What future for broadcast mobile TV?

Nowadays operators and media players are looking for common revenue opportunities. In the last years they have been collaborating through the launch of many new TV services, such as IPTV and mobile TV. In research for higher quality mobile TV experience, a new trend is up with broadcast mobile TV.

Forecasters argue that this market should explode in the next 2 years, but the first services launched in Japan, Korea, USA and western Europe are experiencing difficulties to become profitable. With the knowledge of these first experiences, players involved in the development of upcoming European services need to make key decisions for the future.

A new approach So far most mobile TV services available are provided through common mobile networks such as 2,5G or 3G. The user gets TV service delivered to its terminal thanks to unicast transmission, which means that a specific link is created everytime the user wants to use the service. Unicast mobile TV should benefit from improved quality thanks to forthcoming mobile network technology called 4G or LTE (Long Term Evolution), providing increased capacity broadband.
Broadcast mobile TV technically differs from ‘traditional’ cellular-based mobile TV as it uses a dedicated broadcast network in a similar way to Digital Video Broadcast networks such as French TNT. The main interest for this technology lies in higher definition experience and improved service continuity.

Broadcast mobile TV as a high potential market competing with next generation cellular networks
According to ScreenDigest, mobile TV (both cellular-based and broadcast) should pull more revenues than mobile music and mobile games industries combined thanks to 4,4 billion euros of revenues on the global market in 2011, and 1 billion euros in Europe The market size should rapidly become substantial as mobile TV could cover half a billion users in the next five years, says Cantab Wireless. ScreenDigest experts also argue that broadcast mobile TV will become the leading solution with 60% market share in 2011, but it might be threatened by forthcoming LTE networks, that should be operational from 2012.

Mobile TV revenues forecasts in billion euros(source: Screen Digest 2007)
Convergence between telcos and the medias These promising figures are appealing both for telecom and media players. On one hand, TV broadcasters have to deal with a more and more competitive environment and a TV advertising market that reached maturity. For example in France, TV advertising investments fell down by 4,5 % in 2008 (estimation by Hersant Media), leading media groups to diversify their businesses toward new channels. On the other hand mobile operators are developing initiatives to deliver value added services to their customers and create new revenues above ‘traditional’ voice services. The collaboration between French operator SFR and TV broadcaster MTV – including dedicated contract, phone and MTV content – brings us an example of a successful collaborative offer as it reached 1 million subscriptions.
Difficulties to reach cost effective solutions By contrast with successful cellular-based solutions, broadcast solutions need new spectrum allocation and dedicated infrastructure, which requires big investments. In France the cost for the chosen DVB-H infrastructure is estimated at about 60 million euros a year for the first 10 years to cover 1/3 of the territory. This aspect raises hesitations among operators, media players and infrastructure providers wondering about how to share this investment.

In addition, existing business models do not meet success so far. The fee-based model set up in Italy, Germany and USA relies on stable subscription revenues, but it reaches a narrow audience because of a too high price for a service that differs from consumers’ habits. Besides this the free-to-air model (financed by advertising) adopted in Asia generates audience growth but poor revenue performance. For example in Korea, the service offered by TV Channel T-DMD reached 10.3 million users, but the revenue generated is far too low (6 million USD) compared to operating costs (40 million USD).

Synchronization and content strategies as key success factors
One key question to make broadcast mobile TV a successful business is how to coordinate players driven by different interests. Operators’ strength lies on knowledge in mobile business models. A fee-based model would give them market leadership through the benefit of contracts subscriptions they provide. TV broadcasters’ strength is rather based on established relationships with content producers. A free-to-air model would give them an opportunity to get direct profits from advertising.

In Austria the regulator KommAutria required players to sign cooperative agreements and elaborated an incentive free offer distributed for 6 months to encourage users’ subscription. Today this ‘cooperative model’ is investigated with scrutiny by players willing to invest the market.
Another key success factor is providing contents that meet customers’ expectations, which raises different positions. In France government representatives advice programs to be different from traditional TV whereas other approaches argue customers expect similar programs whatever the terminal is.
A mid term vision.

