The latest frontier of convergence is the broadcasting of TV content to mobile phones. The media industry is becoming excited about the possibility of offering broadcast TV content to mobile handsets - but is there a robust business case for operators when their 3G spectrum remains under-utilized? In a new report, market analyst Datamonitor expresses concern about some of the astronomical forecasts currently in the market place with regards the growth prospects for broadcast TV to mobile services. With radio spectrum rights - a crucially significant factor - as yet still largely unresolved in many markets, the planned commercial launches could yet be delayed.
Adrian Drozd, Senior Media and Broadcasting analyst at Datamonitor comments "Today, consumers are able to download short video clips over 2.5G and 3G networks. In the next few years broadcast networks and next-generation handsets will be deployed enabling them to watch broadcast TV on their mobile phone screens. However growth of mobile TV may be limited by the problems over spectrum allocation, the high price of handsets, consumer unwillingness to pay an extra $10/month for mobile phone service and operators wanting to push 3G video services, not broadcast TV to mobile services. As such, Datamonitor takes as conservative outlook for broadcast TV."
Mobile video services already exist, but not efficient for TV
Mobile operators are already offering video download services to their customers on 2.5 and 3G networks, but these are not true broadcast TV services. The content is streamed to subscribers' phones when it is requested using the operators' 2.5/3G network infrastructure. There are fundamental differences in the nature of unicast/bi-directional mobile phone networks and one-way/multicast broadcast networks. It is an inefficient use of limited network capacity to use mobile phone network to transmit a multicast service.
World domination battle: DMB vs DVB-H vs MediaFLO
There are essentially three different technologies fighting it out to be the standard for mobile TV broadcast technology - DVB-H, DMB and MediaFLO - with a fourth, ISDB-T, unlikely to gain any traction outside of Japan. DMB is the only technology currently being used in commercial services (in South Korea). Commercial services from DVB-H and MediaFLO are expected to launch by the second half of 2006. Each technology has its own pros and cons, but in global market share terms Datamonitor expects DVB-H to be the long-term leader.
Substantial requirements placed on handsets
The technical challenges for the mobile operators' networks are massive, but they are not alone; the handset manufacturers are also under considerable pressure themselves. If the handsets do not aesthetically appeal to consumers the services will not succeed - think the slow take-up of 3G partly due to big, clunky phones. There are clearly serious issues to resolve between handset size and screen size, as well as battery life, and perhaps most importantly, cost.
Content security is critical to business models
Broadcast TV to mobile business models are currently being developed by mobile network operators and content owners. Most are based upon consumers paying circa $10 per month for the mobile TV service. But if they're unwilling to pay it on a regular basis then this new business opportunity will prove unprofitable. The hacker community is certain to focus some of its efforts on this new market, and software patches which enable free access or hacked SIM cards could become a significant problem. Robust security against such hacker activity will be critical.
Choice of content is key - and it's got to be shorter
The provision of content will be one of the key deciding factors as to whether consumers are going to appreciate the service, and ultimately pay for it. The underlying questions are whether the main TV channels are going to be available on mobile TV, special mobile TV channels will be developed or, probably more likely, it will be a mix of both, existing and new channels.
Early results have shown broadcast TV to mobile viewers typically watch a maximum of 25 minutes per day. Short movies, news, cartoons and sport highlights would therefore make excellent content for mobile TV. Full-length movies are less likely to be watched on mobile phones due to the relatively small screen size and the necessity to constantly hold the handset. In long car journeys larger screen devices such as portable DVD players will, like today, be more prevalent.
Driven by such factors, Datamonitor has created a conservative forecast for the take-up of these services and is expecting 69m global subscribers in 2009, generating revenues (although not necessarily any profits) of US$5.5 billion.
