Mobile Television: The Emergence of a Personal-Mass Media Platform  Sylvia Chan-Olmsted Professor and Associate Dean for R...
An Emerging Main Stream Medium – everyone has it! HK: 130% Cable TV: 70% Broadband Internet: 53%
An Emerging Main Stream Medium –  not just a telephone! Communication + Interacting with the phone
Some U.S. Mobile Consumption Facts <ul><li>Browsing news/information on mobile Internet is also a popular mobile activity....
I want my mobile phone… SMS MMS IM Broadband Internet Email Television High quality audio Banking Bill payment Shopping Ga...
Presentation Outline <ul><li>Background Information </li></ul><ul><ul><li>Continuous demand for TV consumption </li></ul><...
Television vs. Mobile Television – Traditional TV Overview <ul><li>TV continues to be an important medium for the American...
The Worldwide Growth of a New Content Delivery Platform <ul><li>Americans began to receive broadcast TV on mobile phones i...
Mobile TV Viewers Worldwide VAS Research Series 2007
Television vs. Mobile Television – The Nature of Mobile TV <ul><li>Conceptual Mobile TV = Mobile phone + TV + Internet </l...
The Characteristics of Mobile TV Fixed-line Television Broadband Internet Fixed-line Telephone Mobile Telephone Mobile Tel...
Mobile TV Development Issue I: Technology <ul><li>Choice of Mobile TV platform is influenced by cost, regulation, and appl...
Mobile TV Development Issue II: Consumer <ul><li>Who are the mobile TV users? </li></ul><ul><li>Early adopter profile </li...
U.S. Mobile TV Consumers Telephia Mobile Video Diary Report 2006 Mobile TV users  are ethnically  diverse Not just for the...
Mobile TV Development Issue II: Consumption Patterns <ul><li>Mobile TV was most used during commutes, waiting situations, ...
U.S. Mobile TV Usage by Daypart  Telephia Mobile Video Diary Report 2006 3% 2 am – 6 am 11% 11 pm – 2 am 9% 8 pm – 11 pm 3...
U.S. Mobile Video Usage Small  portion  of mobile  Users; Infrequent usage
Mobile TV Development Issue II: Consumption Patterns/Motivations <ul><li>Motivations </li></ul><ul><li>Flexibility, indepe...
Mobile TV Development Issue II: Consumption Patterns/Motivations <ul><li>Conditions for mobile television adoption </li></...
U.S. Mobile Subscribers’ Key Motivators in Subscribing to Mobile TV Service <ul><li>Cost of service (64%) </li></ul><ul><l...
Mobile TV Development Issue III: Content <ul><li>Technology = enabler </li></ul><ul><li>Content = driver </li></ul><ul><li...
Mobile TV Development Issue III: Content <ul><li>Sample services: </li></ul><ul><li>US Verizon offers 8 channels (CBS, Com...
Mobile TV Development Issue III: Content <ul><li>Typical content genres are drama, soaps, news, sports, and reality progra...
U.S. On-Demand Mobile TV Usage Short clips - Music, news, Sports, Weather, Comedy, Animations, Highlights
Mobile TV Channels Ranked by Share of Total Audience Telephia Mobile TV Diary Report 2006 12% 11. E! 12% 11. CNN 13% 10. D...
U.S. Mobile TV Content Preferences  <ul><li>Consumers prefer to watch traditional-style mobile TV rather than modified or ...
Mobile TV Development Issue III: Content <ul><li>Two mobile TV views: mobisodes (“24” and “Lost”) vs. mobile traditional T...
Mobile TV Development Issues IV - Regulation <ul><li>How to regulate converging telephone/television industries? </li></ul...
Mobile TV Development Issues V – Alliances and Marketing <ul><li>Alliances are essential for emerging markets – especially...
Mobile TV Development Issues V – Business Models <ul><li>Mobile has been more successful in establishing the receptivity t...
