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Mobile TV is being touted as a killer application by the equipment vendor community. However, the extent to which consumer demand truly exists for accessing TV content on a portable handheld device still remains open to question. This section lays out the evidence to date and evaluates end user demand and willingness to pay for mobile TV. This includes:
In our last mobile broadcast report, we concluded that "We remain unconvinced that consumer appetite for mobile TV services exists outside of niche segments." One year on, we still retain strong reservations that services priced at $10 - $15 per month (as suggested by the companies leading mobile broadcast development) can succeed in penetrating the mass market.
Despite Google's recent UK survey, which suggested that people now spend more time online than they do watching TV, television remains arguably the most popular leisure activity in the world.
According to Strategy Analytics' Digital Consumer Practice, almost 50% of total households worldwide owned a fixed or portable TV appliance in 2005, (1 billion units in 2.5 billion households). Furthermore, globally, the average person watches 16.61 hours of TV per week. So, does the popularity of TV in the home mean that mobile TV will become a consumer success story?
It should be of no surprise that consumers' appetite for watching television is unlikely to directly translate to cellular handsets, especially since people typically watch television during their leisure time, while at home and on a screen significantly larger than that of a mobile phone. Home TV offers a quality of experience that cannot be replicated on a handheld device.
Nevertheless, the idea of mobile TV is a powerful one. Both our own survey work as well as that coming out of other industry studies, suggests that users prefer the concept of access to real time, linear TV content, than they do the idea of a catalogue of video on demand clips.
Over the past 24 months, a significant number of carriers and broadcasters have launched `live' or `near live' unicast mobile TV services, where content is streamed over the 2.5G or 3G network to video enabled handsets. These services provide an early indication of end user demand and willingness to pay for mobile broadcast services.
Although data points are still a rare commodity, some early metrics for mobile TV take-up have been broadly encouraging. For example:
Since September 2004, when a group of companies including Nokia, Vodafone and Philips, partnered to perform a trial of mobile broadcast services delivered over a DVB-H network in Berlin, a significant number of pilot broadcast deployments have taken place in both Europe and other territories (Figure 2).
Location |
Pilot Dates |
Actors |
Users |
Results/Feedback |
Finland, Helsinki |
March 05 - June 05 |
TeliaSonera, Elisa, Nokia, Digita |
500 |
· 41% willing to buy
|
UK, London (M25)
|
June 05 -
|
Virgin Mobile, BT Moviso Arquiva |
1000 |
· 66 minutes of viewing/ week
|
UK, Oxford |
Oct 05 - March 06 |
O2, Arquiva |
375 |
· 83% satisfied with the service
|
France, Paris |
Sept 05 - June 06 |
TDF, Orange, SFR, Bouygues Telecom |
500 |
· 73% satisfied with service
|
Spain,
|
Sept 05 - Feb 06 |
Abertis, Telefonica, Nokia |
500 |
· 55% indicate willingness to pay ~ EUR5 per month
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Although the results and feedback from these paint a broadly positive picture of consumer demand, we do not view the results as a full endorsement of mobile TV by the mass market. In particular, the relatively low willingness to pay of trialists in the BT/ Virgin pilot of DAB in the UK is a concern that is supported by our own end user research findings (see section 3-4).
In South Korea, mobile TV services are being broadcast from a satellite on the S-band at 2.6GHz to compatible handsets. Commercially launched in May 2005, the operating company, Tu-Media, set a target of 662,000 subscribers by the year end, which it missed by almost 300,000 (Figure 3). The implementation has been characterized by high handset costs and legal disputes between broadcast trade unions and Tu-Media regarding content access rights, and we regard this as a further cautionary example.
Strategy Analytics primary consumer research consists of annual surveys and the end user focus group work conducted by our Advanced Wireless Laboratory service. Results from these programs illustrate that levels of demand and willingness to pay for mobile TV remains limited to niche, early adopter segments of the market.
The results of our latest end user survey provide both good and bad news for mobile TV. On the one hand, the number of people expressing little or no interest in the concept of watching TV on their mobile phones remains high across all of the markets surveyed2.
Figure 4 Interest Levels for Accessing TV Programming on Mobile Phones
Mobile TV is also rated less favorably than a variety of other value added services which we tested, ranking 9th from 15.
Figure 5 Interest Levels in Mobile TV Versus Other Applications
On the other hand, enthusiasm for mobile TV has risen over the past 2 years (although perhaps we should say that indifference has lessened!) with 10% more respondents rating mobile TV favorably (a score of 4 or 5) in the 2005 survey than did in 2003.
Evidence of willingness to pay is also appearing within our survey work, albeit at lower levels than is suggested by some of the DVB-H trials discussed earlier. Results include:
Our Advanced Wireless Laboratory Service ran end user focus groups in Munich in November 20053. These were designed to benchmark the usability of Vodafone's and T-Mobile's 3G streaming TV services and to evaluate early adopter mobile users' perceptions of their value. The sessions highlighted a number of issues:
In particular, the experience was marred by poor levels of service reliability and consistency on both networks, with connection failures impacting the quality of the experience.
2 1000 respondents in Western Europe (250 in each of France, Germany, Italy and the UK) and 1000 in the US.
3 Mobile TV Germany: Failing Grades on Content and Network Performances, January 2006
| Industry Report
Mobile Broadcast TV: Caution Needed as Bubble Grows! March 2006 |
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