The announcement of a report lands on our desk this morning saying that Mobile TV services will generate over $10 billion in revenues in 2013. Having tried to quantify the financial opportunity over the past three years we can see that this is a reasonable number, but quite clearly it’s not a dent in the revenues of the total global cellular market.
The report is from Informa Telecoms & Media and it says that revenues are currently $1.5 billion from Mobile TV services, which will, for this year made up predominantly from subscription fees. This will shift in the run up to 2013 to a position where advertising makes up 50% of revenues.
What’s confusing about this report is that it attempts to quantify the total revenue associated with both streaming video over the cellular link and broadcasting, and it highlights a growing problem which is how to quantify that revenue. Many video services are free, supplied entirely to simulate paid data usage, some require subscriptions, others are parts of bundles where it is deliberately opaque to users (and therefore research firms) how much of the bundle is applied to pay for mobile video. The same can be said of broadcast mobile TV services ‘ which are increasingly bundled in many creative ways. Internally at the operators, they will have an idea ‘ but not much more than that ‘ of how much revenue they should associate with video, but once again, where they achieve lower churn figures for implementing a mobile TV strategy, or suffer higher churn figures because they fail to ‘ the amount of money that this generates or loses will not be quantified. All of which says that it’s tough to the level of pointlessness to do financial projections.
What Informa has done is take the next two years and write them off, saying that during that time growth is anticipated in the pioneering markets of South Korea and Japan before the rest of the world starts to catch up around 2010/2011 and the report talks about isolated success stories in places like Italy and Austria.
In 2006 next year (2007) was going to be mobile TV year in Europe. Then in 2007 it shifted to become 2008, now Informa says that it is not expected to see rapid growth in Mobile TV in Europe until 2009. We don’t blame them for that, it’s just that it becomes increasingly difficult to pick when Mobile TV will happen, if at all, when you have things like a sudden recession to cope with, and a slowing of mobile handset growth.
The report says that the US will take even longer to sort out its strategy. Well that’s a bit of a cop out, since we know that ATSC M/H, at least three satellite efforts (Sirius, EchoStar and ICO) plus the incumbent MediaFLO service at Verizon and AT&T – PLUS three strong streaming services (Verizon, AT&T an Sprint) will all be in operation during 2009, not to mention ClearWire’s WiMAX streaming video services.
At least the report agrees with us that eventually there will be momentum behind ATSC-M/H to dominate the US. But apart from that, and the obvious point that starting out with a free-to-air service with minimal investment is a good way to stimulate the market, this report simply says ‘ ‘Err Mobile TV market stalls for two years then sorts itself out. We think’
The acceleration in China, the emergence of DVB-T receivers in handsets in Europe and the fact that Brazil is just about starting to shift ISDB-T devices, and that MediaFLO will unveil a new content format by February 2009, plus at least another 5 countries will aggressively embrace DVB-H means that Informa is probably right this time, 2009 WILL be the year when it all takes off. Or did they say 2010?