Mobile TV: Where’s the money?

Ovum has released its latest research round-up on mobile TV. Key issues under the spotlight are the role of advertising in mobile TV and the cost implications of deploying a DVB-H mobile broadcast network.

Mobile TV is seen as having good potential because it is a service that should have mass appeal across the whole customer base, unlike many other content services such as games, which only appeal to around 20% of users. And there are some promising (if not spectacular) results from commercial mobile TV services:

But Ovum counsels caution. Although consumers say in trials that they are willing to pay for services, Ovum sees this more as a perception that there’s some value in mobile TV rather than hard proof that they will pay up in a commercial setting. “How much users are willing to pay is a make or break question,” says Eden Zoller, Principal Analyst with Ovum’s Consumer Practice. “If the answer is not much or nothing, then service providers will need to consider advertising-supported models.

“Mobile TV is an attractive medium in terms of the targeting opportunities and reaching audiences that have fallen away from traditional TV. The flip side is that audiences – and precious impressions – are still small and impossible to guarantee.”

In a business case analysis for the deployment of a DVB-H mobile broadcast network in the preferred UHF spectrum, Ovum estimates that the cost of deployment in the UK would be £140m.

To achieve a return on investment in around three years, a mobile broadcast service provider in the UK would need to ramp up a customer base of 1.7m subscribers, each generating revenues of £10 per month.

“This once again underscores the importance of revenues beyond premium content, namely from advertising and value-added services such as interactive applications,” concludes Zoller.