Mobile TV Development Issues V –Business Models <ul><li>Content providers need incentives (revenue-sharing) to develop/ass...
Mobile TV Development Issues V –Business Models <ul><li>Mobile Advertising – targeted medium platform with mobility, perso...
Ad Budget Shares of Emerging Media AAF Nov. 2006 3.6 Video game 5.2 Mobile 5.5 RSS 7.7 Social networking 8.0 Podcasts 8.4 ...
Mobile TV Development Issues V –Business Models <ul><li>Mobile Advertising Scenario: </li></ul><ul><ul><li>SMS/MMS type ad...
Mobile Advertising Spending E.g., SMS E.g., placement ads 93.64% 100% 111.54% 136.36% -- Growth Percentage (%) 213 110 55 ...
Overall Mobile Business Considerations <ul><li>State of the Business </li></ul><ul><li>Messaging (text, multimedia and ins...
U.S. Mobile Phone Application Revenues
Mobile TV Development Issues V –Business Considerations <ul><li>Mobile TV is a long-term strategy. </li></ul><ul><li>It pr...
Mobile TV Development Issues V – Quadruple-Play Business Strategy Fixed-Line Telephone Mobile Telephone Broadband Internet...
Conclusions <ul><li>U.S. Mobile TV is in its infancy, worldwide mobile development may serve as a reference point. </li></...
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Mobile Television: Its Development and Strategy

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Mobile Television: Its Development and Strategy

  1. 1. Mobile Television: The Emergence of a Personal-Mass Media Platform Sylvia Chan-Olmsted Professor and Associate Dean for Research Department of Telecommunication College of Journalism and Communication
  2. 2. An Emerging Main Stream Medium – everyone has it! HK: 130% Cable TV: 70% Broadband Internet: 53%
  3. 3. An Emerging Main Stream Medium – not just a telephone! Communication + Interacting with the phone
  4. 4. Some U.S. Mobile Consumption Facts <ul><li>Browsing news/information on mobile Internet is also a popular mobile activity. </li></ul><ul><li>Yahoo sites (email, IM, search, news, directory, weather, etc.) are most popular in mobile usage (14.1 million), followed by Google sites (8.2 million) </li></ul><ul><li>Top three mobile news sites are CNN/cnn.com, Yahoo, and ESPN Sports News. </li></ul>The importance of familiar media content and brands
  5. 5. I want my mobile phone… SMS MMS IM Broadband Internet Email Television High quality audio Banking Bill payment Shopping Gaming GPS Traditional media on a new platform
  6. 6. Presentation Outline <ul><li>Background Information </li></ul><ul><ul><li>Continuous demand for TV consumption </li></ul></ul><ul><ul><li>Mobile Development Worldwide </li></ul></ul><ul><li>The Characteristics of Mobile TV </li></ul><ul><li>Mobile TV Technology </li></ul><ul><li>Characteristics of Mobile TV Consumers </li></ul><ul><li>Mobile TV Consumption Patterns and Drivers </li></ul><ul><li>Mobile TV Content Issues </li></ul><ul><li>Mobile TV Regulatory Issues </li></ul><ul><li>Mobile TV Business Considerations </li></ul>
  7. 7. Television vs. Mobile Television – Traditional TV Overview <ul><li>TV continues to be an important medium for the Americans </li></ul><ul><ul><li>8 hours 11 minutes per day for an household </li></ul></ul><ul><ul><li>4 hours 31 minutes per day for an adult male </li></ul></ul><ul><ul><li>5 hours 17 minutes per day for an adult female </li></ul></ul><ul><ul><li>3 hours 19 minutes per day for teens/children </li></ul></ul><ul><li>Access to multiple TV sets on the rise </li></ul><ul><ul><li>82.5% of households have multiple TV sets </li></ul></ul><ul><ul><li>3.17 sets per household </li></ul></ul>
