|Issue:||Europe I 2007|
|Topic:||Mobile TV – open issues|
|Title:||CEO and Chairman of Telekom Austria Group and CEO of mobilkom austria|
|Organisation:||Telekom Austria Group/mobilkom austria|
Boris Nemsic is the CEO and Chairman of the Management Board for the wireless business of the Telekom Austria Group. He is also the CEO of mobilkom austria. Mr Nemsic joined the group as mobilkom austria’s Division Manager for network planning and rose through a series of senior management positions to his present post. Prior to joining mobilkom austria, Mr Nemsic headed the departments for mobile communications development at Ascom and Bosch Telecom. Boris Nemsic earned his diploma as an electrical engineer from the Sarajevo Technical University. He was awarded his doctorate by the Vienna Technical University, where he also worked as a scientific assistant at the Institute for Communications and High-Frequency Engineering.
Mobile TV is a new medium, it is not broadcast TV cut to size. It is a personal interactive experience with content and services tailored for the medium. Much content will come from new producers, perhaps viewers themselves, but established broadcasters will dominate for some time. The unknown factors for mobile TV include: workable business models; the role of content providers, broadcasters and operators, etc. in the value-chain, and the impact of technologically driven competition from iPod-like devices, among others.
Against a background of growing market saturation, the mobile industry is looking for future growth in convergent services as well as in new content formats. The mobile handset is gradually turning into a multimedia and entertainment all-in-one tool. In the past three years alone mobile information and entertainment services have grown by more than 60 per cent worldwide. In the past, mobile multimedia was mainly associated with music; nowadays, mobile TV is taking centre stage. Mobile TV will mark the beginning of a new TV age, where personalization, unique programming and interactivity constitute its core elements. As opposed to traditional TV usage patterns that see families and friends gathering together in the living room, watching TV on a mobile phone is a more personal experience and the interactivity controls are immediately available. Mobile phones are personal, private and go everywhere. They offer the possibility to access content instantly via an electronic programme guide, EPG, and to interact with TV or radio stations by simply clicking a button. By using the mobile channel as an interactive feedback channel, users can also vote on TV programmes such as reality shows or place a bet on a football match. However, any new cultural formats and media need an adaptation phase to allow users to familiarize themselves with these new technologies and their applications. Customers have to learn that mobile TV is not only a lean-back medium but a lean-forward experience where they proactively decide ‘what, when and where they want to see’. A further advantage of mobile TV as opposed to classical TV, in addition to personalization and interactivity, is its implicit independence. This applies, for instance, to space as mobile TV can be watched anywhere. Besides, mobile TV works across technologies (UMTS, HSDPA, MBMS, DVB-H), both in terms of transmission technologies and terminals. No limitations of any kind are tolerated, especially with regard to usability – i.e. loading time and resolution. In fact, the attractiveness of mobile TV services is highly dependent on the availability of quality handsets, on high resolution colour displays, good user interfaces and long lasting battery life. Content format also plays a key role. The success of mobile TV is reliant on the availability of desirable, popular content to the end-user. Consumers need vital information or highly targeted content delivered to them in a compressed quantity. Simply to forward classical TV programmes to the mobile phone is not enough, and real time TV is not an appropriate format for mobile communications either, it is not available on demand. User groups have demonstrated that mobile subscribers have an average attention span of 90 seconds and the average customer is still sceptical about the ability of mobile TV to show time critical content such as news and sports. Moreover, battery life is still an issue. Thus, rather than forcing long and standardized videos, operators should allow users to create their own content environments. Small clips, also called ‘content snacks, or ‘mobisodes’ on the go, could be compelling; they represent an entirely new value proposition, one that differentiates mobile from traditional TV. We cannot expect that the content industry will create exclusive ‘made-4-mobile’ content formats in the short term. The trend rather goes towards fine-tuning existing programmes based on the requirements of mobile TV and towards complementing traditional content with only-on-mobile formats. We have to realize that mobile TV is not in a position to generate hype or new TV brands. Classical TV will remain the leading media with its own brands and series. Mobile TV will function as a supplement, providing an attractive add-on to enhance the image and content range of established TV brands, while strengthening their customer loyalty. Thus, it is of crucial importance for mobile operators to enter partnerships with established broadcasters to develop viable business models that create value-added mobile TV