Mobile TV handsets by region, 2012
Source: Rethink Research
Technology used for mobile TV by 2012
Source: Rethink Research
Mobile TV enabled handsets — cumulative sales
Source: Rethink Research
There are at least 15 separate mobile TV technologies fighting for supremacy.
They range from DVB-H — a European standard — to MediaFLO, a Qualcomm initiative which is said to be twice as efficient, but proprietary; and on to TDtv which requires extra transmitters on base station towers, as well as new receiver chips in handsets. Some systems require a new $100 million satellite. Costs and capabilities vary widely.
This slows down the investment process. Cellular operators want to wait for a winner before investing — but since that means that there can be no winner without cellular operators it just means they will wait and wait.
And it also means that there are no quick returns for venture capitalists when they put funds into component suppliers, or technology enablers such as software providers.
One investor told Rethink Research: "This is a mess. I'd be mad to invest in this," but within a week that same investor was calling once again, thinking that he'd be just as mad to miss the boat.
However, the mobile TV world is settling down and focussing on a handful of technologies. They are being forced together into what will become a number of blended service types, working side by side on the same device.
In Europe there was a consensus that pay TV was the definite way to go. The model Nokia has preached since 2003 involves a combination of low priced subscription, partially subsidised handset, or with the TV service subscription bundled into a bigger bundle of voice minutes and data, and sponsorship instead of advertising.
Free to air
But during the past year those countries which have adopted a free-to-air policy have shifted far more mobile TV handsets.
Japan has now shipped more than 25 million ISDB-T one-seg mobile handsets — see table — and Korea has over 8 million T-DMB devices, many of which are not handsets.
Chip suppliers and device makers are therefore flocking to free-to-air services, which are driving the transition to mobile TV, despite the fact this route does not guarantee any improved ARPU for cellular operators.
Many Western operators are now looking at mobile TV purely as a threat to be countered rather than a service to be offered. In the US AT&T has for the most part copied Verizon in using Qualcomm's proprietary MediaFLO system, not because it thinks it's a good way of offering mobile TV, but just so Verizon cannot gain the upper hand.
None of the global cellular carriers will be able to hold the mobile TV tide back forever. Broadcasters need mobile TV and the potential future advertising revenues that it threatens to bring, which is why technology suppliers have targeted the free-to-air model across the world.
The arrival of such services sets a deadline by which time every cellular operator has to have a clear strategy for how to co-exist with this important new technology — or risk huge desertions from its established customer base, driving churn out of control.
A new report from Rethink Technology Research predicts that 301 million specialist handset devices which can receive one or other format of mobile TV will be sold by 2012.
A further 60 million devices which are not handsets will be added to that, making total shipments of 361 million devices which can view mobile TV.
Transition to new handsets
But that's probably not the key important fact that comes out of this report. Handset transition is key to the emergence of mobile TV services, and this is seen to be more than three times faster in markets where a free-to-air mobile TV business model is adopted.
If cellular operators want to get to a point where paid mobile TV services generate ARPU, the short-cut route is to provoke the mass transition to mobile TV-enabled handsets using a free-to-air service, and from there kick on to offer premium services built around sports offerings, news, movies and TV series.
Other revenues are available for operators — from advertising linked to the electronic programme guide or to channel changes, and over-the-air media asset sales — to augment free-to-air TV services. But once again, these rely on there being enough handsets for mass viewing.
This has already happened in Japan and Korea, and is likely to be repeated shortly in Brazil — where Japanese technology is being used — and in China where for the first year at least content will be free-to-air.
In Italy, on the other hand, we can draw the only example of a typically European route to market, where 3 Italia still dominates, with its paid service approach built around exclusive and shared live sport events, advertising control on its own two channels and clever bundles that include around €19 of ARPU for the TV service.
The US and Europe will initially see slow progress, using content which is already consumed over cellular streaming unicast TV services, rather than making the best of the vastly superior quality that broadcast mobile TV technologies can bring.
The cellular operators will make room for more broadcast-based technologies, but this will not happen until the paid-for mobile model has failed. It is only then that their spending power will begin to see them catching up on the Asia Pacific region.
By contrast the Asia Pacific free-to-air services will find advertising-only approaches tough to bring to profit, but eventually premium services will emerge and they will offer hybrid services — part free, part paid.
It is only then that mobile TV will reach its full promise, emulating traditional TV with its free, paid, premium and pay-per-view layers.
There is a further complication in that many cellular operators are not happy either to invest in new spectrum dedicated to mobile TV.
Where broadcasters want to pay for the creation of a service, such as DVB-H, along with the spectrum, transmitters and content rights, the cellular operators will be happy to sell the service for a minor uplift in ARPU.
However those same operators may also embrace MBMS, which only requires an update to version 6.0 of the 3G base station software, and a software stack being factory-loaded on the handset.
It will be possible for two packages, one paid and one free, to be shown on the same device and appear to be part of the same seamless video experience.
However there is a danger that cellular operators just sit on their hands and prognosticate over various business models for mobile TV, and leave it to the broadcasters, broadcast network owners and handset manufacturers to build the market in their own image.
Searching for a Mobile TV Business Model — Global Handset and Technology Forecast 2008-2012 is published by Rethink Technology Research. Peter White is principal analyst and founder of the organisation
Electronic programme guide: the mobile TV technology choice
| ATSC M/H
|| US terrestrial system, out 2008, with mobile signal|
|| Similar to MBMS multicast but for CDMA cellular systems|
| CMMB STiMi
|| China's hybrid satellite system using separate frequencies to reinforce one another|
| DAB IP
|| Using existing digital audio broadcast (DAB) radio transmitters to send a pure IP packet stream|
|| A new network of one-way transmitters organised into a cluster of up to 20 channels for each 8 MHz of spectrum used|
|| Alcatel's satellite hybrid with same software as DVB-H|
|| The new replacement for DVB-T — European standard digital terrestrial TV — out in 2010, potentially including a mobile TV signal|
| ISDB-T one-seg
|| A 6 MHz TV channel broken into 13 segments, one for mobile TV, the others for high-definition or standard TV signals|
|| Pure cellular multicast broadcasting in existing cellular spectrum|
|| Same as DVB-H with more up-to-date forward error correction|
|| Similar to TDtv from the same company, but with WiMax MBS|
|| Korea's original satellite hybrid now overtaken by T-DMB|
|| DAB with the H.264 codec mandated for video|
|| System developed by NextWave Wireless, with separate transmitters for unpaired TDD spectrum, with multiple antennas and a $20 chip; works with MBMS multicast|
| Unicast streaming
|| Simple real-time streaming protocol over a cellular link|