mobiletv market anylisis

7/30/2019 mobiletv market anylisis

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Mobile TV market analysis

Roland Jakab

[email protected]

+36 30 9843 899

March 2006


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Agenda

The role of mobile TV in operator strategy

Mobile TV in context

Content formats,

Channels and packaging

Adding value

Pricing models

Mobile broadcast - a European overview

Potential business models

Orange France case study


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Level 3

The role of mobile TV in operator

strategy


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Why mobile TV appeals to operators

Seen as a potential hero 3G service

You dont need other people to enjoy it In theory, mass appeal across the base

People seem to like it - respond well in trials and surveys

Some promising usage figures reported

New revenues

Some say differentiation

+ =$


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Usage statisticsHigh level of active usage of mobile

TV/video among 3G customers

Orange France (Oct. 05) SFR (Oct. 05)

Number of mobile TV

users

250,000 * Around 100,000

Mobile TV users as a % of3G/EDGE customers

50% * 20%

Number of sessions (per

month)

Around 3.5 million * 670,000

Average viewing time per

user (min per month)

35 * N/A

Live TV vs. VoD usage 60% live / 40 % VoD 66% live / 33% VoD

* Orange Frances figures include live TV and VoDThats significant! 35 minutes per month

per user, in sessions of 2-3 minutes

Operator


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Is mass market demand really there, will people pay/much?

And if they do, how? Subscription based, pay per view a mix of the two,

advertising supported?

Positioning of mobile TV over cellular and IP datacasting solutions

Regulatory/spectrum issues for mobile broadcast, particularly DVB-H in Europe

Multiple technology solutions for IP datacasting: DVB-H, DAB, DMB-T,MediaFLO etc

Lack of clarity over the business model will it be dominated by operators,

broadcasters or in partnership?

Availability of quality content

Devices

Digital Rights Management (DRM)

Navigation, changing channels

But uncertainties and challenges remain


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Level 3Mobile TV in context


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Mobile TV is not TV on your mobile

Mobile TV is not a substitute for traditional television - it will

complement, not replace, the media that preceded it

This means different usage patterns than traditional TV -implications for programming

TV snacking, not TV dinners. Around 2-3 minutes per session Different usage scenarios

While commuting

Watching mobile TV while waiting or queuing for something

At work during breaks presumably at lunchtime and coffee breaks!

Watching mobile TV at home during peak time TV viewing

But not conclusive that mobile TV appeals to a wide expanded

demographic mix just yet


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Content formats

Existing TVcontent

Extensionsand extras

Unique made-for-

mobile content

User-generatedTV

Examples

Most operators broadcastexisting TV channels

Series 24: ConspiracyLCI Mobile (France)

3 Italys Rai channel

SFR TV Live

TIM Serie A and 3 Italys93minuto (football)

3 UKs SeeMeTV service

O2s Soccer Addict talk show

Drivers

Cheap & easy to do

Familiar content forconsumers

Challenges

Limiteddifferentiation

Not adapted forthe mobile

Reasonable costsLeverage popularcontent

Potential issueswith rights

Differentiation

Need for adaptedmobile content

High costs

Need to advertisethe content

Low costs

Success of mobilecommunities

Encourage usersto share videos


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On demand Vs live

Most operators are giving even weighting to both live TV and video

on-demand.

For Orange France usage is evenly separated between VoD (40% of

sessions) and TV (60%)

VOD is seen as particularly appropriate to cellular, but operators

need to create viewing habits and help users easily find the ondemand programming they want

For example an appointment to view model where, say, news is

shown at set times. Users cannot be expected to wade through

catalogues.


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Channels and packaging

Entertainment, music, sports and news are the staples. But nocommon view in terms of the optimum number of channels

The figure varies widely in Europe between three and sixty

You need a good choice even though consumers might only watch

five channels for the vast majority their viewing time

But big numbers alone do not add value. Focus on:

Personalisation

Interactivity

Easy navigation and channel switching

Strong names, exclusives

Frequently updated news, new video clips,


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SFR interactive TV channel: Label Studio TV

Interactive channel developed byUniversal Music Mobile

IVVR (Interactive Voice & VideoResponse) technology: requiresa video-telephony circuit call

First launched with SFR in July2005

Possible to switch from a musicvideo clip to another, or replay a

clip, just by using the phonekeypad

High costs: 2.19 for the access

+ the cost of the video call


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Pricing models for mobile TV

Two main models today

Flat rate subscription: still rare!

