Only 8pc will pay for mobile TV — iReach

12 Jun 2006

A mere 8pc of total mobile users would be willing to pay for mobile TV services, a survey by iReach reveals. It says content will be the key issue for service providers and establishing partnerships with media organisations will prove vital.

Last week Vodafone Ireland announced a deal with Sky to provide mobile TV to consumers in the first such commercial service in the country. The service will be available from this week and will be free until September.

Industry consolidation in the mobile sector, combined with the falling value of the mobile voice sector, combined with pressures on average revenue per user (ARPU) rates, has led to mobile providers seeking to broaden their revenue streams by growing their premium content services to offset and ultimately grow their overall ARPU.

Organisations from a variety of backgrounds have in recent years been looking to exploit new media channels to grow the revenue streams. Firms such as media owners, retailers and sports clubs are increasingly looking to leverage the power of the mobile medium, and particularly mobile TV, to help them to create brand value.

IReach’s survey of 2,000 mobile users found that 8pc of the total mobile user population would be willing to pay for mobile TV. This figure more than doubles to 17pc when existing 3G users were asked on their willingness to pay for mobile TV services. Interestingly, this ranks higher than the figure willing to pay for mobile email, which stands at approx at 12pc.

“We believe that this is due to users who are used to getting free email services but who are also conditioned to paying for more media -rich services such as mobile TV,” iReach said.

“Consequently, iReach believes that it will be easier to sell mobile TV than some other mobile data services which are viewed as commodity services. However, content will be the key issue for service providers and establishing partnerships with media organisations.”

According to iReach, the provision of more compelling content on the mobile channel will help to drive mobile handset refreshes. However, there is a distinct relationship between content and handsets, with approximately 24pc of Irish users planning to upgrade their handset following the rollout of mobile TV data services over the next 12-24 months.

IReach suggests that mobile operators need to continue and to improve their support of the rollout of more sophisticated handsets or they risk slowing down the takeoff of data-rich mobile services such as mobile TV.

According to iReach, the main inhibitors to adoption of most multimedia services are lack of interest and perceptions of high prices. “Mobile TV is no different. Mobile operators will face challenges such as educating consumers about Mobile TV, convincing users of basic mobile services of a phone’s utility beyond voice and SMS.

“Moreover, compelling services, relevant content and affordable services should top the agenda for mobile service providers if they are to achieve mobile TV mass.”

Issues further down the road will also include digital rights management (DRM) and broadcasting spectrum issues, along with issues such as growing portfolios for content partnerships and more complex revenue management amongst a growing web of partner organisations, iReach claimed.

By John Kennedy