Mobile TV revenues on the rise

18 Jan 2007

Annual revenues from mobile TV and mobile video on demand (VoD) are set to increase 800pc between 2006 and 2010, new research has claimed.

The research by Understanding & Solutions reckons on a bright future for mobile TV. “By 2010 we predict mobile TV and mobile VoD will achieve combined revenues of around US$18bn worldwide,” said Alison Casey, business director of content and services at Understanding & Solutions, “and that’s excluding revenues from advertising, sponsorship and added interactive services.”

Despite the considerable interest in mobile TV last year around the World Cup, there was only one major mobile TV launch using broadcast technology, that of 3 Italia’s WalkTV, followed by smaller-scale actions.

However, in 2007 there are more mobile TV services scheduled to launch across a variety of standards.

DVB-H (digital video broadcasting over handheld) is expected to be the dominant platform in Europe due to its robust error correction, power efficiencies and ability to hold up to 80 channels.

Based on subscribers, the world’s most successful mobile TV implementation to date is TU Media/SK Telekom in South Korea, which has an estimated base exceeding three million at the end of 2006. This is followed by 3 Italia, which had half a million subscribers at the end of last year.

“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,” said 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,” continued 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 good example of ‘dip in, dip out’ viewing, 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. Consumers may sign up to a mobile TV service simply because their favourite soap is available or it has the top football rights.

However, according to Understanding & Solutions, 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 2.7 million online PC views.

“Moving forward, interactivity and community will be key factors in mobile TV uptake,” said 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 reaffirms our 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, Understanding & Solutions predicts mobile TV revenues to exceed mobile VoD by a ratio of almost four to one by 2010, pulling in around US$14.3bn and US$3.7bn respectively.

By John Kennedy