When Robert Redford added the gloss and currency of his Sundance indie film empire to the 3G movement, mobile TV got a sudden infusion of undeniable cool. The efforts at 3GSM in Barcelona this year to get a series of up-and-coming filmmakers to adapt their talent and kudos to the '4th screen' not only gave operators, handset manufacturers and vendors a taste for a new business model, but most importantly drew the eye of the media and entertainment sector onto the potential of mobility and its built-in audience.
The concept managed to get strong media mindshare, but still left operators largely baffled about how to extract dollars from a made-for-mobile TV proposition and aggregate the plethora of these new content possibilities.
Is a nod from Hollywood enough to get the mobile TV show on the road‾
Savvy media companies are starting to think so, and aggressive vendors desperate to show their heavily invested 3G operator customers that they can and will get an ROI soon are re-forging their own market strategies to help to seize the opportunity.
Yet, the effusive talk from all camps seems to be taking a long time to download into commercial success.
And the dissection of what the consumer is prepared to pay and demand remains inconclusive. In February M:Metrics revealed that in Europe, ex-mobile TV viewers now outnumber current users. Pricing was a key concern for 45% of those that switched off, while 24% cited concerns over service quality and reliability. Yet results from proof-of- concept trials around the world claim that the appetite for mobile TV is laying dormant for a compelling service offering.
Recent trials in Australia led by Broadcast Australia on the DVB-H platform found that 80% of participants would take up mobile TV services, with average viewing times of 20 minutes and usage driven by sports, entertainment and news. Sister company Arquiva in the UK gained similar feedback from its Media-FLO pilot in Oxford. Users reported 83% service satisfaction, while 76% claimed that they would take up the service within 12 months.
Independent analyst Paul Budde is quick to dismiss the heat around mobile TV as nothing more than vendor-generated hot air. 'Mobile TV is hype only. It is not taking off anywhere basically because the business models are flawed, few people want to pay for it, in the same way that consumers are not willing to pay for IPTV over broadband.'
He blames open-ended mobile charging regimes for putting consumers off in droves. 'While speeds are increasing on HSDPA networks, customers will be massively punished if they are starting to use those speeds, as they will have to pay through the nose for mobile broadband capacity,' he says. Budde also claims that only 3% of global mobile users are on 3G.
Gartner analyst Carolina Milanesi adds that in general, mobile TV is eliciting consumer ambivalence. With European carrierssuch as Orange citing average usage times of 2.5 minutes per day for video services, it suggests that 'even when viewers do want mobile TV, they want it in short, sharp bursts and aren't prepared to pay a lot for it,' she says.
Partnerships required
Nevertheless, the model that's emerging indicates that mobile TV will be led largely by trends and visions outside of the wireless industry.
For example, delivering a keynote at CTIA Wireless in September (and fresh from acquiring mobile entertainment aggregator Jamba), News Corp. COO Peter Chernin described the current delivery of mobile content as a joke, the antithesis of user-friendly or accessible.
'We have not done enough to make consumers want our product up until this point,' he said. With mobile TV at the forefront of News Corp's aggressive multi-platform content play, Chernin noted that only 4% of the US's 219 million mobile users watch mobile TV, but if that figure increased to 20% with ARPU of $10 per month, mobile TV could generate about $5 billion in revenue. To get to that sweet spot, handset makers, mobile operators, marketers and content creators will have to collaborate.
'If you look at the history of entertainment, partnerships with our distributors have been key to our success as an industry. That's what we need to do with wireless. And we need to do it now. It's too big of an opportunity to waste time,' Chernin said.
The call-to-arms is increasingly being heeded by media companies and vendors. However, overly cautious carriers too often are wavering on technology choice, with the leading DVB-H, Media-FLO and MBMS camps jockeying for market leadership. Meanwhile, vendors are increasingly going straight to the content source, actively wooing media powerhouses for a variety of mobile TV strategies, some of which aim to empower the content owner to cut the carrier out completely.
News Corp understands that a well-defined business model could remove the carrier as middleman. DVB-H is one avenue, but so is the rising concept of hosted mobile TV solutions. Replicating the hosted solution platform for content players on fixed-network vendors like Alcatel Lucent is pushing the mobile version to rapidly expedite mobile TV deployment and usage. Ericsson's newly created multimedia division, launched on Jan.1, aims to be the conduit between new media companies and old operators, which translates to new revenue-rich business models.
