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Summary:

Wow, mobile TV has a long way to go — in Europe and North America, at least. While Alcatel-Lucent and France Telecom (NYSE: FTE) VPs bored…

Wow, mobile TV has a long way to go — in Europe and North America, at least. While Alcatel-Lucent and France Telecom (NYSE: FTE) VPs bored a Mipcom panel audience with a summary of technical standards acronyms, fellow panelists told them the stark reality: mobile TV has no advertisers and almost no viewers.

M:Metrics analyst Paul Goode said adoption was just 0.60 percent (US) and 0.92 percent (UK), with high churn. Microsoft (NSDQ: MSFT) mobile ad firm Screentonic’s founder Marc-Henri Magdelenat warned the medium is “not there yet because we (advertisers) definitely like reach … if you want to do effective advertising on mobile TV, you need to address millions of people”. With no advertising to support itself, mobile TV must charge viewers – but here’s Magdelenat’s rub: “‘I’m definitely not convinced that people will pay a lot of money to watch the same programme they can watch for free on the internet or your TV.” Go figure.

So how on earth will this industry ever find the finance it needs to get off the ground? Alcatel-Lucent VP Piere Barnabe said to build a mobile TV network of 20 to 30 channels covering just 70 percent of the population here requires a capital outlay of 150 million euros ($212.19 million) to 400 million euros ($565.84 million, followed by 60 million euros ($84.88 million) annual operating expenses and 50 million euros ($70.73 million) annual content costs – a five-year commitment of 800 million euros ($1.13 billion).

France Telecom SVP Georges Panalver conceded: “We cannot start being financed by advertising so we must start with paid bouquets.” Unfortunately, paid bundles subsidiary Orange launched in Spain and the UK “collapsed because of the lack of content and the weakness of the content”. Perhaps that is why Orange is also looking to WiFi (not just DVB-H, DVB-T and CDMA) as a delivery channel. Panalver said 70 percent of Orange mobile TV consumption takes place in the home or office, and Orange could deliver a “better customer experience” over its network of 30,000 hotspots.

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  1. Mobile-TV is in a classic catch-22. To get the advertisers excited, there need to be first enough eye-balls, and the promise for more. The CapEx for service deployment is sizable, and the ecosystem players must find a business model that will allow them to subsidize the service and attract viewers.

    At GoldSpot Media, we believe that the critical factor for the success of Mobile TV would be to get the service into every terminal and ensure little additional drain on the subscriber. With increasing user base, mobile operators can apply their goldmine of subscriber data to monetize the service by highly targeted and personalized adverts that can lead to higher CPMs. Mobile operators and content providers must work together to make the business model successful and the revenue model meaningful for all.

  2. Those that understand the market, know that the industry has a habit of over-hyping everything. Its all just a question of time. Mobile TV will be ad-funded but its not successful now. I always half any analyst forecast and double the time and then you get a more realistic picture of the industry. When Mobile TV is free and flat rate data plans are common usage will explode. For every piece of bad press there is another good story. At Yamgo, we're focused on direct to consumer services for content providers to encourage the content owners to enter the market with ad-funded or pay-per view models.

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