Mobile

MOBILE TV HAS been hailed as the next big consumer must-have. In 2006 and 2007, aggressive forecasting predicted there would be 132mn subscribers worldwide by 2010. Mobile TV would not just be another feature to be shoe-horned in­to mobile phones, but promised a development that would radically change the way subscribers view the world and their leisure time. Just as users have come to expect seamless mobile phone communication capability while they are working, relaxing or engaging in recreational activities, so they have been given a glimpse of a world where access to television could be equally ubiquitous.
This vision has yet to come to fruition, however. While Unicast/3G services have already been launched in many countries, broadcast-based mobile TV is still at various stages of deployment in different regions. The promised utopia, where television is only ever a click away, remains - for most users - tantalisingly just out of reach.
So why hasn’t mobile TV lived up to these expectations? Sufficient consumer demand would appear to be present. Research from several trials - including statistics from digital network specialist, Broadcast Australia - suggests that a successful mobile TV business model depends on just 10 to 15 per cent penetration of the existing mobile phone market.
Studies also indicate that around 10 per cent of current mobile users are definitely keen to subscribe to a mobile TV service, with a further 40 per cent expressing a possible interest.
Given these figures, it is perhaps surprising that mobile TV has not enjoyed more success to-date. The indicators show that the various broadcast technologies are proven, the market is ready to embrace these new services, and the business models are being carefully developed to respond to demand.
But it has become apparent that the business model alone cannot address all the critical elements that need to be considered.
The success of mobile TV also depends on several additional key criteria that need to be in place before the service is launched.

Passionate providers
Brian Ridgway is the Mobile TV Business Development Manager for Wipro Technologies - the largest independent R&D Services provider in the world. In his view, there are several ingredients beyond the business model that will help ensure the success of a new mobile TV service. “While voice sells itself, mobile content or data requires a more intense market focus to capture audience attention,” he says. “This focus comes from passion and belief in the service - a successful mobile TV service can never be just a ‘me too’ play for followers. Right now, the industry needs innovative leaders to get the ball rolling.
“Moreover, the mobile TV provider must play an active part in shaping the content, and not simply retransmit material designed for other broadcast media. In this respect, collaboration between a mobile network operator (MNO) and a broadcaster has many advantages. While the MNOs are well practiced at managing subscriber relationships, the broadcasters will naturally have a better understanding of content.”
Broadcast Australia’s Managing Director of the International Business Group, Chris Jaeger, concurs. “Good content is paramount. You will never attract new subscribers - and keep them - if the quality of the content is not there,” he says. “It is not enough to be able to watch mobile TV anywhere. There needs to be something the subscriber wants to watch.”
“The passion and commitment needs to extend beyond content to the ergonomics of both the service and the devices,” adds Ridgway. “Mobile TV has to be user-friendly, and needs to have a great first-time user experience. A clumsy interface - allowing the initial experience to fall short of expectations - could hamper adoption.”

Device for every pocket
Ridgway makes the point that in addition to a user-friendly interface, the market needs a range of sub-$200 devices. Currently MNOs can only attract subscribers to mobile TV services through high-end handsets - typically costing US$500 to $1200. These expensive devices represent only a small percentage of the accessible mobile phone market. If enabled handsets were available in every price bracket, however, then a massive part of the established mobile phone market could be opened up to mobile TV.
“The sub-$200 price point is particularly important, because it appears that the early movers will be in developing countries,” says Ridgway. “Some African and Asian markets are leading the way with launch-planning, but to succeed they desperately need the support of device vendors.”
“There has been an understandable reluctance by the manufacturers to produce more mobile-TV-enabled devices before the networks and services are available,” says Jaeger. “But it’s not all bad news. Technological advancements are allowing the necessary functionality to be incorporated into handsets more cheaply, and we believe that a wider variety of lower-cost devices will begin to enter the market on lower-volume production runs.”
“We can talk about business models and content, but without the devices available, a service will never attract the number of subscribers needed to make it successful,” adds Ridgway.
“Users tend not to buy a device with a service in mind; they are more inclined to buy the handset they like, and then expect the range of services to come with it. For mobile TV to be successful, therefore, there needs to be more choice of devices across a broad range of price brackets.”

