“On the other hand, what’s the good of losing heart now?”
Samuel Becket in Waiting for Godot.

The protagonists in Becket’s play don’t know who Godot is, when he’s due to arrive, nor do they know what will happen when he does. Much the same can be said about mobile TV. The mobile industry has been waiting a long time but still doesn’t know when mobile TV will become a viable business or how anybody is going to make money from it.

Ericsson, for one, believes that mobile TV already exists. A spokesman at the Mobile World Congress in Barcelona (February 11-14) said that over 170 services already exist worldwide, more than 60 of them based on infrastructure provided by the Swedish vendor. That is true, as far as it goes, but it doesn’t go far enough.

The bulk of today’s mobile video services are provided in unicast mode over resource-strangled 2.5G and 3G networks. Most of the networks lack the capacity to handle a mass market and quality of service is usually poor.

According to recent research by equipment provider Tellabs, there was a 36 percent increase in the number of mobile TV users in Europe and North America in 2007, but that was more than offset by the 68 percent of users who dropped the service.

The most frequently cited reasons for giving up the service were quality and reliability. Churn that is almost double the take-up rate does not make for a lucrative business.

For NDS, unicast networks have never been an attractive option – not only due to their inability to scale but primarily because unicast on a two-way network is a very poor candidate for conditional access. In almost all cases, network security is sufficient.

Thus, NDS placed its bet on mobile broadcast TV – the provision of real-time TV channels over broadcast networks such as DVB-H and MediaFLO. And it is for broadcast mobile TV that NDS has been waiting . . . and waiting. Most of the attendees in Barcelona seemed convinced that it would still flourish and become a credible business, but few were prepared to forecast when or how.

Technology vs. making money

The problem is not the technology, though the cost of building dedicated broadcast networks for standards such as DVB-H has certainly been an inhibiting factor. Still, about 15 million people are watching broadcast mobile TV in Japan and 6 million in South Korea. So the technology clearly works. But in both Japan and Korea, the vast bulk of users are receiving free-to-air services. No one seems to have figured out how to make money out of it. Even Tre in Italy with some 700,000 subscribers - which makes it the world’s largest paid broadcast mobile TV service - is said to be digging itself deeper and deeper into the red.

The problem is actually quite simple. Most broadcast mobile TV services carry between 10 and 20 channels and the average user views the service no more than 30 minutes a day.

Such metrics are unlikely to attract massive advertising or more than a few euros or dollars a month per subscriber in subscription revenue. Broadcast mobile TV lacks the substance to attract meaningful revenues.

For that reason, NDS’ strategy has evolved beyond stand-alone mobile TV. The focus today is on mobile as a supplementary service, either to other TV services or to the new emerging giant in the mobile world: mobile broadband.

Video on mobile devices can supplement traditional TV in two ways. The first is mobile TV as part of an overall TV package that includes traditional broadcast to the home, DVR and possibly streaming and file downloads to the PC. In that scenario, the mobile service leverages content that has already been acquired and a TV headend that already exists. It enables broadcasters to extend their footprint and branding while covering the costs of the mobile segment from subscriptions.

Mobile handset as viewing device

The second synergy with traditional TV is positioning the mobile handset as a viewing device for content that has been saved on a DVR. It is something that has been on the NDS agenda for several years. In the past the mobile device in question was a portable media player which was and remains a niche product.

Mobile phones are almost as ubiquitous as people and video-enabled phones is a growth industry. There are already over 200 million deployed devices.

A mobile handset that is capable of both receiving broadcast channels and playing choice content that has been saved on the DVR and transferred over is a very powerful proposition for NDS’ existing customers. It could also open up a new market among mobile network operators, not only for mobile TV technology but for NDS solutions such as XTV™, the Unified Headend™ and others.

Broadcast mobile TV as a supplement to mobile broadband services is the other area with great potential, even though it is still two to four years away. Mobile broadband had star billing at the Barcelona exhibition, with companies such as Intel, Alcatel-Lucent, Motorola and many others showing their wares. The technologies involved are Long Term Evolution (LTE) and WiMAX, with shorter-term options using Multimedia Broadcast and Multicast Services (MBMS) and an MBMS variant called TDtv.

Mobile broadband and broadcast TV

All are being promoted as the means of providing full Internet access on mobile devices, a number of prototypes of which were displayed on the Intel stand. These so-called MIDs (mobile Internet devices) have 5 to 7 inch screens and provide very high quality video. Of greatest interest was the fact that all the Intel MIDs come with a built-in DVB-H chip.

WiMAX, LTE and MBMS are all capable of providing multicast and/or broadcast delivery. Their throughput, though a huge improvement on what is possible with current 3G, is still constrained and expensive – and will remain so for the foreseeable future. However, a MID with DVB-H is capable of providing the best of both worlds: full mobile broadband plus broadcast TV.

Research indicates that over 60 percent of current Internet usage is devoted to video – with ISPs and telcos not seeing a cent from it, other than their monthly access fees. Mobile broadband operators cannot afford to fall into the same trap, given the bandwidth and pricing constraints under which they will operate. NDS can offer them the means of providing a value-added TV and video service which will convert the necessity of providing mobile bandwidth for Internet video into a lucrative virtue.

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