By Peggy Anne Salz, Thu May 15 11:00:00 GMT 2003
The distinction between mobile operators and broadcast operators is beginning to blur. The next big opportunity could be mobile TV - if industry gets the model right.
The overwhelming success of mobile voting and alert campaigns around popular television programming prove mobile is a natural extension of TV.
The numbers speak volumes - literally. In Spain Operacion Triunfo, a TV talent show, made history as the country's most "interactive event ever," reporting 2 million text interactions. In Ireland, a country with a population of 3 million, 1.3 million viewers interacted via mobile with the program, "You're a Star." In the UK, the reality show Big Brother 3 reported 10.7 million text interactions, and BBC's Fame Academy posted 6.9 million. The big surprise: the US. The rousing success of American Idol 2 talent show, which reported 2.5 million text interactions, makes this latecomer potentially the most exciting market worldwide.
But mobile it could also be much more. The marked increase in user desire to interact via the mobile with TV shows and celebrities, and improvements in the technology necessary to "broadcast" this content in the form of video streaming, are key developments that pave the way for mobile operators to offer mobile TV as a service.
Eden Zoller, a research director at Ovum in the UK, keeps a sharp eye on this opportunity. She is convinced mobile TV might be a hit with users - if it is short, focussed and tailored. "People don't like missing their favorite TV shows and will use mobile to catch up. Moreover, there will be particular demand for shows that command a big following and are the subject of newspaper reports and gossip, such as reality TV shows, the Oscars, soap opera and sensational celebrity interviews."
Indeed, the pay-per-view model of existing premium channels is well suited to the mobile environment. However, as operators move to "broadcast" TV content to their users, they're going to be confronted by avalanche of issues around editing, packaging and presentation.
View to a Thrill
Put simply, it's not enough to take a TV feed and render it for a small screen. Crude editing might not only spoil the viewing experience; it could turn users off permanently.
And then there's the tricky issue of differentiation. Most content owners shun exclusive contracts, so what's so special about seeing that winning goal or music video via the network belonging to operator X, when operator Y has it as well? Not much, unless operator X can provide its content with a twist.
Operators could invest in production know-how, but that's not their core business. It makes more sense to leave that to broadcast companies. BBC Technology, the technology arm of the BBC, is one of a new breed of broadcast technology companies jockeying for position in the rich media value chain.
To date it provides Hutchinson 3G, better known as "3," with an outsourced solution for the production and management of audio-visual content for its 3G service in the UK.
The job of this mobile broadcast production facility is to take content coming in from some 12 content sources and make it "3 ready," according to John Cuming, head of content solutions at BBC Technology. "We sit between the content provider and the telco," Cuming says. "Looking ahead, it will be part of the operator's value-add to employ a production facility."
Beyond preparing TV content for mobile delivery, the BBC is currently looking into producing its own mobile programming. Encouraged by the success of a pilot program it produced to test a broadband network, a program the BBC is now turning into a television series, the company sees a lucrative opportunity in mobile soap operas and programs that connect fans with their idols.
Dutch television production company Endemol, the reality show pioneer, is also gearing up to make its mobile debut. It has unveiled plans to launch a world-first MMS-based soap opera. While the company is tight-lipped about the details, it is clear about its goal to harness the combined power of TV and mobile. "Our aim is to create new platforms to reach consumers and build relationships," notes William Linders, Endemol business development director. "Programming that is made for the mobile can take this interaction to a new level."
New Kids on the Block
With the lines blurring between broadcast operators and network operators, both need to rethink their business models, warns Monique van Dusseldorp, CEO of Van Dusseldorp & Partners, a consultancy and research firm based in Amsterdam.
Her advice: Team up and act more like video service providers. She can imagine scenarios where operators might "broadcast" special interest TV shows to a limited, but loyal and lucrative user group. For example, UK television stations broadcast Asian programming because the viewers pay for it. Ex-pat Asians living elsewhere might also appreciate a mobile "channel." Mobile TV could be the answer - and it could also help build operators build community.
Enter the Vendors
Whatever the mobile TV model, vendors are likely to play an important enabling role. Convinced of this opportunity, Siemens mobile last week joined forces with Universal Studios Networks Deutschland, a Munich-based company that is part of the international Universal television group, a division of Vivendi Universal Entertainment. Universal Studios Networks Deutschland produces suspense and film noir short films, which it broadcasts on its pay TV stations.
The focus of the partnership is to provide operators with a "ready to go" solution that includes content, in the form of Universal's short films, a streaming platform and integration and hosting services, according to Volker Ziegler, President in charge of solutions within Siemens mobile.
"Major operators may only need a part of our solution, but there are many smaller operators that will require a fully hosted end-to-end solution that will allow them to get back to the business of being an operator, and not a content factory," Ziegler says.
Moreover, local content companies often lack the money and manpower to connect with several operators' platforms. "For smaller operators, local content is going to be their prime differentiator," he adds. "If they require, Siemens mobile can also help them (procure local content), and play the role of a content aggregator."
Siemens' m.traction media streaming solution is commercial, and will ultimately include a plethora of content, Ziegler says. Watch this space for more deals with still more content owners.
The Volatile Value Chain
Looking ahead, boundaries will continue to blur as content providers morph into application developers, and vendors transform themselves into attentive middlemen. Granted the issues of digital rights management, device and bandwidth limitations, and consumer willingness to pay for premium content remain key concerns, but they will hardly hold back the momentum building around mobile TV. In fact, France's K-Mobile, a wireless provider, just purchased a TV license to better showcase its media content and services, and promote text interaction with a youth audience.
A far more interesting issue revolves around the rich media value chain. The demand for quality and just-in-time entertainment (otherwise we can all watch it on TV or the web, right?) demands operators function more like broadcasters. They can either take of the role, and risk scattering their limited resources, our they can make room for a few hungry mouths to feed in the mobile food chain. The jury is out on whether operators will welcome these new players to the party. On the other hand, they won't have much of a choice.
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Peggy Anne Salz is a freelance author who likes to go beyond the day-to-day developments in the mobile space to grapple with the toughest issue: where the industry is going.Her work has appeared in a number of publications including Time, Fortune and The Wall Street Journal Europe, as well as Communications Week International, where she is one of the editors.