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Mobile Television: The Emergence of a Personal-Mass Media Platform

Mobile Television: The Emergence of a Personal-Mass Media Platform Sylvia Chan-Olmsted Professor and Associate Dean for Research Department of Telecommunication College of Journalism and Communication An Emerging Main Stream Medium – everyone has it! HK: 130% Broadband Internet: 53%

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Mobile Television: The Emergence of a Personal-Mass Media Platform

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  1. Mobile Television: The Emergence of a Personal-Mass Media Platform Sylvia Chan-Olmsted Professor and Associate Dean for Research Department of Telecommunication College of Journalism and Communication

  2. An Emerging Main Stream Medium – everyone has it! HK: 130% Broadband Internet: 53% Cable TV: 70%

  3. An Emerging Main Stream Medium – not just a telephone! Communication + Interacting with the phone

  4. Some U.S. Mobile Consumption Facts • Browsing news/information on mobile Internet is also a popular mobile activity. • Yahoo sites (email, IM, search, news, directory, weather, etc.) are most popular in mobile usage (14.1 million), followed by Google sites (8.2 million) • Top three mobile news sites are CNN/cnn.com, Yahoo, and ESPN Sports News. The importance of familiar media content and brands

  5. I want my mobile phone… Traditional media on a new platform SMS MMS IM Television High quality audio Banking Bill payment Shopping Broadband Internet Email Gaming GPS

  6. Presentation Outline • Background Information • Continuous demand for TV consumption • Mobile Development Worldwide • The Characteristics of Mobile TV • Mobile TV Technology • Characteristics of Mobile TV Consumers • Mobile TV Consumption Patterns and Drivers • Mobile TV Content Issues • Mobile TV Regulatory Issues • Mobile TV Business Considerations

  7. Television vs. Mobile Television – Traditional TV Overview • TV continues to be an important medium for the Americans • 8 hours 11 minutes per day for an household • 4 hours 31 minutes per day for an adult male • 5 hours 17 minutes per day for an adult female • 3 hours 19 minutes per day for teens/children • Access to multiple TV sets on the rise • 82.5% of households have multiple TV sets • 3.17 sets per household

  8. The Worldwide Growth of a New Content Delivery Platform • Americans began to receive broadcast TV on mobile phones in early 2007 • Vodafone Germany delivered Tour De France live in 2006 • TU Media Korea has multiple mobile TV services since 2005. One in seven Koreans watch TV on their mobile phones. • 44 million mobile TV users globally by the end of 2005– Asia takes the lead (70% in Asia) • Europe and North America are expected to grow substantially

  9. Mobile TV Viewers Worldwide VAS Research Series 2007

  10. Traditional Over-the-air Broadcast Television Multi-channel Analog Television Satellite Cable Fixed-Line Digital High Definition Television Cable Satellite Broadband (IPTV) Mobile Television Point-to-Point (3G Cellular networks) Broadcast (DMB, DVB-H, and MediaFLO) Continuous, Complementary Viewing Experience Television vs. Mobile Television – The Nature of Mobile TV • Conceptual Mobile TV = Mobile phone + TV + Internet • Conceptual Mobile TV = TV with Mobility and Interactivity Mobile TV in the Context of TV Evolution

  11. Content multiplicity Boredom relief Information Entertainment More passive consumption Fixed-line Television Interpersonal communication Interactivity Personalization Control Community Information Content multiplicity Broadband Internet Fixed-line Telephone Mobile Telephone Mobile Television Mobility Immediacy Emotional attachment Personalization Interactivity Privacy Intimacy The Characteristics of Mobile TV

  12. Mobile TV Development Issue I: Technology • Choice of Mobile TV platform is influenced by cost, regulation, and applications planned.