In February, Turner Broadcasting, a division of TimeWarner (which includes brands such as CNN, Cartoon Network, TNT and TV properties) secured one of the first hosted services deal to be spawned by the new division. The union promises to be the first of many such alliances between vendors and media players and is poised to set the tenor of the way mobile TV will be disseminated to the consumer.
While changing operators' notions of new consumer demand is challenging, the consumer figures are a compelling enough argument unto themselves, says Kate Bennett Ericsson Multimedia director of global business development for the Internet.
She cites YouTube's 100 million views and 65,000 downloads per day as an example. 'Users are doing this, and they expect to communicate, to be involved, to interact. Internet players are offering services that customers want. Do you want to turn back the tide of 100 million people wanting to view videos on their mobile‾'
Media players, with everything to win, are yelling an emphatic 'yes' to this opportunity, but operators are quivering over what technology choice to bet on, who to partner with and what further infrastructure to invest in.
Bennett insists it's time for operators to seize the confluence of activity. 'These services are so popular on the Web, the devices are capable of taking it mobile, the consumer wants to take it mobile and the Internet players want advertising - they want three billion people looking at their stuff not a mere one billion,' she says.
Bennett advises 3G operators to simply open up their networks. 'No one wants to be a bit pipe, but if you have a 3G network or a HSPA network and people want to bring video across, why wouldn't you make it easier and allow them to put traffic over it‾'
Turner Broadcasting VP for wireless broadband technologies Bob Schukai says that the move to an outsourced content hosting solution has freed the broadcaster from the complexity of technology. 'Ericsson hosts, manages and integrates it into operator billing engines;they can do all the nasty bits.' He adds the supplier also directly handles Tuner's relationships with more than 700 network operators globally.
Ericsson's cellular multimedia strategy coupled with its push for MBMS is also working to keep its operators away from deviating down the rival broadcast DVB-H path and its variants including MediaFLO.
No clear option
Many vendors and analysts don't see any one technology emerging as a clear winner. 'It's not a case of either-or,' says Bruce Webb, Nokia regional manager of mobile TV and video experiences. 'We expect we'll see them co-existing as each can offer different services to consumers. For us, broadcast mobile TV is an interesting and growing business for more than just handset manufacturers. There are new opportunities for operators, broadcasters and other content providers, and service providers in new roles, such as provisioning mobile broadcast services and operating mobile broadcast networks.'
There are over currently 47 global DVB-H trials with 18 supported by Nokia across 34 markets. Building on the momentum, Nokia believes that 2007 will be the year of widespread commercial service launches. Italy's 3, launched Nokia's first commercial DVB-H service last year, which boasts 250,000 subscribers.
While DVB-H-based mobile TV models are well supported by vendors such as Nokia, widespread deployment will be governed largely by the availability of licensed spectrum. It also remains to be seen whether carriers will be willing to pay for those licenses and invest in a separate broadcast infrastructure. Again,it is the media player that is in the pivotal position to jump on the opportunity. Unencumbered by a legacy mobile network, the spectrum and technology investment could be mitigated by a consortium-style approach to deployment.
Hybrid solutions
As spectrum issues dull the broadcast mobile TV momentum, Alcatel Lucent is working to develop hybrid satellite and terrestrial infrastructure that would solve the limitations of disparate unicast and broadcast solutions. The company has begun trialing the solution, DVB-SH using the S-band at 2.2 GHz, in Germany and believes it will be key in the mass deployment of mobile TV in Europe, since it circumvents spectrum barriers.
The European Commission has agreed on the use of a harmonized 2.2-GHz spectrum for these EU-wide hybrid mobile TV services. The hybrid satellite/ terrestrial solution uses a geo-stationary satellite for national coverage and a network of medium- and low-power repeaters, co-located with mobile stations to provide urban and indoor coverage.
Alcatel Lucent also backs the hybrid platform with a hosted managed mobile interactive TV service solution, launched in Europe and Asia that targets media players, broadcasters and MVNOs. The content aggregation platform allows non-carriers to deliver mobile TV services in WAP and facilitates integrated TV services via a rich-media application running on handsets. The disruptive hosting solution, which despite being initially launched by a carrier, also allows content players to bypass the network. The vendor claims that over the next 18 months such non-carrier dependant solutions will spark an aggressive push by media players to circumvent the usual relationship between carrier, content and consumer, which may re-define mobile TV as category.