TIM Maxi Mobile: 5/month

Vodafone UK - 2@ 5, 1@3

Limited subscriptions by

Orange France

Pay-per-use: an easy model tolaunch services

TIM Italy - 0.20 per minute

3 Italy - 0.90 per five minutes

SFR in France - 0-0.25 perminute

Amena in Spain - 3 per MB

Other options

Pay-per-view or pay-per-content

More flexible options

E.g. view a football game only,subscribe to a specific channel

Diversified all-you-can-eatbundles

Various packages including

mobile TV channels

Advertising supported


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Level 3Mobile broadcast solutions in Europe

- state of play


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The need for broadcast

Operators concede that in the long-term 3G networks are not the mostefficient option for mass market mobile TV services

But there is and will continue to be a strong role for 3G in supportingmobile TV services

Important for interactivity, personalisation - the value add for mobile TV

Broadcast services come in fact as an evolution of the existing mobile TVservices offered in the unicast mode today

Getting a broadcast component is not absolutely critical in the short termfor the mobile operators, but it could become one around the end of the

decade

One operator told us that in its scenarios, it would have congestiontroubles in 2010 if a broadcast solution has not been implemented

Spectrum issues mean they must lobby hard nowwith showcase trials


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Overview of mobile broadcast solutions

Digital AudioBroadcasting

Digital VideoBroadcasting

CellularBroadcasting

SatelliteBroadcasting

MBMS

DMB-S

DVB-H

ISDB-T

DAB-TCommercially launched in Europe for digital radio services but mitigatedsuccess and fragmented situation between countries.

Adaptation of DVB-T for mobile devices.Trials in Europe, Singapore and the US.

Japanese standard for digital TV

Joint-project involving MBCO (Japan) and SKT (South Korea).Commercial launch in 2005. Also DMB-S project by Alcatel Space in Europe.Several satellite-specific issues: handsets, gap-filler for coverage in towns.

Broadcast/multicast in the UMTS network, standardised in UMTSRelease 6.

Others

Analog TV

Cellular phone with an analogue receiver launched in Korea in 2003.

Handset consumption and reception issues. Limited potential to extend.

DVB-TEuropean digital TV standard. Not designed for reception in movement butcould be suitable for stationary use on mobile devices.

DMB-T Technology developed in Korea based on DAB standard with additional errorcorrection. In 2005: commercial launch in Korea and first tests in Europe.

MediaFLO Qualcomms proprietary technology for mobile broadcast.


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Support for mobile broadcast solutions

in Europe

Europe DVB-H receives the most public support

Several high profile trials in different countries with reasonably

good results

Some commercial launches due where spectrum/regulation permits

(eg Finland, Italy, Germany)

But spectrum issues for DVB-H open a window of

opportunity for alternatives - DAB, DMB-T

First DMB-T trial announced in 2005 in Germany, involving

Samsung and T-Systems. Bouyges and Samsung also have plans

this year

mobile applications on DAB trialled in Germany and the UK, Virgin

Mobile to launch 2H 06

And then theres cellular broadcast

Orange to trial IP Wireless TDtv solution (based on MBMS)

We think other operators could be thinking similar -ie MBMS

Nokia

Samsung

more mixed than you might think


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Level 3Business models


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Mobile broadcast value chain structure

Contentcreation

Contentaggregation

Mobile broadcastservice provider

Transmissionover

the broadcastnetwork

Distributionservices &handsets

End-user

OSS/BSSBilling, CRM

infrastructure

Universal, Disney TV channels

Cable or satellite pay TV Independent service

providers

DVB: TDF, T-Systems,Crown Castle, Mediaset Satellite: MBCO

Vodafone, T-Mobile, etc.

operators outlets,independent retailers

Transport in thecellular network

GPRS, UMTS, SS7

Return path management

Service management(programs, packaging,

tariffs, ..)

Service platformoperation

Billing

CRM

DRM

Mobile application platformsMessaging, WAP browsing,

content download

Cellular network operators infrastructure

Which players will position on the role of provisioning mobile broadcast services?

Which business models can be implemented?

Who owns the mobile broadcast service customer?


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Main challenges of setting up a mobile

broadcast business case

Finance the costs of deploying a new infrastructure, which requires a

rather dense network of transmitters

Distribution of service offering and provisioning of handsets

Billing, revenue collection (if services are not free)

Set-up industry partnerships to share the usage of a single mobilebroadcast network and ensure collaboration of broadcast and cellular

networks

Provisioning of high-quality content

Several business models are possible...


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Business model options - operator leads Combined offering between mobile

operators and broadcasters -operators have the lead Operators manage the end-to-end

relationship with customers Operators take care of billing, CRM,

distribution and marketing of themobile broadcast offering

They need to buy content frombroadcasters or DVB-H channel

aggregators An integrated service offering on

broadcast and cellular network canbe implemented by mobile operatorsin this scenario

Mobile operator

Customer

Content providers

Broadcast networkoperator

Content flow (broadcast)

Revenue flow

Content flow (interactive)

Broadcasters /

aggregators

Mobile broadcast

service provider

Orange, Vodafone, 3 UK


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3 Italy- an extreme case

3 Italy bought an Italian TVchannel, Canale 7, in November

2005. in order to acquire a DVB-H

license

220m investment planned in

DVB-H service development

Deal with Mediaset to get DVB-H

rights for football (Champions

League and Serie A)

Commercial DVB-H services

expected in H2 2006.

