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Wednesday, November 08, 2006

Mobile Telly - what next?

Peter Erskine, CEO of mobile network operator mm02 at 3GSM conference in February 2006 warned about "pushing new technology at consumers that isn't quite ready." The telecom industry, he said, has been known to do this, scaring consumers away instead of attracting them to new services. The underlying inference of course was a number of technologies from the recent past. Notably, WAP, the Wireless Application Protocol pushed out on GSM networks that was initially a disaster. Also, 3G, which is still desperately trying to re-coup the enormous down payment made by the global networks for access to spectrum in a number of countries. However, the more immediate reference was to a new technology around which there is an almighty scramble – namely, Mobile TV.

A Mobile TV service, which is broadcast to handsets from television towers, offers huge growth potential but is still not without its technical and spectrum challenges, according to Erskine.

"The broadcast service has much better picture quality than the streamed service, plus it offers more channels," he said. "We're very interested in it."

O2, acquired last year by Spain's Telefónica SA, has conducted a Digital Video Broadcasting-Handheld (DVB-H) test in the U.K. Participants in the test watched an average 3.5 hours of mobile TV per week, according to Erskine. More than 80% of them said they would subscribe to a broadcast mobile TV service, he said.
Erskine’s comments were backed up at the same conference by Peter Bazelgette, Chief Creative officer at Endemol: "We need to put time and money into developing creative applications."

Endemol are the company behind the pioneering Big Brother concept which has paved the way for media convergence in terms the interaction between mobiles, internet and the television broadcast. In Ireland, both O2 and 3 have obtained test licences from ComReg to conduct Mobile TV trials over DVB-H, one of the competing mobile broadcasting technologies. Vodafone have eschewed the DVB-H route and instead have teamed up with Sky to offer a 3G stream of Sky programming through subscription.

So what exactly is Mobile TV?



Source: Alcatel: Mobile Broadcasting: Extending The Mobile Experience with Efficient Content Delivery

Many readers may remember the small mobile TVs that were available during the eighties – mainly in black and white - and some were even built into rather lumbering wrist watches. In many ways, the technology is still the same – except it is now a digital receiver rather then an analogue receiver. Where confusion sometimes arises is the perception that Mobile TV is part of the operators’ data networks that manage voice calls and other data. In fact, it is completely separate and that is what perhaps makes it puzzling for the network operators. In the case of DVB-H, the most popular mobile broadcasting technology, the digital broadcast signal is transmitted from the same aerial that normal digital terrestrial television signals are broadcasted from. Instead of an aerial on your roof, your mobile phone picks up the signal through an aerial built into your phone. The signal is decoded within the circuitry of the phone – much like a built-in set top box – and displayed on your mobile screen. You choose the broadcast, in much the same way as you might choose your network when you are roaming abroad with your mobile.

So in many ways, mobile TV is identical to traditional television broadcasting – the phone picks up a one-way broadcast stream and displays it. One can understand why the broadcasters are interested, but why are the network operators interested if it distracts you from making lucrative phone calls or accessing data over their own networks?

Well, at present, the business case is still unclear and for that reason, certain operators, like Vodafone, are concentrating on their 3G business. However, what is certain is that the handset manufacturers – who are eager to break away from the hegemony of the mobile operators – are keen to build these extra technologies, like DVB-H and Wi-Fi, into their phones to increase sales – especially to a younger demographic. Also, there is a business case to be made that the operators can charge subscription fees for access to the Mobile TV broadcast. Likewise, the readily available back-channel provided by the mobile network is also another potential source of revenue; in other words, interactive TV on your phone. You can vote, send texts, send videos, instant message with your favourite television programme etc. Likewise, you could request clips or videos from your favourite TV programme which could be sent to you down the 3G network. Either way, there is a valid case for network operators generating some sort of revenue model.
For the broadcasters and content creators, it is just one more platform for them to reach their audiences – and like wise for the all-important advertisers.

Currently, DVB-H is the front runner in terms of technologies. However, there are other competing mobile broadcasting technologies – such as Media Flo (a proprietary technology from the US) and Digital Audio Broadcasting (which originally was formulated for Digital Radio). Also, MMBS (Multi-Medi Broadcast/Multicast Service) is a technology that uses UMTS specifications (i.e. a 3G Network). However, a telecommunications system, even one implementing a multicast element such as MBMS, is fundamentally a symmetrical bi-directional system, i.e. one-to-one. Thus, networks can easily become overloaded when they implement broadcast services such as video – particularly if they prove popular.

