| Posted on the CHARGED website by Darren Francis | |
| Thursday, 29 March 2007 | |
| Mobile TV has the potential to generate much needed data revenue but only if operators can attract sufficient subscribers to interest advertisers.
� TV broadcasting will reach 133 million subscribers by 2010 - due in the main to the growing availability of broadcast-enabled phones* - with Japan as the region leading the way followed by Western Europe.�
However, attracting and maintaining a healthy installed base of mobile TV subscribers will be far from straight forward. To-date consumers have, in general, remained ambivalent about watching TV on the move and although the uptake of mobile TV services will grow at a considerable rate over the next few years, most subscribers will receive mobile TV as part of their mobile subscription. “Uptake will not be driven by consumer demand so much as by operators including TV in basic bundles as a default service so that it appears ‘free’,” said Carolina Milanesi, research director at Gartner. Gartner estimates that only 30 percent of the total number of mobile TV subscribers will ask for the service while 70 percent will receive it as part of their service bundle.
Table 1: Mobile TV Subscribers, Worldwide, 2006, 2007 and 2010 (Thousands)
� � 2006 � 2007 � 2010� � Cellular Subscribers � 10,942.00 � 37,767.70 � 356,058.70� � Broadcasting Subscribers � 5,972.50 � 21,872.30 � 132,692.80� � Total Subscribers � 16,914.50 � 59,640.00 � 488,751.50 � Note: As Multimedia Broadcast and Multicast Service (MBMS) is an extension of 3G technology, we have included MBMS subscribers under the cellular subscriber’s category rather than the broadcasting one. Source: Gartner Dataquest (February 2007)
The bundling of Mobile TV services together with questionable early demand for premium content and advertising-funded free TV services will mean that in the short term at least, revenue from mobile TV will be depressed. In the long run however Gartner predicts that it still has the potential to be a major overall average per revenue per unit (ARPU) component. “We expect TV services over cellular to show revenue of just over $100 million in 2006, growing to $15 billion by 2010,” said Milanesi.� “Revenue from broadcast TV will grow from $200 million to 10.8 billion over the same period.”
Consequently, Gartner is advising operators to consider revenue models for mobile TV carefully. According to Milanesi, rather than competing on tariffs, they should instead focus on creating a unique ‘Mobile TV experience’ in order to attract an increasing number of subscribers. ”Driving mobile TV uptake in the next three years to grow the installed based of subscribers to a point where it starts to look interesting to advertisers will be key. Mobile tariffs are destined only to decrease in the future and advertising will play a pivotal role in operators’ revenue going forward,” said Milanesi. “The most successful operators where mobile TV is concerned will be those that treat it as a long-term opportunity, not a quick fix.”
Key Gartner recommendations to service providers: * � � � � Mobile operators need to guarantee quality, variety and exclusivity to justify charging a premium for TV services and, in some cases, to justify charging for it at all.� * � � � � Carriers should not count on advertising to subsidise TV services substantially in the next five years, as the subscriber base will remain limited. However, as this base grows and becomes more attractive to advertisers, carriers will need to experiment with advertising - offering an opt-in, opt-out option as the tolerance levels will vary. Operators should look to make mobile TV a unique ‘TV experience’, with mobile-specific or user-generated content from user communities, such as YouTube. |
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