You would think from the ecstatic fast cutting commercials that mobile TV is already a big part of day-to-day mobile service.
Not so, at least not yet. Mobile video will be huge, but it will take a while to get there.
Nielsen estimates that mobile video usage grew 70% from 2Q08 to 2Q09 (Nielsen Company, A2/M2 Three Screen Report, Volume 5, 2nd Quarter 2009) . That percentage is impressive, but, according to the Nielsen survey data, there still were only 15.3M average monthly unique users of mobile video during 2Q09, or 5.5% of US mobile subscribers. Nielsen’s estimate includes all forms of mobile video, whether offered by mobile operators or accessed from websites.
Such low usage may be one reason that the operators that offer mobile video — Verizon Wireless, AT&T Mobility and Sprint Nextel – do not report statistics on subscribers’ viewing of their on-demand video clips or TV show episodes.
Why the slow take-up of what ought to be an enticing mobile application?
·Cost: Operators charge more for data packages that include mobile video;
·Performance: Video quality is uneven when the mobile operators’ 3G networks get congested;
·Discovery: It takes determination to work through the menus to select video clips & TV episodes of interest;
·Battery Drain: Playing mobile video on the handset draws on the battery to keep the screen lit full-time, run the radio transceiver, run the internal video processor, and play audio through the handset speaker or Bluetooth. Users learn that watching mobile video eats their batteries, and they adapt accordingly;
Battery drain will remain a long term challenge. The other issues may be easier.
For example, deployment of 4G WiMax and LTE networks will help by supporting higher data rates that improve mobile video quality. Also, more effective capacity over 4G will reduce the need to impose a high price for data-intensive plans in order to ration network usage.
Operators appear to have limited objectives for their initial 4G network deployments. Sprint and cable operator partners are using the Clearwire WiMax network to support nomadic broadband access to the Internet, competing with WiFi hotspots and with data connectivity over 3G. LTE networks built out by the other mobile operators most likely will serve a similarly mundane purpose at first. Eventually, however, the new 4G networks will also be used to enhance value added applications like mobile video.
To deal with 3G network congestion, mobile video could bypass the 3G networks altogether.
Qualcomm’s MediaFLO system achieves this by broadcasting TV channels over Qualcomm’s own spectrum in the 700MHz band. MediaFLO is now available “nationwide” albeit with coverage limited to the larger urban centers. VZW and AT&T Mobility offer MediaFLO but they are proceeding cautiously. Each offers only two MediaFLO-capable handsets, and each charges an additional $15/month for MediaFLO access. To prime the pump, Qualcomm has introduced its own MediaFLO handheld device at a lower $10/month price point; a noble effort, but one that is probably doomed because users are unlikely to purchase and carry around Qualcomm’s single-purpose device just to receive 10+ TV channels.
Another 3G bypass option is to deliver digital TV over broadcast TV spectrum using a telecasting standard recently adopted by the Advanced Television Systems Committee (ATSC). The TV broadcasters think this is a great idea, and they are attempting to persuade mobile operators to offer handsets capable of receiving their digital TV signals. But first, there is a small matter of the business models that have yet to be worked out among the various stakeholders.
To hear a supplier’s perspective on mobile video trends, I talked recently with Allan Benchetrit, pres/CEO of Vantrix, a Montreal-based provider of software that enables operators to extend and manage delivery of their video content to mobile devices and to PC screens. Allan told me that most of Vantrix’s business is overseas since Europe and the Asia Pacific region are generally ahead of North America in adopting value added mobile services.
Nevertheless, Allen said that a major North American cable operator is now preparing to deploy Vantrix software to ingest and manage video for distribution to all three screens used by subscribers. This will enable the operator to replicate its digital cable service by delivering the same video experience to its customers’ mobile handsets and PCs (via online). Allan expects phase one of this rollout to occur during the next few months.
This three-screen system will indicate the consumer appeal of making fixed video content available seamlessly to mobile users. It may provide clues to Verizon and AT&T on how best to converge their mobile wireless, Internet access, and fixed TV products to compete more effectively with each other and with cable.
(Peter D. Shapiro, Ph.D., is founder and principal at PDS Consulting (www.pdsconsulting.net), which specializes in cable and telecommunications assignments. PDS Consulting clients include operators, financiers, attorneys, industry associations, and government agencies. He provides opportunity assessments, due diligence analyses, competition monitoring and evaluation, and industry expert litigation support. He can be reached at Peter@PDSConsulting.net).