Free Is The Key To Mobile DTV Success By Heather Fleming Phillips TVNewsCheck
March 9, 2011 6:58 AM EST http://www.tvnewscheck.com/article/2011/03/09/49663/free-is-the-key-to-mobile-dtv-success/format/print Mobile TV looked promising in Ireland two years ago when a trial service was launched across the country. But in January, the country’s Commission for Communication Regulation scrapped plans to issue a permanent license, citing lack of interest from commercial operators. Ireland’s experience isn’t unique. Mobile TV hasn’t been the universal success that overseas broadcasters, equipment manufacturers and content producers had hoped it would be. While the service has taken off in parts of Asia and Latin America, so far it has struggled in Europe. But the mixed results seem to point to one clear lesson for U.S. broadcasters now promising to offer mobile DTV service later this year: mobile TV must be free — at least in part. “The model that will be successful here is one where you marry free-to-air delivery with some kind of complementary service’’ such as premium content, interactivity or e-commerce, says Diana Jovin, VP of corporate marketing at Telegent Systems, a Sunnyvale, Calif.-based company that makes chips for analog mobile TV receivers now being sold in Latin America, Southeast Asia, Africa, the Middle East and India. “What we've seen around the world is that consumers like having an ‘easy, one-click experience,’’ where they’re able to access free content that they know and like at the time they expect it to be on,” she says. Free has been a winner in Japan, where mobile TV is a fact of life after just five years. Eighty million consumers have access to mobile video capability through smart phones, netbooks and other portable devices, according to a report by the research firm In-Stat. Today, 75% of mobile phones in the Japanese market have mobile TV chips in them, and about 40% of the population are frequent mobile TV viewers, says Ulla Saari, sales director at Expway, a company that makes interactive mobile TV software applications. In addition to the free service, another key factor in Japan’s mobile success has been the pervasiveness of phones capable of receiving the service. The mobile phone market in Japan was stagnant until wireless carrier KDDI broke out of the pack in 2006 and began selling mobile phones with TV receivers. Within two months, it had stolen 200,000 customers from its two rivals, says Saari. Competitors had no choice but to get on board and offer the service too, she says. While mobile clearly benefited from free TV, the Japanese carriers eventually realized that they had erred by not offering a service with conditional access — a function that opens the door to add-on subscription services and targeted advertising, says Saari. A new version of Japan’s mobile TV system is relaunching next year, taking advantage of additional spectrum freed up by the switch to digital TV, says Saari. And this time around, operators plan to incorporate technology to allow for premium content, games and more, she says. Brazil and other Latin American countries are piggybacking on the success of Japan, adopting a mobile TV standard and basic free service similar to Japan’s. That has made it easier for manufacturers to come to market quickly with mobile TV-enabled handsets. Latin America is expected to be among the fastest growing markets in the world. In-Stat analyst Gerard Kaufhold estimates that by the end of 2011, the Brazilian market will grow to about 15 million mobile TV-enabled devices. Meanwhile in Europe, mobile TV has largely foundered for a variety of reasons. A maze of investment, regulatory and technology issues frustrated operators’ ability to develop viable business models in a number of countries. Throughout the continent, regulators required companies interested in offering mobile TV to acquire licenses country-by-country. Next, the license holders had to spend millions to build transmission facilities to deliver the service and then reach agreements with handset manufacturers and TV content owners. Because of the heavy financial burdens they faced up front, the license holders had to offer service on a subscription basis. Consumers didn’t bite. “The pay ecosystem has so many flaws that have resulted in big investment disasters over the last few years,’’ says Anna Maxbauer, a TV analyst at IMS Research in Austin, Texas. Italy’s market looked hopeful in 2006 when it launched the service just prior to the World Cup. Consumers in the soccer-loving country jumped at the chance to pay a fee to watch the big games. The service grew to 500,000 users in the first year. But the service stalled at 15% penetration, and isn’t being actively marketed anymore. Its downfall? It wasn’t launched with free TV, says Expway’s Saari. “Free TV is extremely important to have from the start, and they just brought it too late,” Saari says. The pay model also failed in the U.S. Last October, Qualcomm pulled the plug on its FLO TV, a $15-a-month service combining live and on-demand programming. The service ran on dedicated spectrum, and only FLO-enabled devices could connect to the service. “By and large, consumers regard mobile TV as a nice-to-have service, but are prepared to pay very little extra for it,’’ says Aapo Markkanen, an industry analyst with ABI Research. Using a portion of their stations' digital channels and a standard adopted by the Advanced Television Systems Committee, U.S. broadcaster this year hope to deliver mobile DTV to smart phones, tablets, networks and other mobile devices fitted with the necessary receive chips. To introduce the service, which would compete with various broadband video offerings, broadcasters have coalesced into two ventures — Mobile Content Venture (MCV) and the Mobile500. MCV comprises 12 major stations groups led by NBC and Fox. The Mobile500 includes most other commercial station groups. Right now, they are moving on parallel paths, but it's expected that they will eventually come together to offer a single national service. So far, neither the MCV nor the Mobile500 has revealed the particulars of their service, but have said they understand the importance of having a free, basic service — the mobile equivalent of what broadcast has been since it blossomed in the 1950s — and conditional access. “You really need to drive consumer adoption and nothing does that like that free; nothing does that like good old television,” says John Lawson, executive director of Mobile500, which now counts 43 TV groups with a combined 414 stations as members. Even though consumers will get local TV service for free on their mobile devices, under Mobile500’s plan consumers would be required to “opt-in,” to register. That, says Lawson, “enables one of the great financial upsides of mobile, which is that it introduces a much more targeted marketing and advertising system.” _______________________________________________ Medianews mailing list [email protected] http://lists.etskywarn.net/mailman/listinfo/medianews
