Mobile TV must find business model that clicks with viewers

LAS VEGAS – “There is an expression – if there is something that people want to watch, you can broadcast it on a rock in the desert and they will watch it,” Frank Nein, co-founder, partner and senior VP at Lexicon Digital Communications, said on a crowded panel at last week’s Mobile TV & Video Summit at the National Association of Broadcasters Show.
Discussions quickly took shape around what emerging business models each panelist saw that could give the medium a much-needed jolt into more consumers’ habits and daily routines.
Nein argued that consumers are finally pushing back on the growing pile of charges for services they get in multiple places. “Ultimately people are going to watch what they want to watch,” but some business model needs to supplement the cost of delivering that content, he said.
“The term ‘content is king’ has finally come into play,” he said. “Hollywood is actually going to find a way to get involved in this.”
Ian Locke, VP of strategic alliances at Envivio Inc., said the U.S. mobile TV market is unique from the rest of the world because most everything is managed by third-party providers while providers hold more control over the main point of distribution elsewhere.
Indeed, systems like MediaFLO USA Inc. manage everything from programming to infrastructure and delivery, but other systems like MobiTV Inc. and GoTV Networks Inc. manage varying aspects of the service while still relying on the carrier’s network infrastructure and cellular delivery.
Because no hybrid model of live broadcast and on-demand, push-type programming has emerged; “most of the services are pretty rudimentary,” Locke said.
He and others foresee a model similar to cable, satellite and IPTV, where some channels will be offered free to air from local broadcast stations, for example, while premium content will carry a fee that could be subsidized with advertising. However, Locke said he was doubtful carriers fully grasped the ad-supported model yet.
Jack Hallahan, VP of advertising and brand partnerships at MobiTV, said he doesn’t think the industry needs to move away from subscription-based models, but finding a way to offer some free content from the outset would surely drive up interest among consumers and lead to more usage, which is what everyone on the panel wants.
MobiTV uses “freemium” as a play on words to describe an offering that would include a small monthly fee for some content while other content gets subsidized by a large advertiser, Hallahan said.
Advertising will thrive when more customers are able to opt-in directly to provide access to personal data and usage patterns, he said.
“Privacy without a doubt is a huge issue and it’s been a huge barrier to getting access to that data,” he said.
Moreover, finding that information might prove difficult as well, he said.
“Even though there is a ton of data – they (carriers) have a ton of data on you – but they don’t necessarily have it all in one place,” he said.
“Here in the states there’s no question there’s an addiction to television. It’s a 65-year-old killer app,” Hallahan said. Yet mobile television hasn’t become part of the social fabric, he said.
“I don’t believe that this is meant to be taking over cable television,” Hallahan said, adding that it could substitute some viewing on cable or satellite TV, but it will also serve as a supplement to big-screen viewing.
“They are definitely complimentary,” said Juan-Pablo Torres, business development director at Alcatel-Lucent’s mobile broadcast division.
Operators can’t simply deliver high- and low-audience channels with either broadcast or cellular technology, he said. Cellular third-generation networks make the most sense for unicast or on-demand content while FLO and DVB-H works best with high-audience channels, he said.
“It’s not just the United States, but it’s every country addicted to television,” Nein said to follow up on Hallahan’s point. “People really just don’t want to have to keep paying more money for their services.”