As operators continue to experiment with a workable business model, some analysts and media players are pushing bundling as the way forward. Gartner forecasts that total mobile TV revenue across cellular and broadcasting platforms will jump from $1.9 million in 2007 to $25 billion by 2010. It says cellular will drive the market in the beginning, while broadcast will fuel the later growth.
These figures are predicated on mobile TV being a bundled offering for subscription-based services. Far more conservative estimates are put forward by Infonetics, which claims revenue would only reach $5.6 billion in 2009. Datamonitor forecasts a similar picture, predicting 69 million broadcast mobile TV subscribers by 2009 and revenue of $5.5 billion. Concerns over the issue of radio spectrum licenses are cited as the key issues for the conservative modeling.
Attracting advertisers
Another problem is subsidizing the cost of new mobile handsets. Gartner says the trick for operators during the next three years is to devise 'high demand' services that include community styled and user-generated content to drive subscriber numbers to the point where advertisers would be compelled to react. 'Mobile tariffs are only destined to decrease, and advertising will play a crucial role in operators' revenue going forward,' Gartner's Milanese said.
However, will media owners lead the pack on developing a successful advertising model‾ 'The beauty, of course, is that the mobile device is so personable,' says Turner's Schukai. 'Quite honestly, mobile advertising is only now starting to get traction, and people have to figure out what are the right metrics.'
He adds, however, that operators seem ready to miss the boat on exploiting the untapped resource of detailed consumer data. 'I'm not sure that operators know yet how valuable the information they have about the subscriber is to the advertising community. They know who the subscriber is, they know what kind of plan they are on, and they know what they are watching. Advertisers will pay for that - subject to issues around privacy.'
If consumers are willing to accept advertising for reduced tariffs, issues over data charging will likely disappear. Schukai suggests, 'from the broadcaster's standpoint what is just as valid is that we are going to give you everything [content] for free.'
No doubt, even if this issue is eventually resolved, the battle over who owns the 'Fourth Screen' seems destined to rage on for quite some time. With billions at stake worldwide, it's unlikely content providers, vendors and mobile operators will sort out a clear profit path in mobile TV anytime soon. For operators, they important strategy is to partner strategically - and to make sure they are not cut out of what promises to be a lucrative future revenue stream.
Down Under, is it DVB-H or MediaFLO‾
It's a race between DVB-H and Media FLO in the commercial rollout of mobile TV in Australia. The Australian Communications and Media Authority (ACMA) is gearing up for the auction of unassigned digital spectrum in October, the so-called 'channel B.' Trials involve a disparate group of operators, content providers and broadcasters including Telstra, Bridge Networks, Turner Broadcasting, Foxtel and FTA channels ABC and SBS.
Given the local profile of the DVB-H platform over the last 18 months, many in the market believe that it has emerged as the clear technology choice. But Broadcast Australia general manager for mobile TV Martin Farrimond says he is not wedded to either platform. 'We are technology agnostic. I'm not really convinced it's a race. All the technologies have a place.'
Broadcast Australia and 3G carriers are also quietly assessing MediaFLO locally. Broadcast Australia attempted to trial the MediaFLO technology in Australia, but encountered issues with handset availability, so it is now drawing on Arquiva's Oxford-based MediaFLO trials.
ACMA recently granted Broadcast Australia an extension to its Digital Forty Four mobile TV trial beyond March 31, following a strong industry push. The regulator also cleared newcomer Irdeto Access to start a three-month trial this month using DVB-H. That trial will concentrate on the delivery of security solutions for content owners to evade the threat of piracy over DVB-H networks. It will also assess the degree to which the DVB-H system can operate using a variety of mobile handsets and mobile network operators.
Broadcast Australia is keeping an 'open mind' on how it will participate in the country's October auction, with vendors, media players and operators negotiating on consortia options. 'We could be a bidder for those licenses or a strategic supplier for a consortium,' notes Farrimond. He does not rule out partnering with carriers and dismissed claims that operators could easily be left out of the DVB-H equation. 'I'm not sure carriers should be threatened - there a number of different models. You could conceive a situation where you see it as a threat, but fundamentally it is an opportunity. And only some of the media companies see the opportunity.'