MobiTV may have used the National Association of Broadcasters show in Las Vegas this week merely to launch a business model for mobile TV, but if it has the formula right it could become an overnight catalyst for the nascent technology to take off in the US. And if it takes off as fast as it did in Japan, then pretty soon it could be bigger than the iPhone.
The business model is simply called MixTV, a combination of free to air TV services over (among other things) ATSC M/H, the new US mobile handheld broadcast standard, and its existing streaming service. However its demonstration was over WiMAX and streaming, which may make its software just as legitimate for ClearWire and others and for other mobile TV protocols around the world.
MobiTV has been faced for a long time with the problem of how to fully embrace free to air mobile broadcast TV in the US, while at the same time protecting its 6 million and rising, paying customer base for cellular streaming TV services – and it has a plan ‘ that old favourite, catch up TV.
The idea is that if people want to watch TV programs, live as they broadcast, then that’s fine and it’s free, but if they want to watch any program that has already broadcast then they must buy a subscription. It’s a sort of nPVR approach and can be dropped into most local broadcast strategies by facilitating a relationship between local broadcasters and the cellular streaming services. It will take some work, but not much, if both parties are willing.
The interesting thing is that it has been laid as a tempter by MobiTV to operators, it is like an open invite which says, ‘You asked about a business model for broadcast TV, well here it is,’ in almost direct response to statements about ATSC M/H that AT&T was putting its name to earlier in the year. AT&T said it had some interest but a better model was needed. It is this extra subscription bait that may prove tempting enough to bring one of the majors to the table, especially if you add it to the advertising revenues which are already there.
And by providing the tools, ready made, to make it work, suddenly MobiTV is putting itself into the role of ‘kingmaker’ to the ATSC technology.
There are two really big worries about ATSC M/H, and when we get over one, we will be over the other, as well as all the smaller hurdles. There are no handsets, at least not in volume and at least not on attractive, established devices (LG says it will bring the Viewty and Lotus to market with ATSC M/H soon). And there won’t be until a number of things happen. Chips need to become available, which will arrive in June says LG (see separate piece), but also when the other major worry is overcome ‘ the major US operators already appear to have a long standing arrangement with Qualcomm’s MediaFLO to sell mobile broadcast TV subscriptions and so far they have done very little about it. Will they embrace ATSC at all? Or try to stick their heads in the sand and stick with MediaFLO?
If any one of AT&T Mobility, Verizon Wireless and Sprint Nextel embraces mobile broadcast TV using ATSC M/H, then they will all be forced to embrace it and then the handset issue evaporates overnight. Everyone would then produce handsets, for ATSC mobile, and not only handsets. LG and Samsung and even Motorola, will produce handsets in the hope that the handset vendors can get business with AT&T, but also non-handsets will emerge purely because once the eco-system gets off the ground portable media players can also work with the new US mobile TV system and the risk of the services failing will have gone. While ATSC M/H is a market that is likely to be limited to the US and perhaps Mexico, the eventual penetration has the potential, at least, to be like Japan, where it is rapidly approaching, four years from launch, 50% penetration. In the US that is a figure of something like 150 million, and there’s room in there for quite a few devices which are not handsets. In fact you could squeeze a market into there which is bigger than the iPod and iPhone put together (so far).
But the problem for a long time has been how to overcome the first of these issues and it’s a chicken and egg situation. Why would AT&T embrace the ATSC environment unless there are adequate handsets, and why would anyone make a cheap ATSC handset until AT&T has embraced it.
Let’s rephrase that question. In a mobile market which has about two years left of absolute growth before it is semi-saturated and everyone has a phone, how do you create a business model that brings Mobile TV to the top of the agenda ‘ ahead of GPS, touch screen, mobile games and HSDPA/EV-DO ‘ as the main reason for switching handsets?
There were always a number of ways of breaking this deadlock. First, one of the smaller operators could take first mover advantage and subsidize handsets which receive ATSC M/H signals simply because it MAY steal customers away from AT&T or Verizon. There is a lot of incentive to do this, because these smaller operators do NOT have MediaFLO and need something to combat it.