Licence to thrill
While passion and commitment from the service provider and an adequate range of handsets will help attract subscribers to mobile TV, the service provider has little control over the regulatory environment. Individual countries have different ways of licensing content and infrastructure, with varying requirements involving frequency, broadcast and media licences.
“In many countries, it is simply taking time to establish the necessary regulatory frameworks,” says Jaeger. “Governments need to recognise that these mobile television services are a good thing for their country, and demonstrate a willingness to allocate spectrum in a way that doesn’t just demand a price premium. Given the diverse ways that licensing issues are handled in different countries, it’s helpful to have the right regulatory arrangement that doesn’t complicate the business by being beholden to too many licensing bodies.”
“One of the frustrations in global progress is that the passionate innovative operators are out there and ready to launch, but they’ve met significant delays on the regulatory front - and by significant, we’re talking years!” says Ridgway. “I understand that a regulator’s primary responsibility is to serve the interests of its country and citizens, and not those of operators and vendors.
However, if the spectrum, technology, investors and market are all ready, then surely - in the interests of economic and technical development - the time is right to award licences?”

Business model basics
While such factors play an important part in the foundations needed for a successful mobile TV launch, they do not undermine the relevance or significance of the business model itself.
Organisations are showing themselves reluctant to make large investments until a model is proven - in particular, it will be important to get the partnering aspects right, recognising the roles played by MNOs, broadcasters, handset manufacturers, digital network specialists and content providers respectively.
Jaeger believes that one key element of the business model is posed by the question, ‘How much coverage is the right level of coverage?’. “As the majority of mobile TV is predicted to be watched inside buildings, indoor coverage becomes a significant issue,” he says.
“Network design is heavily influenced by the reception environment. The commercial challenge lies in finding the right balance between a high quality of service, the right level of coverage, and the extent of infrastructure deployed.”
“You can launch mobile TV with less than 90 per cent indoor coverage, but subscribers will soon expect mobile TV reception to be equal to mobile phone coverage,” says Ridgway. “Users are not likely to differentiate between the diverse technologies that allow them to communicate and watch TV from the same device.”
Revenue stream is another factor to consider, with subscription and advertising-based models both in the mix. According to Jaeger, a hybrid free/subscription offering is likely to be successful, together with some clever bundling of complementary services.
“Whatever happens you need to get the price-point right,” Ridgway adds. “We are talking Big Mac economics here, with monthly charges varying from one country to another, in the same way that McDonalds varies its prices from market to market.”
In Jaeger’s view mobile TV success all comes down to ‘the four Cs’ - coverage, content, convenience and cost. “The importance of these elements cannot be overstated when preparing for a new mobile TV service,” he says.
“We have seen the technology proven and the demand is there. Consumers are ready for the right offering.
In the long run, the exact model will likely prove to be different in different countries, depending on regulatory environment and a host of other issues; but, so long as the four Cs are adequately addressed, mobile TV can and will live up to expectation.” 

Passionate providers
Brian Ridgway is the Mobile TV Business Development Manager for Wipro Technologies - the largest independent R&D Services provider in the world. In his view, there are several ingredients beyond the business model that will help ensure the success of a new mobile TV service. “While voice sells itself, mobile content or data requires a more intense market focus to capture audience attention,” he says. “This focus comes from passion and belief in the service - a successful mobile TV service can never be just a ‘me too’ play for followers. Right now, the industry needs innovative leaders to get the ball rolling.
“Moreover, the mobile TV provider must play an active part in shaping the content, and not simply retransmit material designed for other broadcast media. In this respect, collaboration between a mobile network operator (MNO) and a broadcaster has many advantages. While the MNOs are well practiced at managing subscriber relationships, the broadcasters will naturally have a better understanding of content.”
Broadcast Australia’s Managing Director of the International Business Group, Chris Jaeger, concurs. “Good content is paramount. You will never attract new subscribers - and keep them - if the quality of the content is not there,” he says. “It is not enough to be able to watch mobile TV anywhere. There needs to be something the subscriber wants to watch.”
“The passion and commitment needs to extend beyond content to the ergonomics of both the service and the devices,” adds Ridgway. “Mobile TV has to be user-friendly, and needs to have a great first-time user experience. A clumsy interface - allowing the initial experience to fall short of expectations - could hamper adoption.”