  13. Mobile TV Development Issue II: Consumer Who are the mobile TV users? • Early adopter profile • Young males (65% male, 64% ages 20-30 in Korea) • Urban mobile customers (82% in urban areas in Korea) • Ethnically diverse in the U.S. • Young adults who like texting, streaming, podcasting, and other technologies • Prior multimedia experience (esp. for mobile video), equipment, and age influence receptivity of mobile TV

  14. U.S. Mobile TV Consumers Mobile TV users are ethnically diverse Not just for the very young; over half are In the age group 18-36 Skewed toward male Telephia Mobile Video Diary Report 2006

  15. Mobile TV Development Issue II: Consumption Patterns • Mobile TV was most used during commutes, waiting situations, and work/school breaks. • In the United States: Home (22%), commuting (22%), shopping (16%), and work (14%) • Mobile TV prime time is between noon and 8 pm and during weekdays. • Mobile TV consumption time is increasing from short 5 minute snacking to up to 30 minutes. • Gradual increase of consumption time and number of locations (increasing home access)

  16. U.S. Mobile TV Usage by Daypart Telephia Mobile Video Diary Report 2006

  17. U.S. Mobile Video Usage Small portion of mobile Users; Infrequent usage

  18. Mobile TV Development Issue II: Consumption Patterns/Motivations Motivations • Flexibility, independence, and a sense of community • Enhanced personal and intimate viewing experience • Time and location-sensitive information • Filling empty time • Personal content creation

  19. Mobile TV Development Issue II: Consumption Patterns/Motivations Conditions for mobile television adoption • Affordable pricing • Good technical functionality • Simple and intuitive usability • High-quality pictures and sounds • Mobile device functions uncompromised by TV applications • Suitable content for mobile viewing • “Brand” (familiarity) is important during the initial stage of adoption.

  20. U.S. Mobile Subscribers’ Key Motivators in Subscribing to Mobile TV Service • Cost of service (64%) • Available channels (52%) • Picture quality (49%) • Screen size (47%) • Channel reception (46%) • Sound quality (39%) • Ease of use (36%) • Security (21%) 2007 ComScore Survey

  21. Mobile TV Development Issue III: Content Technology = enabler Content = driver Content Types • Repurposed Video (full-lengths and recaps/previews/highlights) • On demand or scheduled rebroadcast • Simulcast TV (Live broadcast) • User-generated video • Original made-for-mobile video • Familiarity is important as this stage so repurposed content is preferred (the brand factor!)

  22. Mobile TV Development Issue III: Content Sample services: • US Verizon offers 8 channels (CBS, Comedy Central, ESPN, Fox, MTV, NBC News, NBC Entertainment, and Nickelodeon); Vcast mobile video (streaming video clips). • MobiTV on AT&T – 50+ channels (streaming video clips such as ABC News, Access Hollywood, TLC, Discovery, Animal Planet, etc.). • Orange France – 51 channels; Orange UK – 16 channels; Vodafone Germany – 30 channels; Italy – 15 channels.

  23. Mobile TV Development Issue III: Content • Typical content genres are drama, soaps, news, sports, and reality programs • Highly-rated dramas/soaps are popular in Korea • Reality mobile programs are popular in Europe • News, weather, children/cartoon, comedy, and sports are popular in the US. • New mobile content considerations: no need for details; use of a simple plot

  24. U.S. On-Demand Mobile TV Usage Short clips - Music, news, Sports, Weather, Comedy, Animations, Highlights

  25. Mobile TV Channels Ranked by Share of Total Audience Telephia Mobile TV Diary Report 2006

  26. U.S. Mobile TV Content Preferences • Consumers prefer to watch traditional-style mobile TV rather than modified or specialized content (i.e., full-length and general content) • Consumers prefer local news, dramas, movies, and sitcoms. 2007 ComScore Survey

  27. Mobile TV Development Issue III: Content • Two mobile TV views: mobisodes (“24” and “Lost”) vs. mobile traditional TV (repurposing regular TV) • Mobile TV production considerations: limited time length, plots, themes, props, and people • Access to traditional broadcast content a critical key to mobile TV content development (cases in Korea and Italy) • Incorporating user-generated content (H3G in Italy, YouTube and Vcast) • From “m”obile company to “m”edia company (UK’s “3” mobile company)

  28. Mobile TV Development Issues IV - Regulation • How to regulate converging telephone/television industries? • Should mobile TV be regulated under the same framework as traditional broadcast TV? • What about content rights of mobile contents? E.g., retransmitted broadcast signals (Is the broadcast right of a content product transferable disregard of the reception device) • And the key question of today: the unbundling, open access of mobile platform • Google’s bid of the newly available radio frequencies • Verizon’s announcement to open its network • Open access is likely to lead to more innovative applications