But if that was to happen, it’s a pretty sure bet that the big three would immediately launch against the upstart, be it Leap or Virgin or MetroPCS or even T-Mobile. So a regional carrier might go to a lot of trouble to take on regional TV on its phones, but then find that all it has done is create some demand for ATSC handsets, drive down the device prices and make AT&T’s ATSC entry assured.
Another way to break the deadlock is to produce a handset dongle, a device which makes existing top end phones, and let’s face it the one to target is the iPhone, and delivers to them the ATSC M/H signal in something they could digest, like Wi-Fi.
This has been done for Apple iPhone’s in Japan using chips from mobile TV market leader Siano. Effectively it takes the local TV signal, something called ISDB-T in and outputs streaming video over wi-fi.
Siano Mobile Silicon took the lead in the mobile TV market last year after its decision to focus on China paid off, but also because early on, it gambled on a chip with multiple protocols on it. If it was to enable ATSC M/H reception on one of its existing chips or a variant of it, then it already has volume manufacturing of mobile TV chips in the millions and can adapt them to the US market. Producing this as a discrete add on for an iPhone is a no brainer ‘ the Apple device is perfect for mobile TV, even if Apple doesn’t want to encourage it.
Already at the NAB show both Hulu and MobiTV have produced iPhone applications which will run streaming cellular video over both wi-fi and 3G services, but the ATSC M/H signal is likely to be of far higher quality and use far less broadband capacity (none), so an iPhone dongle is a certainty, and yet none have been launched and NAB was the place to launch it (there are a few days left so who knows). Neither Hulu or MobiTV are in that line of business so we will have to wait for this to emerge. A handset dongle is an extra thing to carry around in your pocket, but one could be produced for $25, cost $50 and deliver perfect TV signals.
If that hasn’t come, then in January at CES we saw handsets and PC dongles on display as well as devices which will take an ATSC signal in a car TV set. All these are poised, with no price, ready for launch, as the market waits for the first chip to come in volume from LG (it invented the standard and it is almost obligatory that LG and rival Samsung will attack this market first).
However Dell has done a deal with Siano, back in January for its Inspiron laptops to enable global mobile TV in as many countries as possible, taking in Europe in the first quarter (DVB-T), and promised it in the US (ATSC M/H and MediaFLO) and Asia-Pacific (ISDB-T and T-DMB) and China (CMMB) later in the year. For later in the year, read now and why would Siano not embrace the ATSC M/H standard since it has all of the other standards covered. The job is a little trickier, because all of the other standards use some form of OFDM modulation, and ATSC is different. But the chances are that when someone takes apart the dongle on a Dell Inspiron Mini 10 Netbook launched this week at the show, which can view ATSC M/H signals, they will either find some kind of component from Siano facilitating this or early versions of the announced LG chipset. Dell’s existing prices in other countries such as Japan are around $50 for such a device.
But mobile TV CANNOT take off purely on a PC or Netbook because even Netbooks have the battery capacity to receive full ATSC signals directly and then the M/H variant would be wasted. The Netbook can be part of the shift to mobile TV, but it will not break the deadlock we discussed above, not on its own.
So we are inclined to believe that neither the availability of PC dongles nor the arrival of smaller operators using ATSC M/H handsets are enough, on their own to break the deadlock and open the floodgates on ATSC M/H adoption by the major MNOs.
Which is why we have been looking for some form of ‘kingmaker’ someone who has the influence, the know-how and the incentive to come up with a way for mobile TV to become attractive to the big three in the US ‘ and MobiTV’s MixTV may be just what’s required.
Our own personal favourite had always been Qualcomm and MediaFLO, but although this company has wrestled the title of biggest chipmaker to the mobile industry away from Texas Instruments in the past few years, it can still make mistakes and it is sitting on the fence right now and instead of wondering how it can merge MediaFLO with ATSC M/H into a single business model and into single handsets ‘ putting paid and free TV side by side, it has been believing that it has the ear and customer relationship at AT&T and Verizon and that no-one can take that away. The last thing a MediaFLO representative said to us about ATSC M/H was that they ‘watched it with interest.’