Device for every pocket
Ridgway makes the point that in addition to a user-friendly interface, the market needs a range of sub-$200 devices. Currently MNOs can only attract subscribers to mobile TV services through high-end handsets - typically costing US$500 to $1200. These expensive devices represent only a small percentage of the accessible mobile phone market. If enabled handsets were available in every price bracket, however, then a massive part of the established mobile phone market could be opened up to mobile TV.
“The sub-$200 price point is particularly important, because it appears that the early movers will be in developing countries,” says Ridgway. “Some African and Asian markets are leading the way with launch-planning, but to succeed they desperately need the support of device vendors.”
“There has been an understandable reluctance by the manufacturers to produce more mobile-TV-enabled devices before the networks and services are available,” says Jaeger. “But it’s not all bad news. Technological advancements are allowing the necessary functionality to be incorporated into handsets more cheaply, and we believe that a wider variety of lower-cost devices will begin to enter the market on lower-volume production runs.”
“We can talk about business models and content, but without the devices available, a service will never attract the number of subscribers needed to make it successful,” adds Ridgway.
“Users tend not to buy a device with a service in mind; they are more inclined to buy the handset they like, and then expect the range of services to come with it. For mobile TV to be successful, therefore, there needs to be more choice of devices across a broad range of price brackets.”

Licence to thrill
While passion and commitment from the service provider and an adequate range of handsets will help attract subscribers to mobile TV, the service provider has little control over the regulatory environment. Individual countries have different ways of licensing content and infrastructure, with varying requirements involving frequency, broadcast and media licences.
“In many countries, it is simply taking time to establish the necessary regulatory frameworks,” says Jaeger. “Governments need to recognise that these mobile television services are a good thing for their country, and demonstrate a willingness to allocate spectrum in a way that doesn’t just demand a price premium. Given the diverse ways that licensing issues are handled in different countries, it’s helpful to have the right regulatory arrangement that doesn’t complicate the business by being beholden to too many licensing bodies.”
“One of the frustrations in global progress is that the passionate innovative operators are out there and ready to launch, but they’ve met significant delays on the regulatory front - and by significant, we’re talking years!” says Ridgway. “I understand that a regulator’s primary responsibility is to serve the interests of its country and citizens, and not those of operators and vendors.
However, if the spectrum, technology, investors and market are all ready, then surely - in the interests of economic and technical development - the time is right to award licences?”

Business model basics
While such factors play an important part in the foundations needed for a successful mobile TV launch, they do not undermine the relevance or significance of the business model itself.
Organisations are showing themselves reluctant to make large investments until a model is proven - in particular, it will be important to get the partnering aspects right, recognising the roles played by MNOs, broadcasters, handset manufacturers, digital network specialists and content providers respectively.
Jaeger believes that one key element of the business model is posed by the question, ‘How much coverage is the right level of coverage?’. “As the majority of mobile TV is predicted to be watched inside buildings, indoor coverage becomes a significant issue,” he says.
“Network design is heavily influenced by the reception environment. The commercial challenge lies in finding the right balance between a high quality of service, the right level of coverage, and the extent of infrastructure deployed.”
“You can launch mobile TV with less than 90 per cent indoor coverage, but subscribers will soon expect mobile TV reception to be equal to mobile phone coverage,” says Ridgway. “Users are not likely to differentiate between the diverse technologies that allow them to communicate and watch TV from the same device.”
Revenue stream is another factor to consider, with subscription and advertising-based models both in the mix. According to Jaeger, a hybrid free/subscription offering is likely to be successful, together with some clever bundling of complementary services.
“Whatever happens you need to get the price-point right,” Ridgway adds. “We are talking Big Mac economics here, with monthly charges varying from one country to another, in the same way that McDonalds varies its prices from market to market.”
In Jaeger’s view mobile TV success all comes down to ‘the four Cs’ - coverage, content, convenience and cost. “The importance of these elements cannot be overstated when preparing for a new mobile TV service,” he says.
“We have seen the technology proven and the demand is there. Consumers are ready for the right offering.
In the long run, the exact model will likely prove to be different in different countries, depending on regulatory environment and a host of other issues; but, so long as the four Cs are adequately addressed, mobile TV can and will live up to expectation.” 

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