TV and Video Services on a Mobile Phone: the killer application for 3G?

This publication has been discontinued on July 19, 2011.

Introduction

Product overview

Market research indicates strong latent demand for mobile TV and video, and early take-up of services in some markets shows the potential to translate this into high take-up and usage. However, the opportunity presents substantial challenges relating to the technology platform, business model and content acquisition; operators face the challenge of delivering the services that mobile users want at an affordable price, and still making a profit.

Although 3G achieves substantial improvements in throughput, capacity and cost per Mbyte compared with 2G, TV and video services can consume substantial network resource and yield lower revenue per Mbyte than other services. Several mobile players, including Nokia and Vodafone, are experimenting with digital TV broadcast platforms as a complementary technology for the delivery of these services, and a number of mobile handsets in Japan and South Korea already incorporate broadcast TV receivers.

A further challenge for mobile operators is acquiring, packaging and branding attractive video content, which often comes at a very high price. Mobile operators face a diverse set of potential suppliers ranging from well established broadcasters and film studios to numerous independent sources and a number of emerging video content aggregators.

Given the potential of TV and video services it is critical for mobile operators to establish the right technology evolution path and to forge early relationships with the right content and broadcast players. This report identifies key factors in achieving success with mobile TV and video services.

TV and Video Services on a Mobile Phone: the killer application for 3G? answers your key questions:

• What is the market opportunity for mobile TV and video services? What are the key challenges for operators and broadcasters to address this market?
• How are mobile operators addressing the 3G video services market today? What services and business models are being introduced?
• How will advances in cellular technology (e.g. HSDPA) change the fundamental business case for mobile TV and video services?
• What are the alternatives to 3G for the delivery of mobile TV and video services? What scope is there for integration with DVB-T, DVB-H or satellite TV?
• What are the key factors in the business model for successful mobile TV and video services? What is the potential revenue per Mbyte for mobile video? How significant are content costs?
• What actions can be taken now to secure a strong position in the mobile video market?

Who should read this report?

• Mobile operators: understand the market and business model for mobile TV and video and the implications for 3G technology and service portfolios. Understand the need for relationships with broadcasters and broadcast technology integration requirements
• TV broadcasters: understand the capabilities and limitations of 3G technology for delivery of TV and video services and partnership opportunities with mobile operators
• Handset and equipment vendors: understand the factors shaping the technology platform for delivery of mobile TV and video services
• Investors: understand the importance of mobile TV and video in the 3G service portfolio and the potential impact on technology evolution

Contents

0 Summary

1 Mobile TV and video offers real potential for 3G network operators

2 Evidence grows for strong latent demand for mobile TV and video services

2.1 TV usage and pay-TV revenues demonstrate the powerful force of TV in the consumer market

2.2 '3G TV'  may be the antidote to slow 3G take-up

3 W-CDMA is best suited to short, premium-priced video clips

3.1 Limitations of W-CDMA networks and handsets constrain the ability to deliver TV and video services

3.2 Limited volumes of premium-priced video clips can achieve a balance between revenue per Mbyte and affordability

4 Technology developments are needed for intensive mobile TV and video

4.1 W-CDMA HSDPA and advances in video coding are key to enhancing the profitability and quality of 3G video services

4.2 Alternatives to 3G macrocells will be required to support extensive delivery of TV or video to mobile phones

4.3 Alternatives to broadcasting technology also need to be considered

4.4 Developments in mobile devices will be key enablers for mobile TV and video services

4.5 Mobile operators must carefully monitor the diverse technological approaches across different markets

4.6 Technology must be complemented by other critical ingredients to achieve success with mobile TV and video

Actions

List of figures and tables

Figure 0.1 Impact of pricing and data rate on revenue per Mbyte for a three-minute video clip

Figure 2.1 Comparison of time spent using TV, radio, home Internet and mobile phone services per person per day in the USA and the UK

Figure 2.2: Growth of EV-DO customers in South Korea

Figure 2.3: Pro rata annual ARPU for SKT, March 2004

Figure 2.4: Pro rata annual ARPU for KTF, quarter ending June 2004

Figure 2.5: Split of SKT June data packets by different content types, October 2003

Figure 2.6: Split of KTF EV-DO packets by different content types, quarter ending June 2004

Figure 2.7: Split of June hits by different content types, October 2003

Figure 2.8: TV session lengths in the Finland mobile TV trial

Figure 2.9: Time spent viewing individual TV programmes in the Finland mobile TV trial

Table 3.1: Comparison of Mbyte consumption of various service scenarios

Figure 3.1: Data consumption of typical mobile data services

Table 3.2: Revenue per Mbyte for example services

Figure 3.2: Relationship between cost to end users and programme length for high/low video quality and revenue per Mbyte of USD1/0.5

Table 3.3: SKT June pricing for TV and video-on-demand services, August 2004

Table 3.4: KTF fimm pricing for TV and video-on-demand services, August 2004

Figure 3.3: Revenue (per Mbyte and per download) from download of a three-minute 4.5Mbyte video clip from SKT June and KTF fimm, by different types of user, August 2004

Table 3.5: Examples of 3 video services in the UK

Table 3.6: Examples of 3G video-clip services in the UK

Figure 3.4: Impact of pricing and data rate on revenue per Mbyte for a three-minute video clip

Table 4.1: Broadcasting options for delivery of TV to mobile devices

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