added a certain negative momentum to what would have otherwise been isolated incidences.

But to jump ahead and conclude that these failed attempts at mobile TV are proof that people simply don’t want it is shortsighted at best and foolish at worst.

After all, this is not the first time a service based on new technology has had a hard time getting off the ground at the first go.

The most prominent case I can think of is PCCW’s now TV in Hong Kong. Its original incarnation iTV was launched in 1998 but terminated in 2002, only to be resurrected as the wildly successful now TV less than a year later.

The success of the service the second time around can be put down to technology evolution. By the time now TV came to life, technology and bandwidth costs had decreased dramatically, while technology itself had become vastly more capable. In addition, management was prepared to take a fresh look and learn from their previous mistakes. The rest, as they say, is history.

The lesson to be learned from PCCW and other examples should not be missed by operators thinking of rolling out a mobile TV service.

But technology aside, it seems clear that people’s mindsets are not yet ready for the concept of mobile TV – let alone paying for it – so a much more gradual approach is needed.

People are fundamentally irrational, loss-averse and effort-averse, so mobile TV operators need to basically work out how to give subscribers a nudge to try the service. And free is usually pretty persuasive.

Operators also shouldn’t forget that people love their free-to-air programmes, a phenomenon that is almost universal around the world. These days, with single analogue chips, handsets can be easily turned into TV receivers without investing in network infrastructure, a first step for any operator to embark on a successful mobile TV business model.

However, the inevitable question of how operators will make money out of this type of service remains.

Mobile TV that is based on a free-to-air broadcast model requires a long-term strategy that is built on a phased approach.

Phase one should focus on driving adoption with free TV and audio as part of a handset package and simple navigation that replicates the familiar TV viewing experience.

Phase two should be dedicated to making the service unique, memorable, easy to use and ultimately “sticky”. For that, of course, free-to-air mobile TV won’t suffice and it is at this stage that operators will have to make some sort of investment, whether it be for a broadcast-based network or utilising a 3G network depends on individual circumstances. But this phase should introduce premium content gradually, followed by mobile commerce and gambling, and funded by advertising. Other revenue streams through affiliations such as concert tickets and merchandise are all avenues an operator can explore in this phase to grow revenue and make their service sticky.

There are plenty of other factors impeding the adoption of mobile TV, and they are no small hurdles and need to be seriously looked at.

Issues that come to mind are the lack of commercial terms between various players such as handset manufacturers, software companies, content creators and network owners; or general handset issues such as screen size and resolution, battery life and connectivity.

Specifically screen size seems to have come in as a kind of white knight ever since Apple launched its iPhone and set the benchmark for screen size on handheld devices. While 95% of iPhone owners regularly surf the Web, even though 30% had never done so prior to owning an iPhone, anecdotal evidence suggests that the same applies for watching movies, mainly because the screen is clear and large and can be rotated sideways to get a wider screen.

Finally, there are a lot of other socio-economic factors operators need to be aware of in their specific markets.

There is a reason why analysts predict Asia will be the principal growth engine for mobile TV going forward. People in this region have the lowest car ownership, commute more and longer than almost anywhere else, and are more willing to pay for services and accept advertising. This combination of large amounts of spare time and acceptance of charges is a critical driver for mobile TV. Other countries or regions with a different socio-economic make-up will inevitably experience a different growth curve for this type of service.

It is easy to dismiss mobile TV as unattractive because not a lot of people want it. But personal computers, email and the Internet did not come to be successful over night either and required a fair amount of trial and error, education and technology evolution before people were willing to truly make them part of their lives. Persistence paid for these devices and services, and it will, ultimately, for mobile TV.

Source: Total Telecom

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2 Responses to "Mobile TV- what is the chance of success?"

Australia has had it’s own problems with Mobile TV as well. It was looking good in 2006 but then stalled due to the then Federal Government, and has sat idle ever since. But it seems as though the new Australian Government is committed itself to some new trials in Sydney in early 2009.

I will be releasing a post about it on my site soon, so stay tuned!

Russ

Oops! My site link in my name is correct now.

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