Kate Bulkley, Media Analyst.

Media Money: Mobile and internet TV

By Kate Bulkley

Broadcast News

For Broadcast September 13, 2007

Can television ever be as attractive to advertisers as the internet?

Google chief technology officer Vincent Dureau believes audience fragmentation is a good thing for advertising on TV. If good in this sense means 'good like a poke in the eye with a sharp stick', I think we would all agree.

Funnily enough, that is exactly what the world's largest search engine/increasingly dominant advertising placement powerhouse/content aggregator does mean. Google's reasoning goes like this: TV advertising will become more cost-effective only as TV people learn how to count better who is watching what, and when. Once that happens, advertising on TV will bounce back.

The problem is that this rosy future is still far away. Unlike the online environment, broadcast TV is still tied (for the most part) to antediluvian audience measurement systems. While Google is able to tabulate and enumerate down to the last mouse click, TV is stuck with systems more akin to sticking a finger up in the wind. In the pre-Google days, broadcast TV had a leg-up because of its wide distribution. Multichannel TV gnawed away, but it was when media went online that the wide distribution of broadcast TV channels paled against the worldwide, interactive footprint of the web.

If that weren't enough, Google is becoming a content aggregator (licensing content rather than simply linking to it) as well as a content maker (users are asked to add their comments to stories, thereby creating Google content).

Content aggregation, and the ability to search for content and be linked to it, is what matters to users and, it follows, to advertisers. The broadcast business has to learn to count better, and fast.

Should the future of mobile TV be driven by the market?

The implosion that was the BT Movio mobile TV service should not be taken as a body blow to the prospects for mobile telly. If the misadventure proves anything, it is that getting the service and the content right (not to mention the handset) is a lot more important than what technology (in this case, DAB) is used.

The BT Movio lesson is one the European Commission should heed, but the EU's media and information society commissioner, Viviane Reding, has decided to play favourites.

New technology such as DVB-H and MediaFlo is required to deliver more mobile content to more people at a better resolution - and Reding favours DVB-H. This is a mistake, not because DVB-H is a bad technology (it isn't), but because although setting standards can help new businesses develop, picking technology winners can just as easily slow markets down.

At IBC this week Reding's position came under fire from several quarters, with a feeling that letting the market decide which technology to adopt would be a better idea.

In the UK, the amount of spectrum available for broadcast mobile TV is still under heated discussion. Given Ofcom's pro-market forces attitude, an auction seems likely. Shouldn't an auction also be applied to mobile technology?

The winning technology for mobile TV won't necessarily be the best one (remember Betamax and VHS), but as long as Reding doesn't turn favouritism into a mandate, it will be the best implemented. At least it will have been chosen by the companies who will be using it, rather than by a political body.

Given Sky's track record in making attractive services it should be watched - it has already held two trials with MediaFlo and was a content provider in the DVB-H trial in Oxford. Which technology will win out? My guess is the answer involves Sky.

Now what's the spread bet on which one will emerge victorious? For my betting, the answer includes the word Sky.

DVB-H has launched in several European markets, and in Italy subscribers to the Hutchison's 3 Italia service hit 600,000 in June. The company says its DVB-H subs spend 60% more than the average 3G users.

Meanwhile, in the US MediaFlo has deals with Verizon and AT&T, which together account for just under half the country's mobile phone subscribers.

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