A second point is that the revenue that you can generate per minute per subscriber is gong to be less than the core voice and data services offered over 3G networks. This would suggest that operators would be better off using their telecoms network for the delivery voice/data services, and another one (with a lower cost per bit) for the delivery of video and other broadcast services. This, again, points inextricably to DVB-H as the broadcasting technology of choice – especially in a European context.

DVB-H trials are now underway in Helsinki, Dublin, Berlin, Oxford, Pittsburgh, Paris, Madrid, Sydney, South Africa, The Hague, Bern and Erlangen, In October 2005, Telecom Italia Mobile (TIM) and media group Mediaset announced an agreement to broadcast live television to mobile phones in Italy from 2006 using DVB-H technology. TIM said it would provide broadcasts of Mediaset's three TV channels and football on mobile phones for five years from 2006. The commercial launch in Italy was made in time for the world cup – and outlines the fact that sporting events are a major driving force for Mobile Broadcasting.

In Ireland, O2 DVB-H trials took place during the Ryder Cup (which was sponsored by O2) and although guests were asked not to bring mobile phones, a limited few were allowed to use DVB-H enabled phones to view RTE1 and Sky Sports broadcasts of the Ryder Cup.

Ryder Cup Mobile TV trials

Anecdotally, the immediate benefit that users saw was the ability to follow the action of live sporting events as they happened concurrently. Wimbledon would be another case in point. It also suggests a potential market for broadcasting at entertainment events as narrow-casting. This would mean setting up a broadcast transmission for a limited geographic area which might include backstage interviews at music festivals or added value material alongside the main show.

But, other then sporting and entertainment events, will anyone really want to watch television on a mobile phone?

The Finnish Pilot (http://www.dvb-h.org/Services/services-helsinki.htm) trial has shown that about 60% of the viewers of the trial felt that the service would become popular. Further, 40% of viewers felt that they would either acquire a DVB-H capable phone at the time of purchase of the next phone, or when usage has become more common.

A further 47% felt that they could well subscribe to the service and acquire a DVB-H phone in the future. In short, the trials so far show that people like watching TV on mobile phones. Similar results were reported in the interim report on the Oxford Trial by O2. (http://www.dvb-h-online.org/Services/services-oxford.htm)

In a recent focus group in Dublin that Calico Media organised, feedback from potential users from 18 -24 were, included the following:

“The focus should be kept on things which people 'need' to see; something which, in missing, they may be putting themselves at a disadvantage. My own personal example would be sports - being able to watch Match of the Day or any sort of highlights programme on my phone would most certainly be something I'd subscribe to - even on a match-by-match basis.

Coronation St, Eastenders etc. would also be viable options, especially given that they're broadcast at a time when many people are travelling home from work….People will be watching these things to be informed - to a plotline, a scoreline, etc - rather than to be entertained.”

In many ways, these comments get to the nub of the problem: Mobile TV is still essentially an old-fashioned broadcast medium – albeit that the transmission is digital. What the younger demographic are looking for and what the increasingly fragmented television mediascape is trying to provide – is content on demand. The audience progressively want what they want when they want it. To this degree, Mobile TV broadcasters and stakeholders may need to collaborate with network operators to provide a bit of both. Mobile TV doesn’t NEED to involve anyone other than the broadcast network operator, and the service provider. However, there are many reasons why a co-operative approach may be judicious. For example, many countries have mobile phone models which see the phones being subsidised by the operators, and to have mobile TV on such phones would require some co-operation between the mobile TV operator and the telco. Billing is going to be a key element to the success of mobile TV, and telecoms operators typically have sophisticated billing infrastructures in place – and a subscription model is that favoured by viewers according to the DVB-H trials underway.

On the other hand, there are countries where the regulatory model prevents free-to-air broadcasters from becoming involved in pay-TV services on terrestrial networks. In such an environment, DVB-H could be considered for broadcasting to handhelds, e.g. suitably equipped mobile phones, PDAs, etc. And in this environment, the co-operative approach may have less benefit.

Calico Media has been behind a Pilot Network Mobile TV trial project that has been developed recently in The Digital Hub with the express intention of bringing all these stakeholders together to look at the wider possibilities and issues of Mobile TV and how it can appeal to a wide audience. More details will follow as the project gains traction so watch this space!

posted by Neil Leyden @ 5:31 p.m. 0 comments