It’s TV, but not as you know it
Mobile broadband networks will drive multimedia uptake
THE 3GSM gathering of the cellphone industry in Barcelona last month featured a session called “How Mobile is Changing TV Forever”. It’s a strong statement, but a declaration a few years ago that “mobile is changing music forever” would now have been proven true: artists can now make more money from ringtones than CD singles, and downloadonly songs regularly top the charts.
The music phone was the must-have handset last year, and Sony Ericsson’s Walkman phones (the Walkman cassette player was the iPod of the Eighties) are even credited for the resurgence of the Swedish-Japanese joint venture.
Apple’s iPhone, to be launched mid-year, will give music on mobile networks another boost – its iTunes service last year surpassed 1bn in downloads. A total of $9bn (R64bn) was spent on mobile music last year and this is set to grow to $32bn by 2010 (R227bn). This is despite Edgar Bronfman, CEO of No1 music company Warner, saying at the conference “how cumbersome, expensive and complicated it still is to buy a song over the air”.
Can mobile TV recreate the success of mobile music? The industry is betting on it. Network operators such as 3, Vodafone and MTN want to offer television and other multimedia services to increase declining Arpus (average revenue per user) and reduce churn. Equipment manufacturers and network builders such as Ericsson and NokiaSiemens need new projects as sharing among operators increases (Vodacom and Cell C share many base stations, for instance) and 3G rollout in developed markets approaches completion. And handset manufacturers are always looking for new features to add as built-in digital cameras, MP3 players and push email come closer to being “entry level” in these markets.
There are two ways of delivering television and multimedia to the cellphone – broadcasting directly to the handset or streaming via broadband networks. CarlHenric Svanberg, chief executive of Ericsson, the world’s largest mobile-infrastructure company, says 2006 was the breakthrough year for mobile broadband. While 3G can handle video streaming, high-quality multimedia content is only really possible through the first evolution of 3G called HSDPA, which is capable of ADSL-type speeds.
There are now 196 HSDPA devices, 86 of which are phones, from 51 suppliers on the market and 98 commercial HSDPA networks in 53 countries. “The eco-system is in place,” says Svanberg.
Ericsson is speeding up its investment in multimedia after restructuring last year to form a division dedicated to multimedia content platforms. Apart from a long-stand- ing partnership with Napster, the service that popularised Internet music download in the late Nineties, Ericsson recently concluded deals with Turner Broadcasting to deliver CNN Mobile and Cartoon Network, among others channels.
More than 120 mobile network operators around the world have launched mobile TV services, including Vodacom and MTN,
“Bigger and better handset screens and higher network speeds are behind the increasing popularity of mobile TV.”
which are in trials in partnership with DStv, switching to a commercial service by midyear.
Kurt Sillén, VP of Ericsson Mobility World, says bigger and better handset screens and higher network speeds are behind the increasing popularity of mobile TV. The number of mobile TV users is forecast to increase from 11m in 2006 to 170m by 2010.
Almost 90% of the TV services run on cellular networks, making interactivity and personalisation possible, in contrast to the linear structure associated with broadcasting. Research by Ericsson and the Norwegian Broadcasting Corporation showed that usage of interactive mobile TV was double that of traditional mobile channel TV.
Sillén foresees that mobile TV will be split roughly 50-50 between channels and on-demand content, and that downloading to view later, or what can be described as podcasting, which enables better quality video, will emerge over time.
The number of mobile TV users is forecast to increase from 11m in 2006
to 170m by 2010.
Viewing behaviour is referred to as “snacking” – 2-3 minute sessions averaging only 20-30minutes a month. Mark Burk, an analyst at research firm Informa Telecoms and Media, says that while news, weather and sports are the content categories subscribers generally ask for, Vodafone Netherlands found that actual usage showed adult content made up 38% of the total.
For operators and content providers there are various business models. “Interaction always works well – a massive 64m SMS votes were cast to decide the winner of reality TV show American Idol last year. Monthly subscription, advertising and on-demand pay-as-you-go are also workable models,” says Sillén.
Currently, most networks have opted for a monthly fee and a typical package would make South Africans’ mouths water: 3 in Italy offer 12 TV channels, 60min/day of calls including video calls and 1Gb of data a month for only Euro 29 (R270).
Els visited 3GSM as a guest of Ericsson Sub-Saharan Africa.
GLOBAL SPENDING ON ONLINE AND WIRELESS CONTENTSource: PwC 2006
The ecosystem is in
A mop top and mobisode, please.