Home > Mobile > Why Mobile TV Failed?

Why Mobile TV Failed?

mobileTVIn a recent article in BBC, Maggie Shiels discusses future of mobile TV (http://news.bbc.co.uk/2/hi/technology/8210677.stm) and why it was a failure. Once; early 2000, a darling of mobile wireless community, it is now considered a failed attempt. But no one in mobile community has spent time to analyze its failure and propose a remedy for it and other potential technologies like Mobile TV. It started like other hyped technologies by unrealistic forecasting. Analysts predicted more than 80% penetration in developed countries by 2010; US supposes to lead the market because Americans love TV! Shiels argues that one of the reasons for failure in US is lack of smart phone penetration in the market. At the moment, the smart phones make 18% of total mobile phones in the US. However, just 28% of mobile users with smart phones, use mobile TV feature (13.4 million users in US in 2008). She forecasts 300 million mobile TV subscribers by 2013 with biggest growth in emerging markets. This is a quarter of what most analysts forecasting around 2002!

But the fundamental issue that no one has addressed so far is lack of correlation between content and mobile communities. While big vendors, like Nokia and Qualcomm, were pushing for a broadcast model, content community believed in a “snack” model for mobile video. Mobile vendors, were trying to push a full-fledge broadcasting network philosophy, because they like to sell more hardware and new platforms. Content and broadcasting community on the other hand, did not see the value for a 24/7 broadcasting model, because phone was not a perfect “third screen” for them to generate revenue. People were talking about watching football matches and concerts on their mobile phones without considering reality. During “planned events” (like football matches and other important sport events, concerts, etc) mobile operators see a dramatic reduction on their network load in general! Fanatic sports fans who want to watch a football match or Super Bowl in US, planned their party in advance. They will be at home with other friends and use their HD TV to have the best experience. Jonathan Barzilay, Flo TV’s senior vice president of programming and advertising mentioned “we have seen tremendous spikes in viewing for live news and sport”. But he didn’t mention the size of this spike! Of course, there people who can not be at home and watch planned-events, but they are minority. Probably this spike is from 100s to 10,000s; still too low for mobile operators to justify huge investment. And of course there are “un-planned” events. September 11th 2001, everyone wanted to have the news, but even CNN web site crashed! It is not realistic to design and deploy a network for once in a lifetime event.

Lets be realistic next time when we want launch a technology. I am afraid, it is not going to be the last time!

Categories: Mobile Tags: ,
  1. Stefan Vlachos
    September 6, 2009 at 11:50 pm

    Thank for the link. You make a very good point about choosing technologies, and I agree completely.

    On top of that, there is a point about trends in TV consumption, where entertainment consumoption is moving quickly towards the on-demand model. On-demand is of course not supported by a broadcast technology. Here, mobile consumption will be NO different from web consumption.

    Then there is the business model issue – free/ad-funded vs premium/pay-TV. Again, there is no reason to think that the transport mode or consumption device will make a difference. Consumers expect ordinary TV (the channels that carry the soaps, the reality shows etc.) to be ad-funded. There is low willingness to pay for that type of “lean-back” content. On the other hand, that willingness is very high for premium content, such as sports and high quality entertainment (the type that is typically pirated). As for news, this is what most people state that they want – but when it comes to actual purchases, it is the category with lowest penetration. Few people are willing to sign up for a subscription to news “just in case” there is a major event.

    Ad funded will not necessarily mean traditional pre- mid- and post rolling ads. The mobile actually present many more intersting opportunities, but that is a whole othe story. Key, of course, is to have a large viewership reach.

    Also, the fact that mobile viewing is very much like web/Internet viewing, will mean that the natural place for a consumer to look for moibile TV, is the same place that they look for web TV, ie from the channels or channel aggregators and not from their mobile operators.

    Last, there is the intellectual property rights – and the amount of money that rights owners want to charge for mobile rights. Those are just way out of proportion considering the size of the audience and their willingness to pay. My feeling here is that this is very much because large mobile operators spent HUGE sums on rights, both for entertainment and sports, in the early days of mobile TV and thereby ruined the market.

    Having said all this, I am completely convinced that there is a big demand for video on portable devices.

  2. September 15, 2009 at 1:56 am

    Yeah, People would like to go for the best, largest and the most available resource to watch their fav program rather and would still prefer a PC with netconnection if not a TV

  3. martin
    September 15, 2009 at 1:45 pm

    I always thought mobile video was over hyped. All telecomms apps have been viral – phone calls for instant communications, text for when you don’t want a reply or to speak.

    The TV option works well for short clips of people and animals doing stupid things, or to contact your friends with a sudden event, or a new music video just released. When we were designing these things, we saw a major disjunction between the engineers and the marketers (who just wanted to talk about ways of raising money).

    The future of telecomms is smaller and links to larger monitors (shops and cafes with monitors where you can plug in your phone and PDA to carry out work more comfortably).


  4. Former In-Stat Analyst
    November 19, 2009 at 7:10 pm

    Mobile video’s failure was rooted in the same thinking that brought us MMS… that the mobile operator’s ecosystem was dominant and completely separate from the rest of the world. MMS failed because it was intended only to send picture from phone to phone when people wanted to print, and share, and view pictures on their computers. The mobile standards never considered those things at the time of launch.

    Mobile video was conceived the same way… mobile operators would charge per byte/per download/per subscription while the majority of people viewed video at no charge in their living rooms and computers.

    More important, the business model for TV and video were well established. Mobile TV (such as MediaFLO) are trying the same high-handed approach to charging and restricting content. But the critical missing link was to the sources of programming and the sources of revenue. Brand advertisers and local advertisers have a 50-year history of supporting video through advertising. Ad agencies, creative companies, TV producers and networks all have a smoothly-operating system that brings in money based on that model. Trying to throw that away and starting over with an operator-centric model is the biggest problem they will have to face for a long time to come.

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