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Mobile Broadcast TV Caution Needed as Bubble Grows!

March 2006

Industry Report

The current hype surrounding broadcast mobile TV services remains out of proportion to any evidence of consumer demand and willingness to pay. The return on investment in mobile broadcast networks remains far from certain and consequently, carriers and other potential suppliers of pay TV services should adopt low risk strategies to participation, including the leasing of broadcast capacity from network owners and a more aggressive evaluation of broadcast over cellular solutions (MBMS). Nevertheless, a combination of bullish optimism and competitive pressures will see the commercial launch of a growing number of dedicated mobile broadcast services in the year ahead. By 2010, we expect 115 million viewers of broadcast-to-mobile TV services worldwide, generating over $5 billion in revenues. DVB-H will be the dominant broadcast to mobile solution in play, accounting for 39% of all mobile TV subscribers.

1 Introduction

As anyone who attended the recent 3GSM Congress in Barcelona can attest, momentum behind broadcast TV to mobile continues to grow. However, the hype surrounding mobile television is being driven primarily by the vendor community, with most carriers remaining ambivalent given high uncertainty as to the scale of the opportunity.

This report addresses the main issues around which most uncertainty exists. Namely:

End User Demand: What latent demand for mobile TV currently exists? How do the metrics being reported from mobile broadcast TV trials and unicast deployments compare with our end user survey results?
Technology evaluation: What are the important implementation issues that will dictate which technology should be adopted for mobile broadcast television?
Value-chain: What role exists for carriers, broadcasters and advertisers in the mobile TV value chain and who should own the broadcast network?
Business Models: Will the commercial TV model be more successful than the pay TV model? Which will offer carriers the greatest margins?
User and revenue forecasts: What is the potential market opportunity? This report includes user, ARPU and total end-user spend forecasts for mobile TV services for each technology, by region.

The analysis in this report builds on the conclusions from our February 2005 report: Mobile Content Broadcasting: Hype Not Justified by Demand! and the report published by our Wireless Devices Strategies service in January 2006, `TV Phones: Integration and Power Improvements Needed to Reach 100 Million Sales.'

1.1 Definitions

We define mobile TV as audiovisual content that is made available on a linear (scheduled) basis. This is usually content that is filmed for television and repurposed for mobiles, but there is a growing tranche of made for mobile programming. This report is concerned primarily with, the broadcast of digital content to portable handheld devices, unless stated otherwise.

Relevant broadcast network technologies mentioned throughout this document are summarized below:

Figure 1 Mobile TV - Standards Definitions

ACRONYM	DEFINITION
DMB-S	Digital Media Broadcast Satellite
DMB-T	Digital Media Broadcast Terrestrial
DVB-H	Digital Video Broadcast Handheld
FLO	Forward Link Only
ISDB-T	International Service Download Broadcast Terrestrial
MBMS/ BCMCS	Multimedia Broadcast Multicast Service/ BroadCast and MultiCast Service

Analog TV phones (e.g. ATSC) and streaming TV-over-cellular are not covered in the scope of this report. However, they may be referred to for historical comparison.

Industry Report
Mobile Broadcast TV: Caution Needed as Bubble Grows!
March 2006

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