The problem is that in a single blow MobiTV has made MediaFLO irrelevant. Although it is not as influential as Qualcomm with these giants, it is entrenched in video strategy and already has the confidence of both Sprint and AT&T in bringing streamed paid mobile TV to their cellular platforms, and Verizon’s VCAST Video is arranged to be a direct rival to MobiTV. Now that it has put both a paid proposition (the one on catch up TV which has proven to work elsewhere in the world) and a free proposition together on the same piece of software, the MediaFLO deal could become an unnecessary encumbrance.
And the pressure will be rising within AT&T and co, to open up to ATSC. Back in January the Open Mobile Video Coalition, the collection of broadcasters backing ATSC M/H, said that the 63 stations in 22 markets, had backed the technology. At NAB that has risen to 70 stations in 28 markets. The progress is slow, but fairly irresistible and it won’t be long before one of the majors is tempted, now that there is a deal whereby ARPU increases can be addressed.
Research in Europe has shown that where there are both free and paid mobile TV on offer, with subsidized handsets, the uptake is extremely rapid and the buy-in rate to paid services is above 30% among early adopters. That might clinch it for US mobile TV.
But that’s not all that MobiTV has to offer here. It is also saying that MixTV comes with advertising. In most of the mobile TV efforts around the world, including Japan and Korea where it is most popular, advertising has been an afterthought, and it started out with mobile TV programs simply carrying the same advertising that was on the existing TV channel. But in the US, the global capital of advertising, that would be a big mistake and so MobiTV has made it possible to insert fresh advertising into the local broadcast, and also into the MixTV catch up TV as it shows.
Nowhere else in the world has that happened, and the completeness of its vision means it has caught up with other software proponents of Mobile TV around the world (this has been offered elsewhere by key vendors but not yet been taken up) and this puts it streets ahead of the curve in the US.
MobiTV said it would partner Sinclair Broadcasting and PBS to prove MixTV, combining free Mobile DTV content with a subscription based 7-day window of on-demand programming which also supports interactivity, audience measurement and dynamic ad insertion via mobile broadcast, over existing wireless networks.
At the Mobile World Congress in Barcelona this year MobiTV CTO Kay Johansson told us ‘People talk (in mobile TV) about bypassing the carrier, but interactivity is a key element of mobile TV, which is why I believe that ATSC M/H cannot bypass the carrier. We can already make it so that local information can be added to a broadcast advert, this can plant links to local dealers for instance, which can be reached using the cellular back channel. This will allow a local element to a national advertising program. But if the wireless carriers don’t want to put this into devices, then it can’t happen.’
There has been an idea circulating US mobile markets that ATSC M/H cannot be used for paid TV services because the spectrum has been given to those companies on the basis that they bring free TV to the world, supported by advertising. Both the catch up element and the localization and interactivity of advertising goes a long way to improve the monetization of what may HAVE to be a free signal.
MobiTV already aggregates content from CBS, NBC, ABC and the Disney Channel, and has surpassed six million paying cellular streamed subscribers earlier this year.
Meanwhile MobiTV also demonstrated at the show a new form of television audience measurement using the same interactive technology to track audience size and demographics in real time.
Cedric Fernandes, Vice President of Technology, MobiTV said ‘In the past, traditional television audience measurement was accomplished through statistical analysis only. This solution offers broadcasters and advertisers the ‘brass-ring’ to allow for highly targeted shows with highly targeted advertisements.’
Nielsen and Rentrak will each demonstrate audience measurement solutions for tracking viewing on MobiTV enabled devices at the show, so MobiTV doesn’t seem to be about to cut Nielsen out of the loop on this, and it is likely that in a very short space of time there could be highly believable audience statistics for mobile TV in the US, to drive advertising adoption.