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Mobile TV revenues to increase dramatically

25 January 2007

According to a newly released report from information and consultancy company Understanding & Solutions, by 2010 global annual revenues from Mobile TV and Mobile VoD will have increased to almost 800% of the 2006 total.

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,” said Alison Casey, business director: content & services. “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 the report suggests that DVB-H is likely to dominate in Europe, due to robust error correction, power efficiencies, 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,” 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,” he continued, “Mobile TV is about favourites, and performs well when it’s addressing local and national tastes. ‘Dip In, Dip Out’ and shortform are important mobile content attributes, and much mobile TV usage will be competing with mobile games, web content and podcasting.”

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 minute-long Doctor Who ‘Tardisodes’ running alongside the second series of the TV series. Despite advertising at the end of each TV episode and the content being free, only 40,000 ‘Tardisodes’ were downloaded to mobile, compared to 2.7m online 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,” she continued, “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 has 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.”

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