3 wants to control the DVB-Hnetwork and the service offering

It will seek differentiation against

other operators, which dont havea DVB-H license

Great financial challenge if 3

builds and operates the DVB-H

infrastructure on its own (withoutcapacity sharing)


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Wholesale variation

Makes sense

Reduces costs and risks

Reduces time to market

Sensible in markets where spectrum is limited

Removes some of the complexity of handling multiple

content and back office relationships

Eg MediaFLO, Crown Castle, Mediaset, BT Moveo

But its not for everyone...


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BT Movio is a turnkey mobile broadcast TV and radio service formobile operators and MVNOs

Supplied by BT Wholesale, based on DAB and in partnership with UKbroadcaster Arqiva (ex NTL). BT leases capacity from Digital One andrepackages it

The business model is revenue share

Operators bill customers

It comprises an infrastructure and content package, including:

aggregated content a range of broadcast radio and TV channels

digital rights management

encryption BT Movio distributes the keys to end users so they canunlock the content theyve paid for

scheduling BT Movio provides an electronic programme guide

interactive element

wholesale proposition


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Mediaset, Italy

Mediaset has a DVB-H licenseand will deploy a DVB-H network.

It will resell capacity to operatorson a non-exclusivity basis, andwill provide TV content.

It will use TIM's assets for theDVB-H network deployment,

including cell sites reuse.

Has a deal with TIM to launch a

DVB-H service in summer 2006

5-year agreement, by which TIMwill pay Mediaset an annual feeof 50 million to get the right tosell a Mediaset TV bouquet.

TIM will:

distribute dual-mode

UMTS/DVB-H handsets

sell a mobile TV service co-branded Mediaset-TIM

market the service

ensure the billing

TIM wants to integrate the DVB-H offering into its existing mobile

TV offering


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Business model options -broadcaster leads Combined offering between mobile

operators and broadcasters -broadcasters have the lead

Broadcasters manage the end-to-end relationship with the customers

Broadcasters determine the serviceoffering (packaging, tariffs, etc.) andreceive fees from customers

Operators role is very limited,possibly only to provide support forinteractive services. Possibly also

for co-promotion, but handsetsubsidisation unlikely

In this scenario, there is nointegration of the service offeringbetween broadcast services andcellular services

Mobile operator

Customer

Content providers



Revenue flow


Broadcasters

Advertisingrevenues


Any takers?


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Business model options - a consortium A consortium runs the mobile

broadcast services offering

Mobile operator

Customer

Content providers



Revenue flow


Consortium /independent

service provider

Broadcasters

A third-party is set-up to by industry

players to manage the service

it deals with broadcasters and contentproviders to source content

it collects revenues through the cellularnetwork and distributes them between thedifferent parties involved

it manages the whole service provisioning

Customer ownership and service brandingcan still be controlled by mobile operatorsin this scenario


TU Media (S Korea),German operators?


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Level 3Orange France case study


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Orange World Video portal

Image-based navigation

51 live TV programs

1 mobile-only channel

3,000 video clips available ;

500 new clips every week

Updates 4 times a day

Exclusive high-profile

partnerships (French

football League, Roland

Garros, Star Wars,Madonna)

Access to videoclips (highlights)

Access to live

TV channels

Video searchtool

Weather forecasts

Real-TV program(broadcast on the numberone French TV channel)

News clip

Film

Actors interview

News, Sport, Cinema,Music, Humour, People,

Cartoon, Live Cam, Erotic

Access to videoclips (by topic)

Orange France

Service offering overview

9 thematics


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Orange France

51 live TV channels available in Dec. 2005

April 2004 December 2004 February 2005 April/May 2005 June 9, 2005

3G LaunchOrangeTowns

channels channels channels channels


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LCI Mobile: live channel specific to mobile News mobile TV channel

launched in May 2005

Developed by LCI, a news TVchannel

Programs shot in two versions,

for the TV (3 min topics) and forthe mobile channel (1min, 45

topics)

Same topics broadcast roughly at

the same time, but with differentcontent

One of the most popular

channels on Orange World Video


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Mobile TV tariffs

Orange World data bundles drive the usage of mobile TV

An average 3G user consumes 40 MB/month

Pay-per-kilobyte remains very expensive

0.00488/KB (4.88/MB) for the standard postpaid subscription 0.015/KB (15/MB) for the prepaid users

Premium charges only for adult and some sport content

Possible evolution towards unlimited mobile TV/video bundles

Multimedia

bundle size*

10 MB 25 MB 60 MB 150 MB

Tariff

(/month)

6 10 20 30

* Watching 1 hour of mobile TV is roughly equivalent to 25 MB


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Orange France - platform overview Orange controls the service offering and delivery

Few selected content partners

Orange defines specifications for the video produced (length, etc.) Orange pays up-front fees and some audience-based fees

Content aggregationAVMS

(audio video

management system)

AVDP(audio video

delivery platform)

Contentproviders

SporeverLCI

Wonder-PhoneMCM

Allo Cin...

Securedcontentdelivery

interfaces

Digitisation

Encoding

3GPP/MP4

ContentManagement

Temporarystorage

Streaming&download

server

BillingWH-A

Multi-devicecontent

publication Network

(GPRS,EDGE,

UMTS)

ORANGE


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Level 3Thank-you!

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mobiletv market anylisis