Trade Group Suggests ‘Right-Price’ For Mobile TV: $20 Per Month
The Mobile DTV Alliance, an industry advocate (pushing DVB-H as the mobile TV tech) comprised supported by Motorola and Nokia, among others, believes it has found the right price consumers will pay for viewing TV on cell phones: a flat $20 a month. In a white paper entitled “The Economics of Mobile TV,” the alliance suggests the building of a separate broadcast network by the industry. The study estimates constructing such a network would cost a carrier between $500 million and $2 billion. The expense would be justified because carriers would more than easily recoup the cost. Hypothetically, the study says, if a quarter of the subscribers of U.S. operators are willing to pay $20 a month for the service, carriers would take in a total of $12 billion annually. At that rate, even if half of the revenue went directly to content owners, and the entire investment in infrastructure was amortized over one year, “there is still plenty of profit to share.” Since the group is comprised of companies that would build such a system, the study provides a clear hint of where the industry feels the direction of mobile TV should go in. PDF Release, and the download page is here.
Posted In: Media & Publishing, TV, Mobile
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Comments (4)
Jan 29, 2007 9:51 AM
In Europe it is very unlikely that people will be willing to pay $20 per month for TV over the cellphone.
7€ / month for 20% of the population would be a great achievement, which makes the business model very uncertain.
I am very interested to know more about the US point of view.
Jan 29, 2007 11:34 AM
Even as a content owner, $20 per month is just too much. Let’s not get this number circulating for eventual acceptance. As a subscriber, I am still ticked off at the inflated bills of my 5 member family cell costs, (actually 6 but verizion doesn’t include medium and larger family members in the “sub” family package).
I know in my state (MA) there has been suggested legislation for price rebates and reductions for lost and dropped calls. While clearly a necessity, cellphone service in MA, is only good 75-80% of time. Yes we will pay even with shoddy service so we may be assessible to business contacts, and even more importantly to our families. I would like them to put the effort on QoS as much as their uncanny ability to account and charge ever time, one even looks at their cell phone.
What I am saying to the drug providers,...I mean carriers is; lower service fees before they even go after incremental dollars. The teens, (my kids) will be the ones that will get “addicted” to show accessibility first while we fight carriers for some sort of refund on massive bills.
The increase in consumer texting cost was a slap in the face of every parent that pays for their school aged kids cell phone. They need to get more creative on rev streams. It is either higher fees or advertising. Come on! Are these the guys deciding our mobile communications future? Their price elasticity studies obviously doesn’t include the lower or moderate economic range, most of US, but accounts for people “just like them”.
They could all get messed up pretty bad with any half-way decent disruptive technology. May I suggest: GRMS, Voice over GPS, or Uber Hams taking over. Cells using exclusively IP or Hot Spot Commo? Hmm.
Aug 5, 2008 4:16 PM
The suggested $20 a month would be alright for some cell phone users granted that the cell phone companies do not add a lot of taxes to the bill. The current usage taxes would have to be done away with so people are not struggling to pay the extra bit of the “surprise bill.” I know that AT and T adds extra taxes for usage to all my phone lines and the bill is always a few dollars more than expected. I would pay $20 a month for tv on my phone granted I knew that it was only going to be an additional $20, not $25.67 or some other random number with usage taxes added to it. Yes the children will be the first to jump on the band wagon of cell phone television watchers, which means that some group will have to step forward to moderate what will be broadcasted on the phone. Shows such as the Sopranos would not be appropriate for a 13 year old with a cell phone to be watching during his lunch break in middle school.
Jan 7, 2009 6:33 PM
What we really need is Mobile DTV and internet combined. We have the technology and can provide the package for 20 a month. Why are the residents (suckers) of the USA the last to get the technology developed here? Korea has internet at 60 MB. We are five years behind in adopting our own technology.
Or maybe DT-/internet for home fixed base use. This looks like the drug companies scheme where the residents of USA pay for the development and the rest of the world gets the benefit of our technology at much lower prices.