Business Model for Broadcast Mobile TV

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Anke GillVice President of Marketing, BNS Ltd

June 2008

The Business Model for Broadcast Mobile TV

The Business Model The Business Model The Business Model for Broadcast Mobile TV for Broadcast Mobile TV for Broadcast Mobile TV


Before we start…

“How does this thing

work..??”David Rice, Master of

teleportation in “Jumper”, 2008 (Fox)


What has this to do with Mobile TV?

Plenty.People are irrational, loss-averse and effort-averse so Mobile TV operators need to figure out how to transform the young David into the adult David

as fast as possible


The Mobile TV technology landscape so far…

• Broadcast Mobile TV: – Truly ‘broadcast’, the same signal is broadcast across a large

area regardless of whether anyone is watching, similar to watching TV, thus inexpensive to scale to large audiences

• Cellular Mobile TV:– Cellular service, just like voice – Streaming approach - similar to watching a movie clip on the

Internet (buffering issues)– Direct relationship between the number of people watching

and the bandwidth of the mobile phone networks’ streaming servers means expensive to scale to large audiences

Traditionally, Mobile TV is the broadcast of live TV to an adapted mobile phone handset (Broadcast Mobile TV) or the streaming of an on-demand programme to a 3G phone (Cellular Mobile TV).


Source: eMarketer

Some statistics..

•Total mobile TV revenueacross cellular and broadcasting platforms will jump from US$1.9 billion in 2007 to $25 billion by 2010. Source: Gartner

•Mobile broadcast TV subscribers will total 155.6 million worldwide by the end of 2012, up from 4.4 million in June 2007 Source: Datamonitor

• The Asia-Pacific region is set to have the highest number of mobile subscribers, followed by Europe and North America Source: Datamonitor

• People today consume 70.6 hours of media a week, but only 23% of that content via a traditional television device. Source: IDC

• 3 out of 10 adults now watch TV content on alternative devices such as the mobile phone, PDA or PC. Source: Accenture


But will customers want it?

• Complementary to traditional TV• Mobile TV combines two features:

1. TV on the go, offering familiar content2. multimedia functions with features such as radio, music

player, camera and video recorder for a personal viewing experience

• Why people will use Mobile TV– Flexibility and Independence– Enhanced personal viewing experience– Obtaining time and location-dependent information– Filling idle time – People in Asia commute more often and

longer than anywhere else in the world


…and is it happening?

• Europe– Slow uptake as operators charge premium, keen to recoup 3G

licence money– Regulation restrictive, not supportive

• USA– Steady growth with all major players launching broadcast

Mobile TV services (mainly MediaFLO)• Asia

– Embraced free TV service model early / built up subscriber base fast

– Fastest growing mobile TV markets are Japan, China and Korea

• Over 25 million TV-enable handsets sold in Japan last year• In December, half of all mobiles shipped in Japan were TV-enabled

– Strong regulatory support• in Japan and Korea the governments mandated that mobile operators

had to support free-to-air TV services.• Chinese government actively supporting Mobile TV in lead up to

Olympics


Broadcast Mobile TV Technologies Overview

• LG's "Mobile-Pedestrian-Handheld" and Samsung's "Advanced VSB“ recommended as general standard by Open Mobile Video Coalition

• CMMB (China Mobile Multimedia Broadcasting)

• DAB-IP (Digital audio broadcasting transmits Mobile TV via Internet protocol)

• DMB (Digital Multimedia Broadcasting)

• DVB-H + DVB-SH (Digital Video Broadcasting –Handhelds and Satellite to Handhelds; endorsed by EU)

• ISDB (Integrated Services Digital Broadcasting)

• MediaFLO

But the real issue is not technology,

but the cost to the user


Factors impacting Broadcast Mobile TV• Spectrum Competition

– Traditional broadcasters vs telcos– Regulatory obstacles and support issues

• Content rights issues– Media rights holders wary

• Commercial terms between handset manufacturers, software companies, content creators and network owners unclear

• Standardisation attempts– Multiple broadcast Mobile TV standards helpful, not

hindrance to industry growth– Market will decide technology most appropriate for

individual deployments• High-performance single-chip mobile TV solutions

providing free terrestrial TV


Enter the Single Chip Wild Card

• Single-chip Mobile TVreceivers enabling free-to air TV in cellular phones and other portable media devices

• No network built required

• High potential to be disruptive in markets with low cable/pay TV penetration

• Telegent is one of the pioneers in this area

Potential of FTA Mobile TVBy Country


For example: China

• Relatively low pay TV penetration – terrestrial channels rule

• More than three million users of free-to-air mobile TV

• 74% of survey respondents to Telegent survey watching television on their handset for thirty minutes or more at a time, and 54% watching five times a week.

• For 85% the primary influence driving their handset purchase decision was the built-in free-to-air TV feature

Source: TelegentTelegent interviewed more than 400 consumers who purchased Telegent-enabled handsets, half of which were interviewed in February 2008, and the other half of which were interviewed between July and September of 2007.


Potential issues with the Next Gen Single Chip Model

• Grey area for content licensing– What happens to existing licensing deals?– Does free to air TV include re-carriage on mobile

phones?– Which regulatory body will regulate?

• Moving up the value chain– Solely a customer retention feature, no ARPU gains– Operator still have to build out either 3G or broadcast

Mobile TV network if they want to expand the service, introduce own channels, advertising etc.


Towards a successfulBusiness ModelPHASE 1•Make it free: start with a basic free TV and audio channel offer as part of handset package to drive initial consumer adoption•It’s TV: keep it simple and easy to start

–Simple navigation to replicate the familiar TV viewing experience

–Interactivity of lesser importance for Mobile TV initially

•Educate customers about merits and value of the service

PHASE 2• Add premium content gradually (mobile commerce,

gambling, etc.)• Adopt advertising funded vs paid for service • Open new revenue streams through affiliations such as

concert tickets, merchandise• Make it unique and create a memorable, easy to use

and ultimately ‘sticky’ service


Conclusion: Creating the Tipping Point

• Free to air content to start with

• Fool-proof choices: opt out, instead of opt in

• Wide handset variety

• Handset capability (resolution, battery life)

• Connectivity

• Content variety

• Ease of access and navigation

…. give customers a nudge


The leading IPTV content and technology provider in the Asia-Pacific region

BNS Ltd


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www.bnsltd.com

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Business Model for Broadcast Mobile TV

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