Ovum has warned that while mobile TV has a lot of potential in Europe, the industry should proceed with caution because of uncertainties around how much people are willing to pay and whether advertising will be able to take up the slack. “Although consumers say in trials that they are willing to pay for services, this should be treated with caution. For Ovum, it should be seen more as an expression that they see value in mobile TV, rather than hard proof that they will pay up in a commercial setting. “How much users are willing to pay is a make or break question,” said Eden Zoller, Principal Analyst with Ovum’s Consumer Practice. “If the answer is not much or nothing, then service providers will need to consider advertising-supported models.”
Ovum said that operators who are promoting mass-market high-end content will have to consider a mobile broadcast solution at some stage (obviously) but “the business case for a dedicated broadcast network for mobile TV is hard to stack up”.
“In a business case analysis for the deployment of a DVB-H mobile broadcast network in the preferred UHF spectrum, Ovum estimates that the cost of deployment in the UK would be euro 140 million. This is taking into account core service requirements which include, among other things, good indoor and wide-area coverage, and 25 channels including some audio…To achieve a return on investment in around three years, a mobile broadcast service provider in the UK would need to ramp up a customer base of 1.7 million subscribers, each generating revenues of euro 10 per month. “This will be very hard to realise if several mobile broadcast networks are competing in the market and considering that user willingness to pay is still uncertain,” observes Poulbere. “This once again underscores the importance of revenues beyond premium content, namely from advertising and value-added services such as interactive applications,” concluded Zoller.”
It’s good to get some figures (140 million euro isn’t that much compared to the cost of most mobile networks), but I understand that the companies are looking over a time frame a lot longer than three years. Mobile networks need to be upgraded frequently, but the mobile broadcast TV networks are expected to be more like traditional TV networks, needing upgrades in the range of decades. (press release)
Subscriber content
?
Subscriber content comes from Gigaom Research, bridging the gap between breaking news and long-tail research. Visit any of our reports to learn more and subscribe.
Advertisement
Advertisement
Advertisement
Comments have been disabled for this post