  29. Television Broadcasters Media Portal Mobile Content Packagers/ Aggregators Mobile Network Operators (Operator Portal) Mobile Users Mobile Content producers Mobile Device Manufacturers Mobile TV Development Issues V – Alliances and Marketing • Alliances are essential for emerging markets – especially with content producers (e.g., TIM & News Corp.; Vodafone & Mediaset) • Marketing is important for affecting new consumption/behavior (brand recognition and familiarity); cross-promotion on multiple platforms

  30. Mobile TV Development Issues V – Business Models • Mobile has been more successful in establishing the receptivity toward consumers’ paying for content – ability to experiment with different business models. • Often begin with short-term free trials • 3G network pricing models (event or sub based): • Free content but charge by data packet rate (unsuitable for premium contents) • Content charge only (RPM problem) • Content charge plus data-packet rate (confusing to consumer) • Fixed subscription fee (more for frequent, repeated access) • Bundled package pricing (strategic bundling value) • People prefer packages rather than pay per view (not good for premium contents) • Issues for the new broadcast platform: • Optimal pricing points for branded vs. unbranded and original vs. repurposed content • Price a content that is free on other platforms

  31. Mobile TV Development Issues V –Business Models • Content providers need incentives (revenue-sharing) to develop/assemble content products. • Revenue Sharing Models: • Upfront fixed-cost payment vs. revenue sharing percentage to channel members • Japan’s DoCoMo keeps 12%; Italy’s H3G keeps 85% of the revenues • Percentage to content providers influence availability of good content products

  32. Mobile TV Development Issues V –Business Models • Mobile Advertising – targeted medium platform with mobility, personalization, and interactivity.

  33. Ad Budget Shares of Emerging Media AAF Nov. 2006

  34. Mobile TV Development Issues V –Business Models • Mobile Advertising Scenario: • SMS/MMS type ads • Multimedia placement ads with/without reduced subscription rate for commercial breaks on mobile TV • Use product placement or sponsorship • Challenges • Contextual targeting with personalized and relevant content is critical • Lack of audience measurement data • Consumers have low tolerance of mobile TV commercials • More than half of consumers are not willing to watch ads on their phones in return for free mobile applications

  35. Mobile Advertising Spending E.g., SMS E.g., placement ads

  36. Overall Mobile Business Considerations State of the Business • Messaging (text, multimedia and instant messaging, and email) generates the largest revenue ($5.9 billion in 2007; projected to reach $15 billion in 2010). • Entertainment and information contents generate similar levels of revenues now, but entertainment is expected to outpace information revenues. • Package of mobile TV, high quality audio, and data services might be most attractive.

  37. U.S. Mobile Phone Application Revenues

  38. Mobile TV Development Issues V –Business Considerations • Mobile TV is a long-term strategy. • It provides broadcasters opportunities for personalization and targeting, not necessarily revenue potentials. • It offers opportunities for recuperating 3G license fees (e.g., European operators). • Its strategic value is in integrated services and triple- to quadruple-play competition

  39. Fixed-Line Telephone Broadband Internet Mobile Telephone Fixed-Line Television Cox Communications and Comcast (VoIP, Cable Modem, and Cable Television MVNO (Sprint) Bidding on the new UHF mobile freq. Verizon and AT&T Cingular Voice Telephone, DSL, IPTV, and Mobile Phone Mobile TV Development Issues V – Quadruple-Play Business Strategy

  40. Conclusions • U.S. Mobile TV is in its infancy, worldwide mobile development may serve as a reference point. • Mobile TV is a convergence between telephone and television – There are fundamental differences in consumer expectations and behavior. • Converging industries present challenging technological, business, and regulatory issues (e.g., changing consumer demand/usage patterns, product development, cross-platform, unbundling practices, and emerging, risky business models). • Mobile TV = diverse needs + content familiarity • Mobile platform is a crucial part of the multilateral competition between media/telecom firms. • Mobile TV is complementary to fixed TV and offers unique marketing utilities for traditional media content. • The recent move toward open access means more innovative applications so get ready for the ride.

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