Mobile television and clip-based video content clearly represent an emerging opportunity for mobile network operators, traditional production houses, online portals and community sites like YouTube/Google, advertising firms, and other wireless supply chain companies. However, new IDC research suggests this market faces several hurdles that seem to get lost in the glitz and glam and bright lights of Hollywood and beyond.
APAC leads the way
Asia-Pacific clearly leads the world today in terms of the sophistication of mobile television services and consumer adoption of these services. But a variety of quasi-standards exist in the region, which means coordination of services within the supply chain is highly unlikely in the near term, which in turn drives up deployment costs and consumer fees – drastically constraining overall adoption. South Korea and Japan are way out ahead of other countries as live mobile broadcast services can be delivered over television-style transmitters or satellites, or a combination of the two, in addition to broadband wide area network-delivered unicast video content. The Beijing Olympics will no doubt highlight the state of mobile television as well as on-demand video clip delivery in China this August. Broadcast standards in that country are far from uniform, however, and low quality of service and business model challenges raise serious doubts about the viability as well as the quality of these services. It will likely be 2010 before China will be a serious regional player. Apart from these standards and pricing issues, spectrum availability still needs to be worked out in key markets like India, which has yet to hold an auction let alone launch mobile TV services. Despite these challenges, IDC found Asia-Pacific should generate nearly a fifth of global mobile video/TV revenue in 2008.
N.A. small, but growing
The North American region highlights other critical hurdles to mobile video/TV adoption, namely broadband device penetration and unlimited data plan adoption. Survey research clearly shows that having a broadband-capable phone is correlated to much higher usage and spending on advanced data services like videos and TV. If customers gravitate toward clip-based on-demand content, then having an unlimited Web/WAP access plan is also essential. However, only about one in seven U.S. mobile consumers have such a plan, which run $10 to $20 per month. Between the necessity of having an advanced broadband-capable device as well as an unlimited data plan, the potential market for mobile TV/video is much smaller than the current 280 million North American customer and subscriber total might suggest. Indeed, IDC pegs penetration of mobile TV/video in the mid-single digits today primarily due to these gating factors.
Wireline oriented companies such as Sling Media – recently acquired by EchoStar for $380 million – which offers a SlingPlayer/SlingBox combo that allows streaming of home-based TV and video content over converged mobile devices are also aiming to take a bite out of MNO services of this type. Still, with Verizon Wireless and AT&T Mobility on the MediaFLO bandwagon, and advertising-based subsidies waiting in the wings, it appears the future for mobile TV/video in North America is fairly bright. IDC forecasts that mobile TV/video services in this region should grow at about 40% annually through 2011.
Western European challenges
Western Europe enjoys a broader base of casual mobile video viewers. The associated
