Mobile TV outlook is still unclear

May 12, 2009

So far, it seems that mobile television has been slow to take off, despite some high expectations. With the prospect of new services in America there is renewed optimism, but based on the experience elsewhere it is still unclear how successful mobile television will be. Natalie Mouyal provides a brief review of mobile television developments and the various competing standards worldwide.

Mobile TV was a hot topic at NAB this year. Following the adoption of the Mobile DTV specification by the ATSC, previously known as ATSC M/H, plans are underway in the United States to roll-out services in 27 television markets, covering 38% of the population, by the end of the year. Broadcasters will use a portion of their 19 Mbps broadcast channels, already used to supply HD and SD television to fixed antennas, in order to deliver free-to-air mobile services. The quality and number of services will vary between markets.

The National Association of Broadcasters is confident that the provision of free-to-air broadcast services on a handheld device will appeal to viewers and allow broadcasters to benefit from the Òbillions of dollars in mobile advertising revenue and billions of dollars in mobile search revenuesÓ available. NAB expects that 130 million phones and 25 million media players will be able to receive mobile television by 2012 which will allow, according to a further study, for broadcasters to reap incremental revenue of more than $2 billion after 2012.

Are these figures overly optimistic? Early ventures into mobile television in Europe have not proven to be overwhelmingly successful, hampered by low subscription figures, lack of appealing receivers, and disagreements over business models. In the United States, it is estimated that so far less than 1% of the 260 million mobile phone users subscribe to the mobile television service FLOtv. Only in Asia have services been arguably ÒsuccessfulÓ with the adoption of a free-to-air business model.

Europe
In Europe, several countries have launched mobile television services using the DVB-H standard. Italy has generally been considered one of the most successful markets with nearly one million subscribers. However, take up has stagnated recently and telecom operators have limited their marketing of the service. One service provider, 3 Italia, recently made its DVB-H service available to certain subscribers for free.

Three smaller markets, Austria, the Netherlands, and Switzerland have also launched services in cooperation between telecom operators and broadcast network operators. In all three countries, viewers can access between 15-20 services for a cost varying between 3-10 euro per month. The most impressive subscription figures have been in Austria where one telecom operator, 3, has announced 90,000 subscribers for its DVB-H and UMTS mobile television services. The early success in Austria may be a result of its cooperative business model which obliged the winner of the DVB-H licence to bring the other contenders into the business.

Other countries have attempted to launch services but have been beset by problems. In Finland, the network operator Digita has rolled out the DVB-H network but broadcasters have been reluctant to join the platform. At this stage, only four free-to-air services are available. In France, disagreement has erupted regarding the cost of the network roll-out and the business model to adopt. In Germany, mobile telecom operators who were not awarded the DVB-H licence launched in competition mobile receivers capable of receiving free-to-air DVB-T services just prior to the launch of DVB-H services, thus effectively stifling the potential market for pay services.

Two mobile television services using DAB related technologies, T-DMB in Germany and DAB-IP in the United Kingdom, have both been discontinued due to a lack of subscribers. This can be attributed to an insufficient service offering and the lack of a sufficient variety of appealing receivers.

The lukewarm success of mobile television in Europe has not dissipated enthusiasm. Plans are currently underway to launch services in several European markets from a newly launched satellite using the DVB-SH specification. To ensure full service availability in highly populated areas, it could be expected that DVB-SH will also transmit from the cellular terrestrial transmitters also in the S-Band. More recently, there have been proposals to provide terrestrial gap fillers also in the UHF television frequency band. Nonetheless, questions remain regarding business models, receiver costs and availabilities, and network roll-out.

Free-to-air
Based on experiences in Asia, it would seem that the provision of free-to-air mobile television services appeals to viewers. In Japan, there has been a very rapid take up on mobile television devices, and it is estimated that over 40% of mobile phones can access One Seg mobile television services, based on the ISDB-T standard. In South Korea, over 10 million receivers capable of receiving free-to-air T-DMB services have been sold compared with 1.3 million subscribers to the pay-mobile service via satellite, S-DMB.

However, questions remain where and when viewers are actually accessing the services. In Korea, estimates suggest that 40% of all devices sold are not handheld mobile receivers but rather in-car units used mainly to access data services such as traffic information. In Japan, it is not possible to access mobile television service in a moving vehicle or in the subway system thus limiting the possible viewing locations.

In both countries, broadcasters have not, as of yet, been able to generate additional revenue from the provision of free mobile television services. Broadcasters have generally shown reluctance in developing content specifically suited for mobile reception such as short clips with news, sports highlights, or music. For viewers, the simulcast of existing television services may lack appeal in a mobile environment. In Japan, however, the public service broadcaster NHK will launch a television service dedicated to mobile viewing this year.

One possible solution is to offer free-to-air services as a means of reaching a maximum number of viewers and generating revenue through the provision of ancillary services such as data services or video-on-demand. In the long term, it will likely be necessary to develop unique content for the mobile environment.

Competing technologies
The wide array of available standards for mobile TV services has made competition inevitable and served to limit service take-up. However, it also illustrates the general enthusiasm in the industry for mobile television services.

In Asia, launches have or will take place using the Japanese ISDB-T standard, the satellite and terrestrial DMB standards, and the Chinese T-MMB standard. In Europe, attempts have been made to launch services using T-DMB, DVB-H, DVB-T, and soon DVB-SH. In the United States, both MediaFLO and DVB-H technologies have been launched although the DVB-H services have been discontinued. The future launch of the ATSCÕs Mobile DTV standard will further complicate the situation.

However, more important than the technology, will be finding an appropriate business model that can accommodate the needs of the market. Investors, whether broadcasters, telecom operators, or broadcast network operators, will want a return on their investment. But viewers will also need to be convinced that the mobile television offer is appealing.

Finding a means to generate revenue, whether through subscriptions, ad revenue, or ancillary services, will require the interest of viewers. Only then will mobile television succeed.

Originally published by DigiTAG, the Digital Terrestrial Action Group. Republished with permission.