Stuck in first gear

Advances in technology have led telecoms and broadcasters to proclaim 2008 the year of mobile TV.

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By  Administrator Published  April 21, 2008

Advances in broadcast and telecommunications technology have led global telecoms players and broadcasters to proclaim 2008 the year of mobile TV.

Yet reservations remain over the long-term commercial viability of the technology. Digital Broadcast examines the key issues raised at the recent Mobile TV World Summit in London.

That's [mobile TV’s flawed commercial strategy] what happens when you give a bunch of geeks a mobile TV and tell them to 'go and have some fun'.

Mobile TV has long been hailed as the next big thing by the telecommunications industry with the sector's major players eagerly scrambling to gain a piece of the action.

Speaking at the Mobile TV World Summit, representatives of Swedish network infrastructure vendor Ericsson argued that the drive for mobile broadband uptake by telcos had inhibited a significant push for mobile TV services.

"Until now, the commercial potential of mobile broadband services has preoccupied mobile telecoms operators," claimed Miguel Blockstand, senior product manager, mobile TV, end-to-end network solutions at Ericsson.

Blockstand suggested that by including mobile TV services as part of a flat rate data pricing plan - a strategy that is growing in popularity in North America and Europe - telcos could lure new mobile TV subscribers.

Despite this, the commercial reality remains stark for many mobile multimedia service providers.

Dan Whiley, commercial vice president of digital media at MTV International, confirmed that while a potential one billion people across the globe had access to the company's mobile content streams through first-party deals with telcos, he conceded that these deals were not currently turning a profit for the broadcaster.

"We have great content that people want, but how do we turn that into cash?" he mused. He also appealed for telco executives to develop new content delivery and pricing strategies, adding that only five percent of 3G subscribers in Europe regularly use mobile TV services.

Whiley told attendees that MTV generated more cash in four months from iTunes downloads in the UK than it did from all of the video-on-demand deals it maintained during the same period with mobile operators across Europe.

He added that 30 percent of MTV's digital content revenues are currently derived from ringtones and games downloaded to handsets.

Whiley claimed that the greatest inhibitor to the uptake of mobile TV services related to mobile operators' complex content service prices and complicated service offerings. For Whiley the solution is simple - operators need to be clear with consumers about how much they will charge for access to mobile TV content.

Research by UK broadcaster Channel 4 revealed that 24 percent of its mobile content service subscribers had cancelled their subscriptions due to ‘bill shock'. The research also indicated that ad-funded, or ad-supported, content was four-times more likely to be accessed by subscribers.

Jake Redford, head of TV and video-on-demand at pan-European telco Orange, agreed that using advertising revenues to reduce subscription rates is key to driving subscriber numbers.

Melissa Goodwin, UK mobile controller for British broadcaster ITV, argued that mobile TV service rates should mirror fixed-internet service rates, but the content itself should be customised for wireless platforms.

"If content is free online then we cannot start charging for it on mobile," she says.

MTV's Whiley agreed with this sentiment, adding that to prove successful, mobile content providers must personalise their offerings.

A number of industry sources approached by Digital Broadcast claimed that telcos were missing out on a golden commercial opportunity by not sharing information on subscriber trends with content aggregators who can deliver targeted advertising to mobile TV users.

However, it was the question of how content should be packaged and offered to subscribers that threw up some of the more interesting suggestions at the summit.

Jakub Brzeczkowski, TV and video-on-demand director for Orange in Eastern Europe and MEA, outlined the company's ‘content everywhere' strategy, which envisages a telco distributing content to a variety of delivery platforms including mobile TV and IPTV networks, leveraging a number of different pricing models.

Whiley believes mobile TV is struggling to realise its true commercial potential because previous marketing strategies were ultimately flawed. "That's what happens when you give a bunch of geeks a mobile TV and tell them to ‘go and have some fun'," he told delegates.

For Whiley, the commercial success of Hutchison's 3 Italia has raised the bar for making content accessible on mobile handsets. Representatives from 3 Italia claimed that since its DVB-H mobile TV service launched in 2006, its ARPU (average revenue per user) has risen by 60 percent.

A third of the extra revenue comes from the DVB-H service, according to Marco Maestri, the company's TV solutions director.

Maestri attributed the service's success to the fact that it broadcasts the Italian Serie A football league.

He also cited research from M:Metrics which noted a major spike in subscriber uptake of DVB-H services in Italy during the country's victorious 2006 FIFA World Cup campaign.

This trend is of particular interest to operators in the Middle East where 3G networks are widely deployed.

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