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Panel session summary and highlights
The panel
- Kate Bulkley, Media & Telecommunications journalist (Chair)
- Ray DeRenzo, Vice-President of Business Development, EMEA Region, MobiTV
- Graeme Ferguson, Director of Global Content Development, Vodafone
- Richard Madden, Head of Media, Close Brothers Corporate Finance
- Alan Sewell, Strategic Planning Manager, BskyB
- Mike Short, Vice-President of Research and Development, O2 Group
- Matt West, Vice-President of Mobile Media Worldwide, Alcatel (pvNS) and Board Member of the Mobile Entertainment Forum
The topics
It is clear that people want mobile TV and are willing to pay for it, but it is early days. Fifty per cent of upgrading Vodafone customers are taking phones with TV capabilities; of these customers, two thirds keep their subscription beyond the initial free offer period. The Sky / Vodafone mobile TV service has gained over 100,000 customers from launch in September 2005.
Handset capabilities and content discovery are key and it is critical for operators to develop easy to use content navigation systems. Personalisation is important for customers. Pricing and service bundles are also key factors and quality content is essential - particularly as new services are introduced.
It is still difficult to predict what sort of content will drive the success of mobile TV. Currently, music is the most important type of content, followed by participation TV (e.g. SMS voting for Big Brother) and then mobile entertainment services (games, internet etc). Some believe premium brand TV shows will drive change in the short term, with made-for-mobile and niche programming finding a place in the mid term as audiences become familiar with the new platform. Brands are important in driving subscriber take-up of new services - but experience shows that customers quickly start to experiment with their programming choice. This is where niche and made-for-mobile may be critical.
Non-linear services will be crucial to the future of mobile TV. Mobile TV may move away from the linear model after linear broadcast services have established the new medium. On the other hand, there may always be a significant role for linear broadcasting alongside on-demand and made-for-mobile content.
Clearing mobile television rights continues to be a problem, although progress is being made. The problems are particularly acute for operators offering cross-border services who challenge traditional territory-based licensing models.
Analysis of mobile TV use has shown surprisingly high use in the home, despite the availability of conventional televisions. Daily patterns have also yielded unexpected results - there is no evening peak time as for conventional television, but a stable daytime plateau.
Big investors - content owners, mobile networks and broadcasters - are aware of the potential of mobile TV and are acting aggressively to get into the market. Their objectives are as much defensive as expansionist. At this stage, it is not clear who will dominate the new market. Content providers can usually charge premium rates for premium content. For other content, however, the balance of power usually lies with the broadcaster or distributor and monetisation will continue to be a challenge. Vertical integration is unlikely, with partnerships between operators and broadcasters being the way forward, rather than broadcasters buying operators or vice versa.
Users will tolerate a certain amount of high-quality advertising, but the acceptance threshold is low. These services are targeted at a young, advertising-averse market; if advertising is pushed too hard, it will drive away these customers.
"The panel showed that mobile TV is not just the same thing on a new platform. It will be a powerful new medium, one that is TV-like but far more personal and interactive. It will have the power of prime time TV, but the immediacy and strong customer relationship of mobile. The technology is proven and commercial models are there - at least for the early phase of service. But there is still some work to be done on the legal side - content rights, data privacy and content regulation are evolving yet have some way still to go. Access to radio spectrum for broadcast or unicast systems remains a concern. The Digital Dividend is still three or four years away; in the meantime spectrum remains scarce and a constraint on the development of these new services."
Rod Kirwan, partner, Technology, Media and Telecoms department, Denton Wilde Sapte
"Listening to the likes of Sky and Vodafone discussing take-up rates for their joint offering, MobiTV telling the audience that they have over a million users worldwide and O2 outlining their experience of viewer preferences, it's clear that mobile content services are no longer in the realm of speculation, experimentation and theoretical possibility but are a commercial reality that is revolutionising the way we view the media industry. On the regulatory side there are still many areas of uncertainty: the challenge for regulators will be to ensure that any regulatory regime is future-proof and is not overtaken by technological and commercial evolution before it can even take hold. The investor community is also going to have its hands full trying to second guess who will come out on top in the new media world. As lawyers our challenge is to best serve the interests of our clients, whether they be rights holders, content distributors, technology providers or investors, against the background of such dramatic change."
Ingrid Silver, partner, Technology, Media and Telecoms department, Denton Wilde Sapte.
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