Mobile TV has been around since the ’70s, but is still searching for that elusive business model, writes John Strand
A lot is said and written about mobile TV, what it really is and how it will develop. However, I will never forget my first mobile TV, which I received from my father after he returned from a business trip to Japan in the ’70s. Yes, it was a real mobile TV solution from Sanyo. The TV set was roughly the size of two novels put on top of each other, and it had a black and white screen the size of a box of matches. The fact that the solution did not contain a mobile phone is no secret. It was a pure TV solution, based on the terrestrial TV signal, which all Danish homes used to receive TV at that time.
I will not forget my experiences from that age either, the way my friends at school looked at the TV when I brought it in. One thing was to see the picture come alive on the screen; another was to follow the programme. Here the screen size, combined with the fact that it was a black and solution, meant that it was not the most optimal TV. However, it was mobile and it had sound.
Since the ’70s a lot has changed, and I have seen a lot of solutions based on streaming via GSM/GPRS, CDMA, WCDMA, DMB-T, DMB-S and DVB-H. During one of my visits to Korea I had a meeting with a number of players in the value chain that exists around mobile TV. We spoke a lot about business models, and how to get a business case out of a mobile TV solution. In much the same way as the people working with DVB-H in Europe, the people working with DMB in Korea had to admit that it is hard to prove a business case, looking at the cost to terminals, tailored content, marketing and day-to-day operations! Actually the business case and revenue sharing models have not changed since the ’70s. However, in the same period the competition on the media market has escalated and the number of players in the TV market has exploded, which basically means more players are fighting for the people’s attention, time and money.
My experiences in Korea with DMB did not answer many of my questions. Actually the experiences raised more questions than they gave answers. Again and again I ended up sitting with the question on how a mobile business case can be justified. We have asked the question to Nokia many times, and even with an intense dialogue with Nokia, it has not succeeded convincing us that there is a healthy business case in mobile TV. The arguments I hear around mobile TV, remind me of the same arguments which were used to Hype 3G from a number of infrastructure providers. Back in 2000 they claimed that mobile customers ARPU because of 3G would grow to the double by 2006! Fact is that the ARPU development in the same period has been flat, and the promised growth has vanished.
In the summer of 2007, precisely on May 29, I received a Nokia N77 with DVB-H from TDC, and hence access to the six most important TV channels in Denmark. I decided to forget about business models, and spend and consume the product without looking at the business models behind. Mobile TV would be the only for TV in my life for a period of 14 days. A Nokia N77 would be the way I consumed TV on in this period, and I would watch all types of programmes and evaluate both the positive and negative sides of a mobile TV solution.
The N77 is a good phone; do doubt about that, a phone that has what most people need. It’s a high-end product with a lot of functions and a reasonable battery life. Using the mobile TV is easy, fast and simple, and the power consumption is astonishing good (low). To sum it up, mobile-TV via DVB-H on a N77 is a solution that functions technologically well considered it is a product in the beginning of its product lifetime.
It’s no news that skilful engineers can make good products. However, something entirely different is the thing the engineers can not change, the fact that the screen has the size it has, and that content shown on this screen is designed for bigger screens. Through our work for some of the worlds largest and most interesting media companies, we have learned quite a bit about content, why there is difference on content, and why on how to adapt content from one media channel to another.
You do not need to be journalist or work in the media world to know that content is different in relation to the channel it is consumed, being newspapers, magazines, radio, TV or on the Internet. Content for mobile-TV needs to be developed for the media channel it is consumed in. This does not mean broadcasting normal TV programs to a mobile phone, and believe that the content will work as well as on an normal 32 inch screen.
During the two weeks I used mobile TV, I watched programmes all hours of the day. I used it at home in the living room, the bedroom, in the kitchen. I used the solution travelling, in bus, car, taxi, in train and walking on the street. I watched all types of programmes, news, sports, documentary, music, movies, cartoons etc. Basically I used mobile TV any conceivable way imagined, and consumed all the programme types known from normal TV.
The conclusion after two weeks intense use can be split into three parts.
The technological, which programmes work on mobile TV and how mobile TV is consumed.
Technological DVB-H works, the picture and sound quality is in top, and the battery usage is impressive on a N77. Here the engineers did a really good job.
Regarding programming, one thing stands out, mobile TV is not mobile TV, but radio with pictures. Programmes that demand much visual attention such as sports and movies, do not work on such a small screen. It’s like watching porn through a keyhole. Not a venture that you will ensure for a long time. However, programmes such as news and music do work. The combination of sound and the possibility to follow the programme via pictures makes mobile TV look like a high-end radio product.
The main conclusion must be the fact that mobile TV via DVB-H is flow television, and not an on-demand solution. With this in mind, I think we have a good description of what mobile TV will develop into in the future. The advantage with radio as a media, is that we can jump in and out of the media, and the fact that we accept that we did not hear the programme from start, which is in stark contrast with ordinary flow TV, where the viewers are used to watching a programme from the start to the end, if we find the programme interesting.
So where is the best place to use mobile TV? Actually anywhere but in the sofa! Mobile TV can be consumed everywhere, especially places where your are relaxing and have 10-30 minutes time. As mobile TV is not TV but radio with pictures, you can consume it in the bed, in the kitchen on the run or anywhere you have some time to kill.
Mobile TV is a fantastic way to limit you phone-usage.
The question that we hear often is if we believe in mobile TV? The answer is yes! However, we have a lot of reservations that needs focus, when evaluating the product.
The first reservation is around the business case! It is hard to find. Especially looking at all the costs, and looking at a SAC against the price customers will expect to pay. The second reservation is the cost of producing content to this specific media channel. We believe that the costs per active customer will be high, if not really high. The delivery form, it is not flow TV customers want in the future. Ask any director in the TV world, and they will say that flow TV is dead, and the future is TV on demand. Why are technology providers betting on flow-TV when it is a dying technology?
Mobile TV has a future, but the customers can not see any different on mobile TV delivered via a DVB-H network or a streaming solution, so we believe that the providers of ground based digital TV for the mobile will face problems in a world where 3G operators offer different streaming solutions, which is both flow TV and on-demand. We believe that the technology has a lot of possibilities, but it will take time and cost a lot of money to develop the mobile media. Looking at how mobile TV have developed since the ’70s when I got my first mobile TV I am not impressed.
Mobile TV is and will be next generation radio…
John Strand is a director of Strand Consulting, Copenhagen