Television has been called the “75-year-old killer application” and, indeed, one of the hurdles to-and possibly a shaper of-the mobile television experience is the recent trend toward giant, flat-screen TVs with surround sound in the home. Accustomed to zoning out in front of a massive visual and audio onslaught-it has been more than 30 years since British bluesman John Mayall bemoaned TV’s zombifying effects in his song “Television Eye”-how will consumers respond to TV on the diminutive mobile handset?
Innumerable consumer surveys by market analysis firms familiar with the mobile industry are uniformly bullish, though the projected revenue may not satisfy the myriad parties investing heavily in this application, including network operators, content providers, handset vendors, chip makers, middleware firms and network equipment purveyors. Still, as mobile music becomes commonplace, the industry has latched onto TV-on-the-fly as the application that will grow data usage and, at least under an existing business model that’s certain to change, drive carriers’ average revenue per user sky high. At least, that’s the dream.
A glance at the projections should whet the appetite. The hype cycle has already begun.
- Datamonitor has forecast 69 million global subscribers within three years, generating revenues of about $5.5 billion.
- Frost & Sullivan has predicted mobile TV revenue will reach $8.1 billion within five years.
- ABI Research’s projections, based on a significantly wider ecosystem, suggest a global market value of $27 billion by 2010.
- Closer to home, Jupiter Research has forecasted that U.S.-based revenue for mobile TV will reach more than $500 million by 2010.
One certainty: a battle royal is quietly erupting over who gets which slice of this rich pie. Jupiter’s revenue projections are based on 5 percent of the expected mobile subscriber base engaging in paid mobile TV subscriptions with their carriers.
Jupiter’s approach is indifferent to the current fog of competing technologies and business models and thus a reasonably good springboard for a far simpler discussion of the end user and questions surrounding the shape of mobile TV services and hurdles to consumer adoption.
According to Julie Ask, senior analyst with Jupiter, her firm asked consumers first if they had any interest-pricing aside-in receiving TV on their mobile handset and then looked at pricing models. Overall, 81 percent of U.S. wireless consumers said they would not pay their carrier for live TV, which tops the list for interest or for live audio or canned video. That does not imply, however, that 19 percent are willing to pay, she said, thus the basis for the modest projection of 5 percent uptake over five years. Pricing models did not reveal much insight either, but Ask said that Jupiter’s data will be clearer when year-on-year surveys are completed. (The second one is forthcoming.) Indeed, market research firm Telephia recently announced a mobile TV user panel to measure attitudes and behaviors in order to winnow fact from speculation.
Not ready for prime time
Of course, well-informed speculation on the mobile TV space has already generated a good deal of intelligent discussion on consumer attitudes, much of it cautionary.
“I don’t want to be the naysayer,” said D.P. Venkatesh, chief executive officer of mPortal, which provides platforms to enable content on mobile devices, particularly in ease-of-use issues. “The opportunity is huge. But mobile TV is not ready for prime time.” Venkatesh espouses three basic points. In contrast to a life-long exposure to the in-home television experience, many users will find small, mobile screens “a difficult thing to get over.” Technology will matter to the business model, in that 3G networks will be capacity-constrained by all-you-can-eat pricing models that draw too much usage. “It’s got to be cool enough for you to sign up, but not cool enough to watch all the time,” Venkatesh said. In contrast, he said, broadcast technologies will be more efficient for downlinks, while cellular networks will play a role in the uplink for requesting service or interactivity with the content. Finally, content will have to be well considered in light of screen size, context (where and when will the user find it useful?) and length, both from user attention spans and battery life considerations.
Consumers aside, the players in the mobile TV space each are pursuing business models that position the technology and its uptake as the solution to flagging profits elsewhere.
“The number and type of participants is deep and wide,” said Venkatesh. “And each one thinks it’s going to win.” This familiar scrum lies at the root of today’s scrambled picture of mobile TV offerings and plans. “To the extent that people collaborate, the industry benefits,” Venkatesh pointed out. “Typically, however, the industry gets ahead of itself” by pursuing separate standards and hyping the general opportunity.
The NPD Group, in a recent report, cut to the chase on the consumer front as well.
“Video has a long way to go before consumers are ready to sign on in a big way,” said Drew Hull, NPD’s research director for mobile content. “At this point, it’s especially important for wireless operators, service providers and video content companies to understand the mindsets of mobile-phone users if they want to position themselves well for future success in marketing video for mobile phones.
“Many consumers are calling for live TV and lower pricing before they’ll start watching video on the smallest of screens,” Hull added. “But considering those that are likely to use it, namely, high-income young-adult wireless subscribers, it might serve the industry well to lower the cost barrier in order to reach more of this lucrative market.”
Collecting content
Rob van den Dam, Europe, Middle East, Africa lead for the telecom sector with the IBM Institute for Business Value, in a report titled “Primetime for Mobile Television,” makes the obvious point that consumers will only pay for mobile TV if they are satisfied with the content, price and user friendliness. (IBM offers solutions linking the network environment with the broadcasting environment, among other mobile TV-related services.)
The “right content at the right time” is shaping up as a major factor, according to van den Dam. Consumers may be motivated to watch mobile TV in their spare time (e.g., while traveling), for favorite programs they might otherwise miss, for catching-up with breaking news and/or as a handy diversion during a break from work. Zombifying for hours is highly unlikely.
Successful mobile TV content, according to van den Dam, will find a way to complement traditional television. For instance, mobile TV service offers greater personal choice than traditional TV in terms of context-location and timing-and content personalization. A combination of broadcast mobile TV technology and Internet browsing via cellular networks may create a new level of interactivity that also promises a highly personalized experience by enabling user polls, user forums, merchandizing and on-demand downloads.
Van den Dam echoed Venkatesh in suggesting that critical elements for a successful consumer experience include proper pricing models (bundled, tiered, flat-rate pricing or metered pricing/pay per view), easy-to-use devices and power consumption improvements. Picture quality that does not deteriorate in bright sunlight may also be critical, van den Dam added.
