Mobile TV still one to watch?


November 25, 2008

4 Min Read
Mobile TV still one to watch?
Still one to watch?

Still One To Watch?

Disagreements over standards adoption and the lack of a proven business model remain the principle-and considerable-obstacles to widespread adoption of Mobile TV.

Mobile operators are wary of deploying Mobile TV services because the return on investment does not seem good enough. Some exceptions include Japan and South Korea, but the consumer behaviour in these markets has been difficult to replicate elsewhere.

The subscription based services model has had some success but usually as an add-on to an existing cable or satellite subscription. It seems that the free-to-air model is also gaining prevalence in the early stages of deployment in order to build user interest in mobile TV services. The globally successful traditional TV model is the one in which consumers are able to receive free content with revenues derived from advertising and up-sell to pay TV via cable or satellite. Operators and broadcasters need to consider a similar complimentary relationship between free-to-air and subscription programming in the Mobile TV context.

The ad-funded model for mobile TV service will only succeed where there is significant critical mass to make it worthwhile for advertisers. Unfortunately, at present, this is not the case. Therefore, to be able to achieve critical mass of users for their services, mobile operators need to take a different approach. Rather than trying to make subscribers watch TV on their mobile phones, operators need to think in terms of how they can enhance the overall user experience of TV services through mobile.

Most users will not prefer to watch TV and video on the small screen of their mobile phones if they are close to a better alternative: a TV, PC or laptop. At the same time, various market surveys have indicated that most users actually spend the highest proportion of the time in which they watch mobile TV when they are indoors at their home or office and close to a TV, PC or laptop. Handset manufacturers have also started to realise this and are increasingly providing video-out cables with their multimedia capable devices so that users can connect and play video content running on the handset on a TV, PC or laptop. Mobile operators and broadcast network operators also need to think along the same lines on how they can offer mobile TV as a service that compliments the traditional TV services.

A recent service announcement by Orange in France seems like a step in this direction. The operator plans to launch a new service that includes a package of five cinema channels in France from November 2008. The content on the channels will be available for viewing as live broadcasts as well as on-demand. The interesting aspect of this offer is that Orange will also offer this service on TV and PC. It is difficult to predict how successful Orange will be. However, the strategy to offer a complete service package for TV, PC and mobile users should help Orange to achieve critical mass of subscribers sooner.

Operators are also starting to exploit advertising in their bid to build a stronger 3G business model. In April 2008, 3 UK unveiled an ad supported mobile music video service, which delivers videos to customers with no data charge, supported by short, targeted video ads. Orange is the host network for ad-supported MVNO Blyk, which at present is the most ambitious ad supported MVNO in existence. Some success that these ad-supported business models have had is now also spilling over into the mobile TV market. The prospect of providing a fourth screen to advertisers presents an excellent opportunity, Also, more available information on mobile users mean that advertisers can deliver bespoke advertising campaigns around different user groups.

For broadcasters, mobile TV offers the opportunity to increase viewer numbers and deliver highly targeted advertising. Some broadcasters also own broadcast towers and can earn significant revenues from leasing broadcast towers to cellular operators. The opportunities that broadcast network operators see in mobile TV means that, in the coming years, they will aggressively look at ways to deliver mobile TV to end-users. Partnering with mobile operators will be the most preferred way to do this. However, if operators choose to remain with a 3G-only business model, it is almost certain that broadcast network operators will look to partner with other stakeholders including handset vendors capable of delivering end-user devices.

As the owner of the marketing and billing relationship with subscribers, operators are in the best position to offer mobile TV services. However, before making a significant investment, they need to have the confidence that their chosen business model will deliver a good return on investment. It seems that a good approach for mobile operators will be to start with a free-to-air business model which also involves minimum capital investment. Once user uptake of services starts to grow, operators can then think of developing new revenue models that can be established on top of the free-to-air content platform.

Further, to deliver successful mobile TV services, operators need to adopt a business model that exploits the opportunities presented by mobile to improve the overall proposition of TV services for consumers. This approach will also compliment the industry trend, especially in developed markets where operators are trying to reposition themselves, and are moving in the direction of essentially becoming mobile broadband players.

Read more about:


About the Author(s)

Get the latest news straight to your inbox.
Register for the newsletter here.

You May Also Like