C2Mmonthly

Received wisdom suggests that cost of service, and by extension confusion of business model, have always contributed to hampering the spread of mobile TV services. The last couple of months have seen the European launch of something that may knock such supposed wisdom totally: free to air mobile (FTA) TV. Such services are catching on fast around the world, especially in Asia. Vodafone in Germany set the European ball rolling with the introduction of FTA mobile TV based on the DVB-T standard after being denied the opportunity to offer DVN-H services. Is this the first sign of the irresistible rise of FTA? We asked industry experts for their opinion...

Kamil Grajski, President, FLO Forum >> The answer to the question of whether free-to-air Mobile TV can succeed in Europe is a resounding yes. Mobile TV services, whether advertising revenue supported free-to-air, or subscription-based pay-TV, or some combination, all have one thing in common: the need to sustain a viable business model. As these are early days in Mobile TV, flexibility, experimentation and adaptation based on consumer response are key. Free-to-air TV is something consumers certainly understand. One can imagine a baseline free-to-air offering of content similarly available today via terrestrial broadcast, with premium services attached to unique events, such as major sporting or entertainment events. Although, while consumers clearly understand free-to-air TV, and there are even signs of regulatory trends to mandate free-to-air services, there remain all the usual barriers to rapid adoption of mobile TV in Europe, namely spectrum harmonization, spectrum licensing and content regulation.

Dino Bekis, VP New Business Initiatives at Broadcom >> We believe free-to-air is the only approach that will work to establish a user beachhead for Mobile TV. Parallels to the EU can be found in South Korea and Japan to some degree. Government support of a common standard or technology in addition to some funding incentives took the mobile phone attach rates on the two countries to 100% over a 3-year window. With adoption, the providers could consider adding incremental high-value broadcast channels as subscription services on top of a free-to-air foundation.

John Maguire, General Manager Consumer Mobile Business, S3 >> There’s no other mass market that has taken off without FTA in some form or other. [But] FTA is not the only part of the answer. There’s more to it than that: FTA if that doesn’t incentives the owners of scarce resources like mobile spectrum and infrastructure and premium content owners. The whole point in the value chain is there has to be an incentive to put things into the market.

Peter White, Principal Analyst and Founder of Rethink Technology Research >> FTA needs a viable business model. To make money from FTA, the problem is that the broadcasters can’t do it on their own. Customers, when given the choice of FTA digital video on a handset, typically automatically accept it. It’s a no-brainer; such as in Japan and Korea. There’s a staggering market penetration for two to three years’ of effort. If you can find an economic reason to give FTA to people, then people will want it: as do the broadcasters.

Vinod Valloppillil (Vice President, Product Marketing) at Roundbox >> Currently, the mobile broadcast industry is focusing on delivering a Premium Television experience to consumers. This means that services like MediaFLO in the United States or DVBH in Italy explicitly model themselves after premium cable and satellite television offerings and provide a bouquet of programming (typically 5-15 channels) delivered to consumers for a monthly subscription fee. The problem, however, is that while premium, terrestrial TV is very successful it’s the product of over 50 years of service evolution that got its start with a very broad consumer experience with Free To Air, ad-supported television. And, as the massive penetration of Cable / Satellite coupled with the ubiquity of 30 second advertisements demonstrates, the two models are quite complimentary. We anticipate that a similar evolution path [to Asia] will be seen in the US where initiatives like OMVC will end up being complimentary to premium services. Similarly, there is a lot of talk in Europe at the moment for a free/premium service pairing between DVB-T and DVB-H.

Sam Sheng, CTO of Telegent >> It could be like basic cable; and premier cable. One basic model is for say [an operator] to charge €2 per month to enable FTA on handset but then also offer tiered services on DVB-H with specialised content for an additional €10 per month. One of the key issues with DVB-H right now is acquiring content and there’s been a lot of negotiating for specialised content that you’d want to pay a premium for. Germany is the test bed. What is the feature set that is going to enable operators to maximise revenue? What does the market really want?

Tim Sheppard, business development manager broadcast market Europe, Cisco >> I don’t believe that FTA is a real alternative [in mobile TV] right now. T-DMB in Korea is really a specific technology for mobile reception. FTA could be done in lots of different ways such as taking existing DTT on a handset such as DVB-T probably sells a few more handsets, but in reality what you [can’t really] get is reception indoors, or in a shadow or in rain etc. I don’t think it’s an alternative to the other mechanisms; basically, if anyone is going to do a specific broadcast to mobile TV in Europe it’s going to be DVB-H [based].

Alban Couturier, Marketing Manager Thomson NIS >> FTA mobile TV is always going to be commercially difficult, because the capital expenditure of building a new transmission network is significant. The real issue is how service providers balance the level of the subscription with other sources of revenue. End users will accept the need for a small subscription for mobile television, provided the quality and content is high and the additional subscription is low.