Monday 05 May 2008
Into 2008: mobile TV
Last year was characterised by much debate in the Australian communications sector with broadband access and the underlying infrastructure dominating the agenda.
These discussions and negotiations – while critical to the future of Australia – have over-shadowed an upcoming spectrum auction in this country, which provides a further opportunity to deliver a range of new digital services to Australians.
In October 2006, the former federal government passed a reforms package related to the opening of two reserve digital channels (spectrum A and B). According to the proposal, channel A is to be used for free-to-air datacasting and community television. Channel B is to be used for a wider range of services, including mobile TV.
Now, almost two years later and following extensive discussions about Australia’s digital and economic future, there is potential for these channels to be put to good use.
The introduction of mobile TV in Australia represents a major opportunity for the domestic media, marketing and creative industries. It presents broadcasters with an exciting opportunity to extend their brand into the mobile space by leveraging existing content assets and developing new mobile content. Advertisers have the potential to engage with customers wherever they are. While operators are presented with a complementary revenue stream.
As a concept, Mobile TV has a relatively low profile in Australia but internationally this is a new market gaining visibility. Commercial and pilot services have been deployed in numerous countries around the world, including the United States where Verizon Wireless rolled-out its V CAST Mobile TV service in March 2007 and has expanded to more than 40 markets. AT&T, formerly Cingular, is expected to launch mobile TV services in early 2008.
Mobile TV provides broadcasters with an entirely new distribution channel for existing shows or made-for-mobile content. Some of the most successful broadcasters have established licensing agreements for mobile TV services in the US, including CBS, ESPN, FOX, MTV Networks and NBC Universal. As a result, subscribers can watch their favourite selection of live, simulcast and time-shifted full-length TV programming on their mobile handsets. LG, Motorola and Samsung are some of the manufacturers that offer handsets that are optimised for mobile TV.
Closer to home, commercial mobile TV services are scheduled for launch in Indonesia during 2008 and are already offered in the Philippines, among other countries in the Asia-Pacific region. In fact, Portio, a UK based research firm, expects Asia-Pacific to account for about 50% of the world’s mobile TV subscriber base by 2011. It already hosts the world’s two biggest mobile markets in China and India.
It is important to distinguish mobile TV from the video download services that are available via 3G and wireless data networks today. True mobile TV is delivered over a dedicated mobile broadcast network, which aggregates programming and prepares it for transmission to handsets.
3G telephony is configured for one-to-one network connectivity, it can stream live content to mobile handsets but the quality of the broadcast will deteriorate as the number of viewers increases. By establishing a dedicated network for mobile TV using the best fit technologies, operators can prevent any degradation to existing voice and data services, hence the significance of the upcoming spectrum auction in Australia.
A dedicated mobile broadcast network allows pay TV providers to deliver a range of different channels and services, while maintaining a very high quality user experience. In other words, they can provide a compelling mobile viewing experience that mimics what consumers have become accustomed to after more than 70 years of conventional TV.
Trials with Australian consumers have confirmed that there is strong nascent demand for mobile TV services. A Sydney-based trial found 80% of participants expressed an interest in subscribing to a commercial mobile TV service. Australians liked the ability to watch TV anytime, anywhere.
Internationally, major sporting events have been found to be a significant driver and selling point for mobile TV and this will be a factor in its continued adoption during 2008 with the upcoming European soccer Championships and Beijing Olympics.
Mobile TV represents a good fit with a broad range of demographic profiles. In 2007, worldwide mobile telephone subscriptions reached 3.3 billion – equivalent to half the global population. If we follow these trends it’s almost inevitable that the mobile phone will become the ‘TV of the future’. Market research firm Screen Digest predicts that the global mobile TV market will be worth over 4.4bn in 2011 in Asia, North America and Western Europe combined. Subscription business models will dominate, generating more than 90% of revenues in 2011 and the most impressive growth will be experienced in North America where the broadcast mobile TV market is set to grow by 350% between 2008 and 20104.
A strong opportunity exists in the Australian market which brings the significance of the spectrum auction into focus.
Of course, it’s not all smooth sailing for mobile TV – this is a disruptive technology, which requires a clearly defined business model. There are a number of issues that need to be ironed out including regulatory oversight.
Content developers, broadcasters, mobile operators and technology vendors all have a critical role to play in establishing a viable proposition for mobile TV and related services.
These seemingly disparate stakeholders will need to come together to create new partnerships and offerings, which is why the issue of mobile TV in Australia needs to be on the agenda for players in the media, marketing and creative industries.
Rob Hart is country manager at Qualcomm Australia.
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