|Issue:||North America 2007|
|Topic:||TV here, there, everywhere, from anywhere|
|Author:||Robert J. Laikin|
|Title:||Chairman of the Board and CEO|
Robert J. Laikin is the Chairman of the Board, Chief Executive Officer and a Co-founder of Brightpoint, Inc, a global leader in wireless device distribution and customized logistics services. Mr Laikinís is also a Member of United Way Central Board of Directors; Member of Indiana University Kelley School of Business Deanís Advisory Council; and a member of the Helene G. Simon Hillel Center Indiana University Capital Campaign Steering Committee. Mr Laikin has received a number of awards, including the 1999 Distinguished Entrepreneur Award from the Kelley School of Business Alumni Association, the 1995 Indiana Entrepreneur of the Year Award, and honourable mention in 1995 Inc. Magazine National Entrepreneur of the Year Award. Mr Laikin has a Bachelor of Science in Business from Indiana University.
The mobile phone is the fourth screen, after the cinema, TV and computer. As the frequencies currently allocated are freed by the elimination of analogue TV broadcasting, and handsets incorporating better screens and broadcast TV receivers reach the market, mobile TV usage should grow. Mobile operators currently have the strongest relationship with the end-user and are ideally positioned to build effective customer profiles. So, too, are Internet brands such as Yahoo, Google and MSN – each with truly significant numbers of users.
Who would have thought, a few years ago, that there would be a fourth screen, on which you would be able to watch video, TV and even movies Cinema screen, TV screen, computer screen and now a mobile wireless screen on which content from a variety of sources is accessible in the palm of your hand. Innovation, creativity and technological advancements in wireless have been at the forefront this past decade and we have seen nothing yet. In recent years, the wireless industry has seen explosive growth in device capability, especially in relation to mobile cellular phones. High-speed wireless data networks, ever-increasing computing power, memory and high-end graphic functionalities have accelerated the development of new and exciting wireless services. Media FLO, Forward Link Only, and DVB-H, Digital Video Broadcasting – Handheld, are two such prominent technologies and standards bringing broadcast services to handheld wireless devices (with receivers). Most of the US operators are working with Media FLO while the majority of European operators are going to adopt DVB-H and similar standards. The potential customers are not only cellular operators but also include cable and satellite operators. Companies looking for triple- and quad- play strategies will have to come up with their own mobile broadcast strategy in the next couple of years. While mobile TV has been in the news for some time, consumer usage in the US and Europe remains quite low but can be expected to increase dramatically in the next two to three years. Mobile television is still in its infancy but gaining traction with early adopters. To stimulate growth, pricing and business models will need to be adjusted to market realities. Mobile TV has been around in Japan and Korea for a longer period and has reached critical mass penetration. In the nearterm, wireless users may not like to pay US$6-$9 per month for a mobile TV service. Instead, users will look for per-view or per-minute pricing to watch key minutes of a sports event or drama while engaged in another activity. This sporadic viewing pattern will lead to more regular viewing and, over the coming years, mobile TV could become an indispensable service. I think mobile TV services will become an important driver of revenue growth and consumer adoption in the next few years. Future plans from service providers will include data casting weather and traffic information, broadcasting to storage on the phone for later access. The ability to pause the TV programme to take a call and location-based addressable advertising using the GPS feature will be built into the phone. With the introduction of ëclipcastingí that enables some personalized content filtering on the device (i.e., only user-specific information is displayed), broadcasters can extract more value from the spectrum. The advent of mobile TV will lead to production of new mobile devices for consumers who want access to TV content, which in turn will further drive the replacement cycle. The growing desire to view content anytime, anyplace will expedite the penetration of mobile TV services on a global basis. The use of the mobile device as a replacement for your wallet – the use of eMoney – will grow explosively within the next ten years. Whether you are paying for a meal at a restaurant, tickets to a show, or ëfeedingí a parking meter, your mobile device will facilitate the transaction. I expect to see many advances in the next few years that will move us toward a vision of wireless devices that are not just for voice and data services, but are true command-and-control devices for our lives, whether one is out and about, in a car, in the office or at home. According to In-Stat, a high-tech market research firm, the mobile TV broadcast market is expanding due to the launch of commercial TV services in a good number of countries during 2006. The launches will continue in 2007, but the lack of available spectrum will continue to hinder the rapid growth of mobile TV services, particularly in Europe. Over the next few years, the situation will change. By 2011, In-Stat expects mobile TV broadcast services will be launched in many European countries, as spectrum will be freed by the mandated elimination of analogue broadcasting occurring around that time. The most recently launched mobile TV broadcast service is Media FLO USA, which began offering mobile TV in 19 US markets through Verizon Wireless. In-Stat estimates those 19 markets contain close to 13 per cent of the population in the USA. Another hot theme related to the growth of mobile TV broadcasting is mobile advertising. I see mobile ad campaigns as another source of significant revenue for operators in the near future. Mobile advertising will need to fit seamlessly into the advertiserís overall digital branding strategy. As more and more carriers get into the game, mobile advertising will reach an increasingly massive audience. The larger the audience, the more successful mobile advertising will be, especially since mobile operators are ideally positioned to gather and analyse data about the userís interests and target appropriate content and advertising accordingly. Clearly, carriers/operators that currently control millions of billing relationships have the strongest relationship with the end-user in this ecosystem and are ideally positioned to gather the information needed to build effective customer profiles. At the other end of the customer relationship spectrum are the Internet brands such as Yahoo, Google and MSN – each with a truly significant number of unique visitors. Other important players include Amazon, eBay, MySpace, YouTube, Skype and AOL. For the operator, mobile TV is an excellent way to build loyalty. Mobile TV is also a way to move heavy data users to another level, using advertising to subsidize premium content and even transport costs and, as a consequence, lowering the barrier to usage. For the end-user, relevant and targeted advertising and promotions deliver value. In some recent surveys, the number of users willing to pay for the Mobile TV service is a small fraction of the number of users who want to use the service. With advertising to subsidise the costs, they can afford to use mobile TV and start enjoying the full capabilities of their handsets. Although advertising has significant potential, it also poses significant risks and a number of potential challenges need tackling before mobile TV evolves into an important, vibrant, advertising medium. Privacy and data security are amongst the critical challenges. Developing systems that effectively protect digital rights and distribute the revenues from mobile advertising to everyone in the value chain – from advertisers to enablers to carriers to end users – based on their contributions, is another important challenge to be met. I am optimistic about the impact of mobile TV as it relates to the global wireless handset industry. In 2007, I estimate 1.1 billion to 1.2 billion wireless devices will be sold around the world driven, primarily, by the replacement cycle and by new subscriber additions in countries such as India, China and many Eastern European and Latin American countries. Mobile TV will contribute only modestly to these sales, for now, but this is the start of what will soon become a major force in the market.