Making the mobile TV numbers add up

17 Mar 2006

One and one isn't always two when it comes to creating consumer product hits.

Every home uses the Internet, and every home has a fridge, right‾ But the Internet fridge market is as cool as an unthawed TV dinner. The same applies to countless retail concepts that bombed on the Web. anyone‾

But mobile TV - the combination of the world's most popular entertainment product and the ubiquitous communications device - is in danger of melting the hype-o-meter.

Whereas the online fridge involves consumers using the product in an unfamiliar way - i.e. as an always-on pantry management terminal, rather than a place to chill food - users will approach mobile TV in pretty much the same way that they deal with the standalone devices; they will watch TV when they feel like being entertained and they will use the mobile handset to kill downtime.

It's the concept that is unfamiliar. A survey by RBC Capital markets in the US found that 75% had no interest in watching TV on their mobile phones. Actually, I would have thought that 25% of the 200-odd million American cellphone customer base watching mobile TV is a good start.

But it's clearly an impossible question for most people today; akin to asking a 19th century coachman his thoughts on the horseless carriage (or a 1996 mobile phone user the idea of using the handset keys to tap out short messages). If the question were 'would you use your cellphone to amuse yourself while commuting‾', 90% would surely say 'yes'.

Sure enough, the response from participants in European trials, who actually watched mobile TV, was positive. Britons averaged 20-40 minutes a day, Spaniards 16 minutes and French 20 minutes. Finns watched local programs, French people liked news, music and entertainment. Between them they were willing to pay between 5 and 10 euros for the service.

Standards, spectrum, DRM

So there's definitely a business in there, but mobile TV has to get over a lot of challenges.

Standards aren't settled yet and spectrum has not been allocated. Operators have to find funds to invest in the networks, and they have to find business models to support those investments. Handsets will be needed with long-life batteries. DRM will add to the complexity.

The other missing element obviously is the content; movie, TV and games makers will need to figure out what is handset-friendly programming. Tony Seeto, head of new business development for local operator CSL, told the Mobile Monday event in Hong Kong last week that this meant less action and maybe a simpler storyline, boiled down to a minute or so.

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