Broadcast mobile TV should rapidly attract a rising number of users whereas operators, broadcasters as well as content owners may not benefit from significant revenues before 2 or 3 years. However this topic requires quick action from players in order to start building up a customer base which will later become mature enough to move toward a subscription model before LTE (4G) networks become operational. Operators not investing now in this market will soon tackle with the risk of missing potential benefits that could be reached through a business model based on a combination of contracts and advertising profits. Above any technological choice (broadcast vs cellular networks) the future of mobile TV is a matter of business model decision.


The iPhone vs Android War

This is going to be a long, hard war and there will be no clear winner. Let me start by saying that both phones are exceptional devices, and even as I’ve made my transition to Nexus One, there are days when I lust after the 3GS for seemly no reasons reason other than its sheer sexiness.

So, why did I switch to Nexus One? A combination of geekiness and practicality:

Openness: Let’s start with the geekiness. I like the fact that Android is open, and that developers have more freedom to develop great apps.  I like the fact that Steve Jobs doesn’t obsessively reign over the inventiveness of the entire mobile computing world, blocking competition and innovation in entire categories that potentially compete with Apple’s revenue streams. Browsers, podcasters, Turn-by-turn directions – Apple has selectively blocked anything potentially competitive. Mac freaks are prone to throwing hissy fits about the big bad PC, have they looked at the developer terms for the iPhone?

Multi-threading: Multitreading may seem like an obscure requirement, but its actually quite mainstream. Why should you get kicked out of chat everything you recieve a call? Why should your online radio station stop playing if you want to browse through your notes? Basically, why can’t applications run in the background? Android does multitasking beautifully. Notifications are subtle and effective, and running multiple apps has apparently little or no impact on battery life.

Tweak-ability: There are a myriad setting you can play around with until the feel is just right for you. iPhone has made improvements over time in its configurability, but its still not quite there. For example, I can specifically position icons on an empty screen in Android. May not seem like a big deal, it isn’t, but its a tweak that improve usability for me. Can’t do it on the iPhone.

Navigation: While I enjoy the minimalism of the iPhone, a single home button is too constrained. I like the navigation buttons on the Nexus One (and other Android sets). When I press Search, it brings up a context sensitive search bar. When I press Menu, it shows the settings and options available. The presence of context sensitive buttons makes the user experience more consistent, and the navigation better anchored.

Widgets: Widgets are little apps running on your home screens, making information and functionality available right up front. You can have todos and upcoming appointment showing on the home screen, or a stream of facebook status updates, or weather and news…basically anything you want, accessible right from the home screens. Android, especially the HTC variety, come with great widgets out of the box, and of course developers can build any widget they fancy. iPhone, so far, is “widgetless”.

The Devil’s Advocate

That, in not quite a nutshell, is why I went the way of the Android, but there’s a little more to be said. While the applications in the Android store are steadily growing (20,000 the last I checked), that’s only about a fifth of what it is on the iTunes. I don’t think this a particularly useful measure, since the number of apps is immaterial, 95% of  users need 50 great apps. These apps exist on both platforms. There are some things that Androis, and Nexus One in particular needs to improve upon:

A desktop app: I get the whole cloud thing, but contrary to what most engineers in Google may believe, people on earth still use desktops. Google needs to make it easy for people to  browse and install apps, sync music, download podcasts and sync Outlook/Lotus Notes from their desktops. In terms of managing podcasts and music, iPhone/iTunes is light-years ahead of Android.

Hard buttons: The navigation buttons on Nexus One are soft, which basically means they’re part of the screen and operate on touch. Having hard buttons (like HTC Desire) would be much much better, as sometimes you have to press multiple times for the soft buttons to ‘click’.

Oleophobic Coating: In plain language, Nexus One needs an oil repellent coating (which the iPhone 3GS features). N1 is a smudge magnet and the sensitively of the touch screen seems to go down as the smudges get thicker.

There you have it, a run-down of the iPhone vs Android war. To summarize, iPhone and N1 are both exceptional devices, but to put it in the words of Gina Trapani“iPhone’s for sheep, Android’s for geeks”. And I’m no sheep.