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The third screen goes dark: mobile television loses its reception

Continued economic strife in 2009 may accelerate the temporary demise, in some regions, of the mobile industry's most talked about service this decade, mobile television.


A combination of factors may weigh against mobile television, which has been positioned by its advocates as the third screen.

Lower liquidity and a focus on cash may make it unlikely that investments in broadcast systems, such as DVB-H and mobile television systems based on existing 3G infrastructure, would be approved76. Lower handset subsidies77 may mean fewer high-end phones capable of supporting mobile television coming into the market. Lower media sector revenues suggest a greater reluctance from the creative sector to experiment with new media formats78. Depressed consumer confidence is likely to make consumers less likely to spend on add-ons to their mobile subscriptions79. Advertisers, who tend to regard mobile as an experimental format, may decide to focus funds only on media formats that have previously been successful80.

Furthermore, the performance of mobile television was disappointing in 2008. Major sporting events, which can be a catalyst for the adoption of new media formats, largely failed to launch mobile television. While two-thirds of the world's population watched the Beijing Olympics on television81, there was scant demand for the event via mobile television82.

The creation of mobile-specific content also failed to make an impression, aside from that on the bottom line. Customized content in some cases attracted audiences measured in the hundreds83, in markets where conventional television could attract millions.

This bundle of challenges is likely to reduce new deployment of mobile television services around the world to a trickle. It may also accelerate the switch-off of many existing services.

Essentially, mobile television may simply no longer receive the benefit of the doubt. In 2009, therefore, five times more mobile television services may be closed than those launched84. Subscriber numbers may fail to reach even the bottom range of analysts' forecasts: mobile television's total global audience may fall short of 30 million85.

Fee-based services, such as those offered by many European operators, may fail to gain traction, and so be closed off. Advertising-funded services, such as those in South Korea and Japan, may continue to endure disappointing levels of adoption and usage, and might fail to break even.

There will not be a complete fiasco for the third screen in 2009. One of the few examples of popular demand for mobile television in 2008 was for analog mobile television handsets, complete with meter-long aerials. Users of these devices, which are essentially equivalent to portable LCD televisions, may outnumber digital mobile television subscribers by over two-to-one86.

Bottom line

Everyone involved in the mobile television industry, whether an operator, a handset developer or a creative, should take a long, hard, look at the demand for mobile television so far. The downturn could be a perfect opportunity to call time on a format that has too many fundamental challenges to work.

But that does not mean that there is no space for mobile phones in the television market.

Mobile may be unsuitable for viewing television programs, but it is potentially an ideal medium for enhancing consumers' terrestrial television experience. Mobile telephony could provide an efficient payment mechanism for VOD - delivered to the set top box at home - particularly for smaller VOD players. Mobile phones can also be used to control the DVR. Television broadcasters can use mobile as part of their CRM strategies. Individuals could be sent reminders of the start of a new series of a favorite program, or be informed of the launch of a major new box-set. And the mobile phone has been well used as a means of voting on the outcome of some television programs.

The mobile phone could end up as the broadcasters' best friend.

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