|Topic:||Free-to-air mobile TV broadcasting in Europe|
Weijie Yun is the CEO, Co-Founder of Telegent; he is responsible for setting the company’s strategic vision. Dr Yun is a serial entrepreneur; prior to Telegent, Dr Yun led marketing and product management at Berkana Wireless, Inc., later acquired by Qualcomm. Dr Yun also served as the founding President and CEO of AIP Networks and was a founder and director of SiTek, Inc., a spin-off resulting from his work developed at BEI Technologies’ Microengineering Technology Center. Weijie Yun received his MS and PhD degrees in Electrical Engineering from the University of California at Berkeley.
In most of the world, mobile TV has grown slowly. There are several hardware standards and there is no widely accepted business model. Free-to-air mobile TV, on the other hand, lets mobile handsets manufactured with an inexpensive TV chip access normal broadcast TV. Since operators do not need to invest in expensive infrastructure or content, they can market these phones cheaply and profit from premium services and simultaneous SMS. Broadcasters also like these phones since they expand their viewer base.
The wireless industry is in a state of unrest, with operators looking for new ways to generate revenues during the economic downturn. Mobile operators are in a particularly difficult situation trying to maintain their customer base and minimise customer churn, whilst growing their subscriber numbers to remain competitive in a crowded market. As such, they are looking for new services that will generate revenues and prove valuable to consumers. In addition, broadcasters are facing challenges similar to those in the operator community. Dwindling advertising revenues and changes in consumer viewing habits are forcing them to rethink the platforms they use to distribute their content and look at new ways of generating revenues. Fortunately, help is at hand in the form of a new handset feature that is gaining traction in a variety of markets and which does not require substantial upfront investment. Can mobile TV fill the revenue gap? Europe, catching the mobile TV wave In Europe, mobile TV uptake has been gradual with most of the industry discussion centred on spectrum and standards – that is the mechanics of how to create a network ecosystem for mobile TV service. In 2008, Viviane Reding, the European Commissioner for Information Society and Media announced that the European Commission would be endorsing the DVB-H digital standard as the preferred technology for mobile broadcasting. The leading opinion has been that if the industry can overcome barriers to a global mobile TV ecosystem – such as fragmentation of digital mobile TV standards – then the way will be clear for operators to succeed in offering consumers a subscription mobile TV service. Globally, however, a different approach to mobile TV has been gaining momentum. Free-to-air mobile TV – that is over-the-air terrestrial TV programming delivered to a handset via an antenna – has been rapidly gaining acceptance among consumers worldwide. In addition to rollouts in Japan and Korea, two countries where mobile TV is considered most successful to date, more than 20 million consumers bought TV handsets that receiving free-to-air terrestrial analogue broadcast signals between mid-2007 and yearend 2008. Adoption rates around the world suggest consumers prefer content delivered by free-to-air mobile TV, and the economic downturn has put economic pressure on the industry that increases the appeal of this model to the operator community. With consumers cutting their mobile content spending, and operators less likely to make large capital investments in mobile broadcast networks or upgrades to their 3G infrastructures, the free-to-air model emerges as a compelling way to drive mobile TV forward. The research house Screen Digest, in fact, now predicts that by 2012 more than 62 per cent of the world’s mobile TV consumers will be free-to-air viewers. Does free-to-air mobile TV benefit operators? Initially, one would assume that a subscription mobile TV service is a more compelling business model for operators. It provides direct monetisation of a value-added service, with ROI readily calculated by measuring the number of subscribers against the cost of service delivery. Free-to-air mobile TV, in contrast, enables TV simply as a free feature on the handset. An obvious question, then, is that while consumer response to free-to-air mobile TV has been quite strong in retail handset markets and in operator-centric markets in Latin America, why should European operators embrace it? Let us first consider consumer uptake. Consumers around the world have responded quite favourably to free-to-air mobile TV because it delivers the live programming that they are familiar with and watch on conventional TV sets. Consumers who are away from home simply need to hit the ‘TV-on’ button on their handset to immediately access shows they already know and would watch if they were sitting on the living room couch. Mobile TV networks, in contrast, do not have rights to this programming. Content delivered via operator networks must either be licensed or developed, requiring consumers not only to become familiar with new programmes and line-ups, but also to see enough value in the content to pay a monthly service fee. Given that the first step in driving widespread mobile TV adoption is getting consumers used to watching TV on their handset in the first place, the free-to-air mobile TV model provides a more compelling approach by providing consumers with access to the same content that they already know and love. Free-to-air TV SMS-TV feature Let us next look at the cost of service delivery. Mobile TV network deployments are quite expensive. They require the acquisition of spectrum, deployment of infrastructure, and the licensing and development of content. Free-to-air mobile TV, in contrast, relies on the existing broadcast TV ecosystem, using spectrum that is already allocated, infrastructure that is in place and globally accessible, and content that is already developed and popular with consumers. All that is required to deliver TV to the handset is the integration by the handset manufacturer of a free-to-air mobile TV chip inside the mobile phone. Even without direct monetisation of the feature, the free-to-air mobile TV feature can benefit the operator. It can differentiate an operator’s offerings, enabling them to retain and attract subscribers in a difficult economic environment and to position themselves as a technology leader in their market. It can be delivered with related revenue-generating services such as SMS, enabling consumers to simultaneously text while watching TV. It can pave the way for premium content offer, which consumers are more likely to pay for if they are already used to watching free-to-air TV programmes. Finally, it can be offered on any price handsets – not just high end handsets with 3G or bundled services – expanding the impact of mobile TV from a niche high-end market segment to all consumers. Not just for mobile While most of the industry discussion regarding TV on-the-go has centred on mobile devices, there are innovations in the PC sector that are also important to watch. The emergence of the netbook – a highly portable, media-centric device – also makes it a compelling platform for the bundling of TV capability. Free-to-air broadcast TV on these devices allows broadcasters to reach a younger, tech savvy audience with live content, and Internet connectivity can enable access to ‘catch up’ on TV programmes. Hybrid analogue and digital reception, in particular, allows consumers to access TV on these devices where digital terrestrial signal is available, falling back to analogue where it is not, broadening the possible use cases for TV on-the-go. While PC TV accessories have been available for some time already, technical innovation that make these accessories easier to use combined with the emergence of media-centric devices such as netbooks is reigniting consumer and industry interest in this capability. The role of broadcasters Free-to-air mobile TV benefits not only operators, but broadcasters as well. Broadcasters have deep experience when it comes to delivering live programming to the consumer. However, mobile TV networks introduce the operator as a new intermediary between the broadcaster and the consumer, requiring operators to develop expertise in content programming and advertising delivery. While operators are experts on mobile services, broadcasters are the experts when it comes to TV content and engagement with TV advertisers. Free-to-air mobile TV enables both the operator and the broadcaster to focus on their core competencies. Operators can define and deliver value-added services that complement the TV feature and drive service revenue. Broadcasters can reach a broader TV audience through place-shifting, critical at a time when advertising budgets are being cut due to the economic downturn and competition from other media sources is rife. ‘Free’ generates ecosystem value Free-to-air mobile TV can deliver significant value to all participants in the television value chain. It provides consumers with familiar content that they already like to watch. It provides operators with a way to increase consumer value without requiring significant investments in new TV ecosystems. It leverages broadcaster core competency in content creation and advertising relationships and expands TV viewing audiences. In summary, free-to-air mobile TV can spur the wireless industry with an offering that is inexpensive to implement yet delivers high value to consumers.