Investment decisions for mobile TV need to be made in light of expected market dynamics, substitute technologies and the competitive landscape, according to recent work undertaken by Analysys, the global advisers on telecoms, IT and media.
Analysys's study suggests that, whilst most observers expect mobile TV to become a multi-billion Euro industry by 2010, and will be well on the way to being accepted as a mass-market product by then, the supply-side industry dynamics are not yet clear. Many operators are actively considering broadcast technologies as a solution for mobile TV, but our research suggests that a decision to invest in a broadcast mobile TV network should follow a review of the underlying demand and analysis of the contribution that alternative technologies can make.
"Our research shows that there is an expectation of real demand for mobile TV services, driven by the premium that users place on convenience, and this could be expected to represent a significant revenue opportunity. However, recent evidence suggests that the mobile TV market could be significantly more complex than the existing terrestrial broadcast environment", says Jim Morrish, Senior Consultant at Analysys.
Specifically, the findings of the research recently undertaken by Analysys suggest the following points:
*Latent demand appears to be strong and a plethora of trials
worldwide have established that mobile TV is generally regarded by consumers as an appealing product, to the extent that it can be expected to become a mass-market proposition in the future. The same research indicates that mobile TV has a positive effect on average revenue per user (ARPU), and some mobile users can be expected to switch their service provider in order to secure mobile TV services.
*The consumption model is becoming clearer, with usage driven by
convenience, typically resulting in shorter viewing sessions than would be expected with traditional TV services. Usage in the home, in the office and whilst commuting are emerging as key consumption locations.
*The debate around the technologies that will be required to
support mobile TV in a cost-effective manner is moving beyond a simple discussion of the relative merits of tailored broadcast TV technologies (for example DVB-H vs DMB) and is now beginning to encompass complementary technologies. However, the debate does not yet fully take into account the expected consumption model and preferred content types in order to establish an optimal technical solution.
Morrish warns that the key to success in the mobile TV market of the future lies with matching the technical solution to the consumption model and users' demand for different content types:
"With some studies suggesting that up to 35% of mobile TV consumption will take place in the home, femtocells must surely figure in any operators' technical plans for offering mobile TV. Given the popularity of services that are non-real time in nature (for example, soap operas), consideration must also be given to the 'sideloading' phenomenon that is currently displacing some of the revenues that MNOs might otherwise have hoped to generate from music downloads. The real advantages of broadcast mobile TV technologies lie in the ability to provide a ubiquitous baseline of content, available on demand, with other technologies being used either where long-tail or interactive content is required, or where consumption is to some extent pre-planned."
"As each alternative technology is introduced, a new potential route is established from content owners to consumers, and thus MNOs must bear the risk of disintermediation, while content owners and aggregators have the opportunity to secure customer relationships. Mobile TV is potentially a huge opportunity, but it is not yet clear how the pie will be shared", Morrish concludes.