There were contrasting case studies on display for Mobile TV at the Mobile Broadcast Forum in Amsterdam last week, from the controlled and successful three year old operation at 3 Italia to the rushed deployment at Mobilkom in Austria and something in between at KPN in the Netherlands.
Interestingly Mobile TV has gone from being a big ARPU hope, to the forgotten technology in Europe, and where once many operators were playing their cards close to their chest, not wanting to let ‘magic’ secrets out of the bag, this gathering had the combined experience of Europe in Mobile TV, all sharing best practise looking for any trick to speed up the way forward.
We first heard that Vodafone more or less doesn’t believe in broadcast mobile TV, and that Orange cannot see it happening in France until 2010 (see separate pieces) but the rest of Europe is still ‘trying to get it right,’ and sticking with DVB-H which they are familiar with from trials.
The experiences of Gert Bradl, system engineer at Mobilkom were a lesson, with the operator pushing the buttons to go live with a DVB-H offering with just two week’s notice in time for the European Soccer Championships. Okay the network had already been built, but this was still a case of fixing the service post launch, and is a cynical and jaded tale of how not to go about the business of Mobile TV
‘Some content companies wanted money up front, some didn’t, handset makers refused to give us affordable handsets, which were mostly not good, and which needed integration after the service had been launched,’ said Bradl. ‘Samsung cancelled its commitment to deliver a handset before the launch, Nokia delivered the N77 which was very old and the N96 which was very expensive.’ The hit delivery seemed to be the Red Bull ZTE RBM1 device which came from Red Bull offering an MVNO on the Mobilkom network now known as A1, and a Vodafone partner.
‘The DVB-H network reach just 50% of the population. We cannot make money on the DVB-H service,’ said Bradl, ‘We see this as catching customers on DVB-H and earning money out of them on unicast streaming services.’ Which is why the DVB-H network is 15 TV channels and 5 radio channels, but the A1 offering is 25 channels and 5 radio, with 10 channels in unicast, all for €9 a month.
This was quite interesting because it took some help from Ericsson so that Mobilkom could create a single player for the two services, and then it had to mount the DVB-H channels on the streaming services as well, so that when customers went outside the DVB-H area it could drop back to unicast. However that was supposed to be a graceful degradation, which Bradl said, would be achieved by Christmas ‘Christmas 2009.’
By comparison Franklin Selgert of KPN has developed an entirely different strategy, one that provokes optimism rather than incredulity. ‘We had a pilot in 3GPP streaming and the viewing quality was not good and subtitles were unreadable (the Dutch watch a lot of subtitle video). On average it took 6 clicks to change channel, and customers had to re-start TV after a call. We trialled it with 3,600 people and just decided not to go ahead and to do DVB-H instead.’
The network build targets were to reach 85% of the population outside, and 65% of the population in-building and KPN launched on the back of LG and Samsung devices and have since added the Nokia N96. ‘The N96 is selling very well,’ said Selgert. The KPN offer is 13 TV channels and the most popular bundle is where a DVB-H phone is free and the service is free if you sign up on 24 month contract and spend more than €27.50 a month. The basic offer for pre pay is €9.95 for 10 channels. The best outcome is that 20% of new post paid clients were new subscribers, which appear to have joined KPN for the TV, even though other cellular operators are welcomed to join in with DVB-H offering.
The advertising campaign that launched it involved putting up posters of an EPG on the metro which looked like the metro timetable, and as a result there have been 45,000 sign ups as of about a month and a half ago. KPN also sells premium channels for extra payments and after 2 weeks 30% of sign ups had taken at least one extra channel. Although the uptake is 75% plus male, one early adopter group KPN identified were bored mothers waiting for small children at clubs and sporting activities like swimming.
What everyone had come to hear perhaps was the experiences of 3 Italia which at last count in June had 850,000 mobile TV subscribers on DVB-H. It was fairly obvious why 3 Italia launched the service. ‘When we took the decision it was 2004 and Sky Italia was growing and DTT was growing, there was 75% growth in new TV services,’ said Marco Maestri, Mobile TV solutions director at H3G in Italy.
‘We had a €30 ARPU and 30% of ARPU was non-voice and we had 20% of the data revenues from a streaming TV service despite incredibly high pricing.
‘One day on the streaming service could cost €300. So we took one year to secure the spectrum license, and we identified it and bought it by November 2005,’ said Maestri.
‘The more of the value chain you do yourself, the more risk you take, but the more flexibility you have,’ he said, which is perhaps why 3 Italia chose to take on almost all the risk, buying the spectrum, the network and creating some of its own content.’
It was that flexibility that allowed 3 Italia to squeeze more bandwidth into the 5 soccer channels that it runs, when there are live games, and tune the head end and the TV schedule so that no other high action shows are on, and they can survive in video quality terms on less bandwidth.
Which is perhaps why DVB-H customers spend 60% more on data revenues than those who use UMTS only. The channels that 3 Italia created began around what it calls a ‘barker’ channel, La3 Live, a free channel about what’s on the other paid channels. It produced this for an incredibly low cost with stationary cameras and one person in a small studio. It did the same for sport and in La3 Sport it has a channel with 93% satisfaction, and 82% for its ‘barker’ channel.
‘We sell sport, sex and songs,’ said Maestri, ‘although the songs are not doing quite as well as they should,’ he added, and contradicting the keynote speaker from Vodafone, he said, ‘Movies and cartoons have good staying time,’ after Vodafone had revealed its lack of understanding of Mobile TV by asking ‘Would anyone ever watch a movie on a screen that small? I don’t think so.’
Maestri then laid out his company’s charging mechanisms, mostly 3 bundles which offer TV and 3’s X series internet services, plus a certain amount of talk time for €29, €49 and €79. 3 Italia now operates 6 free channels on DVB-H, plus 5 football channels a combined channel from 3 Mediaset channels, the leading broadcaster in Italy, and some Sky channels.
But even with 850,000 customers and rising 3 Italia still thinks it is not profitable. However since it launched the service is has moved from 6.8 million customers to 8.45 million, and many of those will have moved purely for the TV service and the subsidized DVB-H handset.