services. For instance, we are collaborating with the main Austrian TV broadcasters ORF and ATV in this regard. Monetising mobile TV services represents a further challenge. Many surveys and case studies show that consumers’ willingness to pay for mobile TV is limited. A fixed monthly fee is considered the best, most acceptable, pricing model complemented by pay-per-view. However, the willingness to pay tends to be less than €10 per month – regardless of the content portfolio. Moreover, Austria, with no long-term, established pay-TV tradition, makes the whole business model even more challenging. As for advertising, there are no known concrete solutions yet for mobile TV. The question of whether sponsored content will be accepted by mobile TV viewers is still open. A further question is whether content production will continue to be expensive in future, or will self-generated content become viable enough to take the lead instead? Still unclear is also which roles the different parties involved in the mobile TV value chain will play in the long run, i.e. content producers (such as Fox or Disney) versus TV broadcasters, mobile broadcast service providers versus mobile network operators. Still, it is undeniable that mobile operators will play a crucial role since they operate the transmission network, they provide the handsets, are capable of billing the customer and, finally, are in charge of the customer base. The extent to which mobile operators will be able to reap the benefits of mobile TV will depend on the customer response. It will depend upon the success of personalisation and interactivity, on customer reaction to viewing TV on a mobile handset, as well as on factors such as display size and resolution, transmission quality, user-relevant range of content and price structure. We will only know in the long run whether mobile network providers will be able to keep up with the traditional content and broadcasting industry and turn into media distributors, or if they will simply become access providers who offer up-and-down linking services complemented with interactivity features. Currently all market players are on the same boat, confronted with the same hurdles and facing the same challenges. Therefore, it is of vital importance to jump on the mobile TV bandwagon as early as possible in order to be able to experiment and gather expertise with regard to all the technical and business-model related issues that have not yet been solved. These obstacles comprise, for instance, the penetration of UMTS or DVB-H capable handsets, which is still very low, and investments in network infrastructure, which needs to be expanded. Moreover, the challenge in the short term will be to raise customer awareness and, more specifically, to draw the attention of early adopters who act as trend-setters and opinion leaders. In this context operators should take into due account potential threats coming from substitute mobile video technologies such as Sony PSP or video over Apple iPods. iPods have, for instance, a larger screen size than mobile handsets and offer a dynamic sound experience. Sling boxes can upload any kind of content from a TV set, a cable or satellite set-top box, from DVD players and PVRs, personal video recorders, and retransmit a video stream via a broadband Internet connection to wherever the user happens to be. Besides, the global mobile TV market is extremely fragmented as different countries adopt different standards. As with mobile phones, the possibility of defining a single world standard looks quite remote at present. Mobile operators are therefore forced to take a market-by-market approach and are evaluating and testing several broadcasting solutions. These include DVB-H, Digital Video Broadcasting- Handheld, mainly deployed in Europe, T-DMB, Digital Multimedia Broadcasting, a technology in use in South Korea, DAB-IP, Digital Audio Broadcasting, which transmits radio and TV signals over the Internet, MediaFLO, a proprietary solution by Qualcomm in the USA, as well as MBMS, Multimedia Broadcast Multicast Service, an evolution of 3G. At present the challenge for operators is to determine which broadcasting option offers the best customer experience and is financially viable, as well as to decide whether to build their own networks or share a network with other mobile operators and/or broadcasters. However, regardless of which broadcasting option is selected, it is imperative to continue to invest in 3G. 3G technologies – such as EDGE, UMTS and ultimately HSDPA – provide a unique selling proposition and enable operators to offer additional services that differentiate them from service providers who simply resell broadcasting services. The end-user does not care about the technology behind the service. The most important issues to the user are the quality of the streaming, the timing of switching or changing from channel to channel and the quality of sound. It is clear that mobile TV will not replace traditional TV – it represents an add-on. Mobile TV will not take the world by storm as it is still in its infancy. It will take some time for consumers to get used to these new services. However, I’m convinced that mobile TV does offer growth potential. According to estimates by Informa Telecoms & Media, mobile TV will generate 210 million subscribers worldwide by 2011. So, if operators are able to solve the technical challenges and encourage users to adopt it, mobile TV could become an attractive business proposition.