Mobile TV revenues are on the move

By 2010, global annual revenues from Mobile TV and Mobile Video on Demand (VoD) will have increased to almost 800% of the 2006 total, according to a newly released report from Understanding & Solutions.

(Source: Understanding & Solutions - Copyright 2006)

The future of Mobile TV is certainly looking bright, with recent industry activities and consumer take-up laying the foundations for significant future growth. “By 2010, we predict Mobile TV and Mobile VoD will achieve combined revenues of around $18bn worldwide,” says Alison Casey, Business Director: Content & Services, Understanding & Solutions “and that’s excluding revenues from advertising, sponsorship and added interactive services.”

Last year, considerable interest surrounded Mobile TV, particularly around the FIFA World Cup in July. However, there was only one major Mobile TV launch using broadcast technology: 3 Italia’s WalkTV; although a number of smaller scale services launched, in particular Debitel (Germany) and Virgin Mobile (UK). During 2007, many more services are scheduled for rollout in a variety of standards, but with DVB-H likely to dominate in Europe, with its robust error correction, power efficiencies and high scalability – and the potential for up to 80 channels. In the USA, Verizon will launch V Cast Mobile TV in the next few weeks, using Qualcomm's MediaFlo technology.

In addition, the availability of Mobile TV and Mobile VoD over cellular networks, particularly 3G, continues to increase, with accelerated popularity of these services in the USA, UK and France.

Based on subscribers, the world’s most successful Mobile TV service using dedicated mobile technology is TU Media/SK Telekom in South Korea, with an estimated base exceeding 3 million at the end of 2006. Next up is 3 Italia, which estimates a base of half a million subscribers at the end of 2006.

“Whether we’re talking dedicated mobile TV services such as 3 Italia, cellular-based Mobile TV services like Vodafone and Sky, Mobile VoD such as Fox ‘Mobisodes’, or even made-for-mobile content like ‘Love Love Ting’ on Korean T-DMB, the amount of TV content accessible on your mobile phone is skyrocketing,” says David Sidebottom, consultant with Understanding & Solutions. “With all this activity, we already have clear indications of the content winners and content losers.”

“Whereas digital TV is all about choice,” says Sidebottom, “Mobile TV is about favourites, and performs well when it’s addressing local and national tastes. ‘Dip In, Dip Out’ and short form are important mobile content attributes, and much mobile TV usage will be competing with mobile games, web content and podcasting.”

Reality TV shows such as Big Brother are a perfect example of ‘Dip in, Dip Out’, with live webcam streams and updates available on mobile. In addition, highlights and audience interaction through voting provides further revenue streams; similar mobile content initiatives are now common for talent contests such as the X-Factor. Indeed, consumers may sign up to a mobile TV service simply because their favourite soap is available or it has the top football rights.

However, there are lessons to be learned from made-for-mobile episodes. Production costs are generally high, therefore a wide distribution platform is crucial in order to receive a return on investment. There is also evidence that consumers are still not used to using their handsets in this way. The BBC launched 13 separate one minute long Doctor Who ‘Tardisodes’ running alongside the TV series. Despite advertising at the end of each TV episode and the content being free, only 40,000 ‘Tardisodes’ were downloaded, compared to 2.7m online PC views.

“Moving forward, interactivity and community will be key factors in mobile TV uptake,” says Alison Casey. “Talent contests, quizzes, music television, events and other genres will become increasingly popular – and these formats are already appearing on Korean Mobile TV services.”

“The market activity to date,” continues Casey, “reaffirms Understanding & Solutions’ view that mobile TV will be a significant business in coming years - customer take-up in the major launch markets of South Korea and Italy have been remarkable, with consumers also showing willingness to pay incrementally for quality TV on mobile services. Globally, we predict Mobile TV revenues to exceed Mobile VoD by a ratio of almost four to one by 2010, pulling in around $14.3bn and $3.7bn respectively.”