There’s something that we’ve been saying for a while in private which we have never said in Faultline, about how to launch a mobile TV service, and that’s to take a leaf out of Apple’s book and launch it ‘despite’ what everyone else says, and drive it hard.
What we mean by this is that it’s no use, as they have tried in France and are planning to do in many other countries, trying to get lots of competing operators to 1) Pay for the build out of the service and 2) Share it with all their rivals.
You either have to get a broadcaster to pay for the service, subsidizing it with all of the natural advantages that a company which has lots of antenna masts has, or you do it exclusively with a single operator for at least a two year period.
Orange, SFR and Bouygues are hardly going to put their hands into their pockets to stump up a major part of the estimated $300 million that it might take to build a DVB-H network in France (depending upon what percentage of the population it reaches), if it brings them no differentiation.
Apple showed us with the iPhone that by giving one operator the lead, it can turn anything, applications, music, video or TV, into a major competitive advantage, which drives up customer acquisition and hurt rivals. Now that’s worth doing to a rival.
In Italy 3 Italia claims that it has almost 1 million DVB-H customers while its rivals have a DVB-H network with virtually no customers. It has done this beginning at a time when it had 6.8 million phone users in Italy, and has grown to over 8 million since. Sure the TV service may not be profitable, but it’s certainly helped change the prospects for the fledgling operator.
French transmitter company TDF has said last week that it would bear the financial costs of reaching 17% of the French population, but then it wants to offer the services to ALL of the local operators. Better to offer it to ONE of the operators, preferably SFR, on an exclusive basis, because then it would have a differentiator over Orange. Two years on Orange would take it, as exclusivity expired, same as the iPhone. Actually France is a bad example because the iPHone exclusive was crushed there under French law, but you get our meaning.
At the very least the bouquets offered to each cellco should be very different, with one having the best sports deal, and perhaps another with the best drama or news.