PCCW is banking on its world-famous NOW TV brand to bring TV (and music) to the phone. Janice Lee, VP of marketing and content development for NOW TV at PCCW, tells editor John C Tanner how it's done
Charged: PCCW's NOW Broadband TV has turned a lot of heads - how has it weathered the transition to mobile‾
Janice Lee: We don't offer all 130 channels, of course - just around 12 to 15 channels. That will grow, but we didn't want to inundate our customers right off. And with the small screen size and being outside the home environment, we felt we need to be more selective. The first phase of NOW on mobile was sports and news, things people would want on the go. The second phase includes children's channels such as Cartoon Network, and Fashion TV and Discovery Channel, which are mainly about killing time. The Cartoon Network is quite popular in that regard because for parents, it's something of a pacifier! [laughs]
Charged: You run a mix of linear rebroadcast and specially formatted programs for mobile - how do you decide which channels can run live and which ones need reformatting‾
Janice Lee: For news and sports, people want that information live. There's not much point in doing a loop because you want up-to-the-minute information, or in the case of sports, people want to see the live game because they're not home. For the formatted content, we work with the content providers on that. For example, the Cartoon Network content is customized for mobile - it's a four hour loop they've done for us. One reason for that is the amount of time people spend on mobile watching content isn't going to be the same amount of time they'd spend at home, so it's better to do shorter snippets.
Charged: NOW TV is constantly looking to add new innovations like more interactive programming, on-demand video - how much of that is making its way to mobile‾
Janice Lee: I should step back a bit and explain how we see mobile fitting overall into NOW TV. Putting TV on mobile serves two purposes: one, it enhances and differentiates our 3G service. In Hong Kong a lot of the other 3G players are competing on price and they see content as a promotional tool, but for us content is our core business, so we're very serious about it. And that's reflected in the way we price our 3G offering.
Second, it allows us to get NOW TV on more screens. On fixed-line, we have about 800,000 households subscribing now, but we're always looking to expand, and what better way than to extend our brand to everyone's small screen. I don't know how much of it you'll actually watch, but you'll see the logo every day, maybe start watching some of it and hopefully it'll build up with you.
Coming back to interactivity, what we've done is put the EPG [electronic programming guide] on the phone, so it's about cross-promoting our home offering. If you're out and you want to know what's on AXN tonight, you can check the EPG on the handset. In the future, when we launch PVR functions, you'll be able to find that program and pre-select the time or book a program via the handset. Putting the EPG on the phone is the first step to enabling that interactive function on mobile.
Charged: Talking of 3G differentiation, NOW has landed quite a few exclusive content deals like ESPN and English Premier League. Do those exclusive rights apply to mobile too‾
Janice Lee: In the case of EPL it does, because we acquired all live rights, so that's for TV, mobile, PC and our fixed line network, where we'll have a fixed-line phone with a screen on it. And of course it's not that we expect people to watch the whole game on mobile, but when you're rushing home on Saturday night and you can't make it in time for the game, if we can provide that gap that you're missing and then you can watch the rest of the game at home, that's the convenience we offer to them.
Charged: One of the benefits of IPTV is you can track viewership patterns more accurately than cable TV can. Is that true for mobile TV too‾
Janice Lee: Yes. We can report that back to the content providers, and it also helps us to fine-tune our offering. As I said, this is a new field, and we've got to learn from current usage behavior and build content that's more suited to the customers. For example, we're learning how much time people spend using our Moov [music] service, and can tailor how often we refresh the songs based on how long they use it.
Charged: Since you mentioned it, let's talk about Moov - why go streaming when everyone else is talking downloads‾
Janice Lee: The consumer proposition of downloads is that you charge HK$12 ($1.53) or HK$15 a song, and in Hong Kong the volume of that business hasn't been huge.
Hong Kong music consumers are very value-driven - they want three-CD compilations for the price of a single CD. So when you charge HK$15 per song, you're not going to get a lot of usage. What we developed was unlimited streaming for a monthly subscription. It's a different usage behavior. On the PC side where we started, people use computers for several hours a day, at home or in the office, so offering a streaming music service complements that multi-tasking mentality. When we decided to offer it on mobile, we knew these were loyal users who also wanted it on the go, but the behavior is different. On the PC, it's about exploring - you can explore different categories, build your own playlist. You can do that on mobile too, but a lot of them may be casual listeners, so in addition to building your own playlist, we have pre-set channels that you can listen to based on different categories. We also put together some of our own lifestyle playlists for specialized categories like, "Songs to listen to while you're getting ready for work".
Charged: Are you looking to add tagging capabilities to that where, say, users put their own tags on songs that help other users search for music, like Pandora‾
Janice Lee: We're working on a project where users can tag DNAs onto the songs - so it's like the Pandora concept. You define what you think the song is - like this is the ultimate break-up song or something. So when you search, you're not just searching what we define for users, but what collectively the community has defined as well.
Charged: Based on your experience with Moov, how many rabid music fans are there as opposed to casual listeners who don't give a toss about tags‾
Janice Lee: Well, that's why we have the preset channels, because we recognize there's a large number of casual listeners out there. With personalization features, over half our users on the PC side already have their own playlists, so they are exploring, and we're seeing more of that. When they're in a hurry they'll just access the playlists or the presets, when they have more time, they'll explore. It depends on the age group as well. The executives are lazier [laughs], they tend to be casual listeners, but for the younger set it's very personal music choices - in fact, they only want to listen to what they define.
Charged: Streaming gets around so many headaches of music downloads - DRM, phone storage capacity, bandwidth. Can you make a case for mobile music downloads‾
Janice Lee: Download has its own market segment, so it's important, and we'll be looking at solutions in offering that.
But the key point is offering a compelling consumer proposition - not just pricing but the packaging of what you offer. If and when we offer a download service we'd want it to be different from the current model because it's not driving sufficient volumes. Streaming is a gap in the market that had not been filled, and we were able to fill that. Going forward, in evaluating whether we do a download service, we want to work with the record companies to come up with something more innovative in terms of packaging and pricing, then we'd come out with it. We'd want to do it as a real business, not just as an advertising differentiator for our 3G service. Download does have its merits - you can take it with you overseas, whereas with Moov technically we need to geo-block its availability for you to access it overseas.
Charged: Because of licensing restrictions‾
Janice Lee: Right. So there are compelling reasons to do a download service in the future.