  8. 8. The Worldwide Growth of a New Content Delivery Platform <ul><li>Americans began to receive broadcast TV on mobile phones in early 2007 </li></ul><ul><li>Vodafone Germany delivered Tour De France live in 2006 </li></ul><ul><li>TU Media Korea has multiple mobile TV services since 2005. One in seven Koreans watch TV on their mobile phones. </li></ul><ul><li>44 million mobile TV users globally by the end of 2005– Asia takes the lead (70% in Asia) </li></ul><ul><li>Europe and North America are expected to grow substantially </li></ul>
  9. 9. Mobile TV Viewers Worldwide VAS Research Series 2007
  10. 10. Television vs. Mobile Television – The Nature of Mobile TV <ul><li>Conceptual Mobile TV = Mobile phone + TV + Internet </li></ul><ul><li>Conceptual Mobile TV = TV with Mobility and Interactivity </li></ul><ul><li>Mobile TV in the Context of TV Evolution </li></ul>Fixed-Line Digital High Definition Television Cable Satellite Broadband (IPTV) Mobile Television Point-to-Point (3G Cellular networks) Broadcast (DMB, DVB-H, and MediaFLO) Traditional Over-the-air Broadcast Television Multi-channel Analog Television Satellite Cable Continuous, Complementary Viewing Experience
  11. 11. The Characteristics of Mobile TV Fixed-line Television Broadband Internet Fixed-line Telephone Mobile Telephone Mobile Television Mobility Immediacy Emotional attachment Personalization Interactivity Privacy Intimacy Interpersonal communication Interactivity Personalization Control Community Information Content multiplicity Content multiplicity Boredom relief Information Entertainment More passive consumption
  12. 12. Mobile TV Development Issue I: Technology <ul><li>Choice of Mobile TV platform is influenced by cost, regulation, and applications planned. </li></ul>Variety, additional network and handsets needed Price, performance, low RPM (streaming 1 video channel = 75 voice calls) Disadvantages Cost structure (no incremental cost to serve more subs), performance Variety, currently in place, on-demand Advantages Medium Medium Power High Medium Mobility High Variable Quality Low High Cost One-to-many One-to-one Typology Dedicated Broadcast Networks (S-DMB/T-DMB, DVB-H, MediaFLO) 3G High-Capacity Cellular Networks
  13. 13. Mobile TV Development Issue II: Consumer <ul><li>Who are the mobile TV users? </li></ul><ul><li>Early adopter profile </li></ul><ul><li>Young males (65% male, 64% ages 20-30 in Korea) </li></ul><ul><li>Urban mobile customers (82% in urban areas in Korea) </li></ul><ul><li>Ethnically diverse in the U.S. </li></ul><ul><li>Young adults who like texting, streaming, podcasting, and other technologies </li></ul><ul><li>Prior multimedia experience (esp. for mobile video), equipment, and age influence receptivity of mobile TV </li></ul>
  14. 14. U.S. Mobile TV Consumers Telephia Mobile Video Diary Report 2006 Mobile TV users are ethnically diverse Not just for the very young; over half are In the age group 18-36 Skewed toward male
  15. 15. Mobile TV Development Issue II: Consumption Patterns <ul><li>Mobile TV was most used during commutes, waiting situations, and work/school breaks. </li></ul><ul><ul><li>In the United States: Home (22%), commuting (22%), shopping (16%), and work (14%) </li></ul></ul><ul><li>Mobile TV prime time is between noon and 8 pm and during weekdays. </li></ul><ul><li>Mobile TV consumption time is increasing from short 5 minute snacking to up to 30 minutes. </li></ul><ul><li>Gradual increase of consumption time and number of locations (increasing home access) </li></ul>
  16. 16. U.S. Mobile TV Usage by Daypart Telephia Mobile Video Diary Report 2006 3% 2 am – 6 am 11% 11 pm – 2 am 9% 8 pm – 11 pm 31% 4 pm – 8 pm 30% Noon – 4 pm 9% 9 am – noon 9% 6 am – 9 am Percent (%) Daypart
  17. 17. U.S. Mobile Video Usage Small portion of mobile Users; Infrequent usage
