Broadcasters may be close to completing a two-year process for a technical standard for transmitting video to mobile devices, however, already analysts are questioning whether its too late, and if consumers are already satisfied with the free streaming-video applications being offered on the iPhone and other smartphones.
The standard called the Advanced Television Systems Committee-Mobile/Handheld (ATSC-M/H) will be voted on by the full membership this summer, reports broadcastingcable.com. If it passes, the Open Mobile Video Coalition says 70 stations are are on track to launch mobile DTV services later this year, though real consumer devices probably won’t hit the streets until 2010.
Today, cellphones can watch clips on YouTube and other streaming video services. There’s even specific news stations, such as BBC World and Al Jazeera English, which both launched iPhone apps recent, through a London-based company, Livestation, reports Reuters. “This is mobile TV 2.0 — completely reinvented and redesigned, and I think it’s going to overtake the old models very very rapidly,” said Livestation’s CEO Matteo Berlucchi.
At the center of the debate is not necessarily technology. Broadcasters, and even other services like Qualcomm’s FLO TV, have an advantage because they are using designated spectrum to deliver it over the air. The downside is that the phone or device has to have a special chipset embedded in it to work, but the quality is much better. Likewise, some streaming video services may not offer the highest quality, especially if the cellular networks get overcrowded.
Rather, the debate is over making money. Forecasts for the market have nose-dived over the past few years. Strategy Analytics now expects the mobile TV broadcasting market to total $280 million next year. Only three years ago the firm forecasted the market to reach $5.4 billion in 2010. “It is a financial disaster,” said John Strand, a consultant who has followed the mobile industry closely for more than 12 years. “It’s a nice product, but the customers won’t pay for it.”
While that may be true, not everyone is expecting to make money via user subscriptions. FLO TV, which is distributed through Verizon Wireless (NYSE: VZ) and AT&T (NYSE: T), expects users to pay about $15 a month for the service. But as Qualcomm (NSDQ: QCOM) rolls out more nationwide coverage, it expects to launch its own direct-to-consumer offering that may be more flexible in pricing. Likewise, broadcasters haven’t settled on a business model for their own mobile digital TV offering, but they think it would be more similar to the traditional TV market, where users would get a set number of free channels, and the service would be ad-supported.
It will remain to be seen if that’s enough, and if consumers would rather watch live TV via a broadcast, or streaming over the cellular network.