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Mobilizing the Business and Business of Mobile

Is Mobile TV in trouble?

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Mobile TV is being hyped and pushed agressively by the US operators. Both Verizon and AT&T use the Qualcomm MediaFLO technology to show Mobile TV on phones. According to this estimate last year, MediaFLO will need about 3.17 million subscribers to break-even on their operations costs. This does not include the $800 million it spent on setting up its network. This time last year, MediaFLO had 300,000 subscribers which bring in about $90 million in revenue per quarter. As you can see, MediaFLO and its partners need to build up their subscriber-base to recoup their investments. While the numbers are not available yet on the subscriber base, but it is clear that MediaFLO needs to develop its business model to make money. 

However, this post is not about one company. Last week, Korea Times reported on the Mobile TV numbers in Korea and they are not pretty. Korea uses the DMB standard which include terrestrial and satellite and there were 13.9 million DMB-enabled devices sold by June 2008 compared to 9 million devices by December 2007.  Of these 13.9 million devices, 48% were mobile phones, 37.8% were car navigation and other DMB-enabled terminals used in vehicles, 9.4% were portable media players,  USB devices at 3.8 percent and laptops at 0.9%. Of the mobile phones, 6 million handsets use T-DMB while another 1.31 handsets use the S-DMB standard provided by a SK Telecom subsidiary.

While this is encouraging, when you look at the subscriber numbers, it is not such a pretty picture. According to a survey conducted by TNS Media, a local research firm, only view rating was only 1.172 percent, peaking at 3.585 percent during the commuting hours of 6 to 7 p.m. Also, the majority of the audience were males in their 50s, not the tech-savvy youngsters or the rich 30- and 40-somethings. It is clear that users view this service as a ” brief way to relieve boredom on a long subway ride.”

In addition, lack of effectiveness metrics for mobile advertisements is making advertisers wary of spending money on it. It is no wonder, that the advertisement based model is not working in Korea.

Subscription or pay-per-view services are not faring any better either. According to Mobile Burn, Toshiba-owned Mobile Broadcasting Corporation in Japan is shutting down by March 2009 due to increasing pressure from free services. Similarly, in Germany, the DVB-H licensee Mobile 3 is struggling after operators who lost the licensing auction choose to go with the DVB-T standard.

As you can see, Mobile TV is clearly struggling world over (with the exception of Japan maybe). Both the business models, advertisement-based and pay-services have their drawbacks. So, what do you think? Is Mobile TV dead?

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Written by dvdand

August 10, 2008 at 6:30 pm

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