  18. 18. Mobile TV Development Issue II: Consumption Patterns/Motivations <ul><li>Motivations </li></ul><ul><li>Flexibility, independence, and a sense of community </li></ul><ul><li>Enhanced personal and intimate viewing experience </li></ul><ul><li>Time and location-sensitive information </li></ul><ul><li>Filling empty time </li></ul><ul><li>Personal content creation </li></ul>
  19. 19. Mobile TV Development Issue II: Consumption Patterns/Motivations <ul><li>Conditions for mobile television adoption </li></ul><ul><li>Affordable pricing </li></ul><ul><li>Good technical functionality </li></ul><ul><li>Simple and intuitive usability </li></ul><ul><li>High-quality pictures and sounds </li></ul><ul><li>Mobile device functions uncompromised by TV applications </li></ul><ul><li>Suitable content for mobile viewing </li></ul><ul><li>“ Brand” (familiarity) is important during the initial stage of adoption. </li></ul>
  20. 20. U.S. Mobile Subscribers’ Key Motivators in Subscribing to Mobile TV Service <ul><li>Cost of service (64%) </li></ul><ul><li>Available channels (52%) </li></ul><ul><li>Picture quality (49%) </li></ul><ul><li>Screen size (47%) </li></ul><ul><li>Channel reception (46%) </li></ul><ul><li>Sound quality (39%) </li></ul><ul><li>Ease of use (36%) </li></ul><ul><li>Security (21%) </li></ul><ul><li>2007 ComScore Survey </li></ul>
  21. 21. Mobile TV Development Issue III: Content <ul><li>Technology = enabler </li></ul><ul><li>Content = driver </li></ul><ul><li>Content Types </li></ul><ul><li>Repurposed Video (full-lengths and recaps/previews/highlights) </li></ul><ul><ul><li>On demand or scheduled rebroadcast </li></ul></ul><ul><li>Simulcast TV (Live broadcast) </li></ul><ul><li>User-generated video </li></ul><ul><li>Original made-for-mobile video </li></ul><ul><li>Familiarity is important as this stage so repurposed content is preferred (the brand factor!) </li></ul>
  22. 22. Mobile TV Development Issue III: Content <ul><li>Sample services: </li></ul><ul><li>US Verizon offers 8 channels (CBS, Comedy Central, ESPN, Fox, MTV, NBC News, NBC Entertainment, and Nickelodeon); Vcast mobile video (streaming video clips). </li></ul><ul><li>MobiTV on AT&T – 50+ channels (streaming video clips such as ABC News, Access Hollywood, TLC, Discovery, Animal Planet, etc.). </li></ul><ul><li>Orange France – 51 channels; Orange UK – 16 channels; Vodafone Germany – 30 channels; Italy – 15 channels. </li></ul>
  23. 23. Mobile TV Development Issue III: Content <ul><li>Typical content genres are drama, soaps, news, sports, and reality programs </li></ul><ul><li>Highly-rated dramas/soaps are popular in Korea </li></ul><ul><li>Reality mobile programs are popular in Europe </li></ul><ul><li>News, weather, children/cartoon, comedy, and sports are popular in the US. </li></ul><ul><li>New mobile content considerations: no need for details; use of a simple plot </li></ul>
  24. 24. U.S. On-Demand Mobile TV Usage Short clips - Music, news, Sports, Weather, Comedy, Animations, Highlights
  25. 25. Mobile TV Channels Ranked by Share of Total Audience Telephia Mobile TV Diary Report 2006 12% 11. E! 12% 11. CNN 13% 10. Discovery Channel 15% 8. Discovery Kids 15% 8. Accuweather 16% 7. Comedy Central 20% 6. NBC Mobile News 22% 5. Fox News 29% 4. ESPN 31% 3. Fox Sports 32% 2. The Weather Channel 40% 1. ABC News Total Audience Channel
  26. 26. U.S. Mobile TV Content Preferences <ul><li>Consumers prefer to watch traditional-style mobile TV rather than modified or specialized content (i.e., full-length and general content) </li></ul><ul><li>Consumers prefer local news, dramas, movies, and sitcoms. </li></ul><ul><li>2007 ComScore Survey </li></ul>
