Current Business Models For Mobile TV Don’t Work: Report
By James Quintana Pearce - Mon 21 Apr 2008 07:32 AM PST
By the end of 2007 there were more than 17 million mobile TV users in Asia, according to Media Partners Asia and reported by Asia Media Journal. While that’s a pretty good figure, the article notes that in South Korea and Japan the business models for mobile TV remain unprofitable, with a lot of that down to government regulation. “Japanese broadcasting regulations prohibit advertisers from generating profit and restrict content developers from producing exclusive programs for mobile. Similarly, government regulation is limiting opportunities to generate advertising revenue in Korea"… the article opines that a mix of free and paid services are critical to profitability and growth, but the regulations hamper the service providers using these business models.
Meanwhile, Digital Broadcast has reported interesting (and similar) comments from the recent Mobile TV World Summit in London. For example, MTV International claimed that it has signed deals with telcos that give 1 billion people globally the ability to access MTV content on their mobile phones—but these deals are not currently turning a profit for MTV. Dan Whiley, commercial vice president of digital media at MTV International, said that “MTV generated more cash in four months from iTunes downloads in the UK than it did from all of the video-on-demand deals it maintained during the same period with mobile operators across Europe...(and) that 30 percent of MTV’s digital content revenues are currently derived from ringtones and games downloaded to handsets”. He put the problem down to complex and costly billing practices.
The generally accepted theory is that advertising is the key to driving subscriber growth—eg, “research by UK broadcaster Channel 4 revealed that 24 percent of its mobile content service subscribers had cancelled their subscriptions due to ‘bill shock’. The research also indicated that ad-funded, or ad-supported, content was four-times more likely to be accessed by subscribers”. Whether the scale can be achieved to make an advertising model profitable remains to be seen, but it makes sense to try it rather than stick with a business model that doesn’t seem to be working… The one exception seems to be 3 Italia. There was also a very wise statement from Melissa Goodwin, UK mobile controller for British broadcaster ITV: “If content is free online then we cannot start charging for it on mobile”. It’s good to start getting away from the idea of a “mobility premium”.
Posted in: Countries, Asia, Entertainment, Mobile Video, Mobile TV