  27. 27. Mobile TV Development Issue III: Content <ul><li>Two mobile TV views: mobisodes (“24” and “Lost”) vs. mobile traditional TV (repurposing regular TV) </li></ul><ul><li>Mobile TV production considerations: limited time length, plots, themes, props, and people </li></ul><ul><li>Access to traditional broadcast content a critical key to mobile TV content development (cases in Korea and Italy) </li></ul><ul><li>Incorporating user-generated content (H3G in Italy, YouTube and Vcast) </li></ul><ul><li>From “m”obile company to “m”edia company (UK’s “3” mobile company) </li></ul>
  28. 28. Mobile TV Development Issues IV - Regulation <ul><li>How to regulate converging telephone/television industries? </li></ul><ul><li>Should mobile TV be regulated under the same framework as traditional broadcast TV? </li></ul><ul><li>What about content rights of mobile contents? E.g., retransmitted broadcast signals (Is the broadcast right of a content product transferable disregard of the reception device) </li></ul><ul><li>And the key question of today: the unbundling, open access of mobile platform </li></ul><ul><ul><li>Google’s bid of the newly available radio frequencies </li></ul></ul><ul><ul><li>Verizon’s announcement to open its network </li></ul></ul><ul><li>Open access is likely to lead to more innovative applications </li></ul>
  29. 29. Mobile TV Development Issues V – Alliances and Marketing <ul><li>Alliances are essential for emerging markets – especially with content producers (e.g., TIM & News Corp.; Vodafone & Mediaset) </li></ul><ul><li>Marketing is important for affecting new consumption/behavior (brand recognition and familiarity); cross-promotion on multiple platforms </li></ul>Mobile Device Manufacturers Television Broadcasters Media Portal Mobile Network Operators (Operator Portal) Mobile Content Packagers/ Aggregators Mobile Content producers Mobile Users
  30. 30. Mobile TV Development Issues V – Business Models <ul><li>Mobile has been more successful in establishing the receptivity toward consumers’ paying for content – ability to experiment with different business models. </li></ul><ul><li>Often begin with short-term free trials </li></ul><ul><li>3G network pricing models (event or sub based): </li></ul><ul><ul><li>Free content but charge by data packet rate (unsuitable for premium contents) </li></ul></ul><ul><ul><li>Content charge only (RPM problem) </li></ul></ul><ul><ul><li>Content charge plus data-packet rate (confusing to consumer) </li></ul></ul><ul><ul><li>Fixed subscription fee (more for frequent, repeated access) </li></ul></ul><ul><ul><li>Bundled package pricing (strategic bundling value) </li></ul></ul><ul><li>People prefer packages rather than pay per view (not good for premium contents) </li></ul><ul><li>Issues for the new broadcast platform: </li></ul><ul><ul><li>Optimal pricing points for branded vs. unbranded and original vs. repurposed content </li></ul></ul><ul><ul><li>Price a content that is free on other platforms </li></ul></ul>
  31. 31. Mobile TV Development Issues V –Business Models <ul><li>Content providers need incentives (revenue-sharing) to develop/assemble content products. </li></ul><ul><li>Revenue Sharing Models: </li></ul><ul><ul><li>Upfront fixed-cost payment vs. revenue sharing percentage to channel members </li></ul></ul><ul><ul><li>Japan’s DoCoMo keeps 12%; Italy’s H3G keeps 85% of the revenues </li></ul></ul><ul><ul><li>Percentage to content providers influence availability of good content products </li></ul></ul>
  32. 32. Mobile TV Development Issues V –Business Models <ul><li>Mobile Advertising – targeted medium platform with mobility, personalization, and interactivity. </li></ul>
  33. 33. Ad Budget Shares of Emerging Media AAF Nov. 2006 3.6 Video game 5.2 Mobile 5.5 RSS 7.7 Social networking 8.0 Podcasts 8.4 Blogs 14.9 Online video 27.0% Search % of Budget Media
  34. 34. Mobile TV Development Issues V –Business Models <ul><li>Mobile Advertising Scenario: </li></ul><ul><ul><li>SMS/MMS type ads </li></ul></ul><ul><ul><li>Multimedia placement ads with/without reduced subscription rate for commercial breaks on mobile TV </li></ul></ul><ul><ul><li>Use product placement or sponsorship </li></ul></ul><ul><li>Challenges </li></ul><ul><ul><li>Contextual targeting with personalized and relevant content is critical </li></ul></ul><ul><ul><li>Lack of audience measurement data </li></ul></ul><ul><ul><li>Consumers have low tolerance of mobile TV commercials </li></ul></ul><ul><ul><li>More than half of consumers are not willing to watch ads on their phones in return for free mobile applications </li></ul></ul>
  35. 35. Mobile Advertising Spending E.g., SMS E.g., placement ads 93.64% 100% 111.54% 136.36% -- Growth Percentage (%) 213 110 55 26 $11 U.S. mobile multimedia ad spending 40.13% 47.71% 76.20% 114.15% -- Growth Percentage (%) $3,202 $2,285 $1,547 $878 $410 U.S. general mobile ad spending AD SPENDING IN MILLIONS 2010 2009 2008 2007 2006
  36. 36. Overall Mobile Business Considerations <ul><li>State of the Business </li></ul><ul><li>Messaging (text, multimedia and instant messaging, and email) generates the largest revenue ($5.9 billion in 2007; projected to reach $15 billion in 2010). </li></ul><ul><li>Entertainment and information contents generate similar levels of revenues now, but entertainment is expected to outpace information revenues. </li></ul><ul><li>Package of mobile TV, high quality audio, and data services might be most attractive. </li></ul>
  37. 37. U.S. Mobile Phone Application Revenues
  38. 38. Mobile TV Development Issues V –Business Considerations <ul><li>Mobile TV is a long-term strategy. </li></ul><ul><li>It provides broadcasters opportunities for personalization and targeting, not necessarily revenue potentials. </li></ul><ul><li>It offers opportunities for recuperating 3G license fees (e.g., European operators). </li></ul><ul><li>Its strategic value is in integrated services and triple- to quadruple-play competition </li></ul>
  39. 39. Mobile TV Development Issues V – Quadruple-Play Business Strategy Fixed-Line Telephone Mobile Telephone Broadband Internet Fixed-Line Television Cox Communications and Comcast (VoIP, Cable Modem, and Cable Television Verizon and AT&T Cingular Voice Telephone, DSL, IPTV, and Mobile Phone MVNO (Sprint) Bidding on the new UHF mobile freq.
  40. 40. Conclusions <ul><li>U.S. Mobile TV is in its infancy, worldwide mobile development may serve as a reference point. </li></ul><ul><li>Mobile TV is a convergence between telephone and television – There are fundamental differences in consumer expectations and behavior. </li></ul><ul><li>Converging industries present challenging technological, business, and regulatory issues (e.g., changing consumer demand/usage patterns, product development, cross-platform, unbundling practices, and emerging, risky business models). </li></ul><ul><li>Mobile TV = diverse needs + content familiarity </li></ul><ul><li>Mobile platform is a crucial part of the multilateral competition between media/telecom firms. </li></ul><ul><li>Mobile TV is complementary to fixed TV and offers unique marketing utilities for traditional media content. </li></ul><ul><li>The recent move toward open access means more innovative applications so get ready for the ride. </li></ul>

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