01 June 2005

You know the mobile telephone guys are getting serious about TV because the screens on phones are getting bigger. You also know that mobile TV is becoming a serious business when 3, the pure-play 3G phone operator owned by Hutchison, says it clocked 10m music video downloads (at about £1.50 or €2.25 a video) in the six months before Christmas 2004.

According to Strategy Analytics' forecast, of the 71m digital TV devices that will be sold globally this year, 1.9m will be digital TV phones. By 2010 annual sales of all digital TV devices will be 279m, with mobile devices accounting for 73.5m.

Appetites for some video content are very big indeed: 3 says it logs 500,000 football-related downloads every Saturday in the UK. When the first series of the talent show X-Factor aired late last autumn fans downloaded 250,000 two- to three-minute clips of out-takes to their 3 video mobiles.

So what does this all mean to pay-TV companies? If they own some content it provides an opportunity to put it on another distribution platform. But if the cable and satellite players are simply relying on their own distribution platforms they may face some fall-off in viewing. There is only so much time in the day and if the punter gets his football fix on the mobile on the way home from work, why would he log onto his cable broadband or fire up the TV to see it again?

There are many gripes about mobile TV. The screens are too small. The power runs out. The downloads are wonky. But these are all being addressed, and fast.

Beyond offering short clips and downloads on their current networks, operators are also looking to use broadcast technologies such as DVB-H (Digital Video Broadcast-Handheld) and Qualcomm's MediaFlo. Then there's DMB (Digital Multimedia Broadcast), which is set to begin trials in Europe over the summer. As if that wasn't enough, in the UK BT will begin trials on a variant of DAB that is similar to DMB in July. BT claims that DAB and its variants are better bets than DVB-H because the data-casting rights already exist (in the UK BT has them, of course) whereas DVB-H has yet to secure spectrum beyond that used for trials.

The vision is that portable devices will be able to use the cellular frequencies for some things (one-to-one services like video downloads) while the streaming of entire TV channels will be better served with technologies like DVB-H or DAB. Far from forecasting the death of 3G (and all the money that operators spent to secure those frequencies) there will likely be a combination of 3G with some of these other technologies that make video on mobiles more robust.

So do people really want more than the occasional download of the latest pop music video or the winning goal of their favourite football club? OK, and of course porn. This summer a DVB-H trial in the UK will try to answer that very question. Led by mobile operator O2 together with Nokia and Arqiva (formerly NTL Broadcast), 350 of 02's subscribers around Oxford will get to use a DVB-H service. The goal is to find out what they use and ask them what they would be willing to pay. Armed with the results O2 and Arqiva hope to convince regulator Ofcom to set aside some frequencies for DVB-H once analogue switch-off is achieved.

The success of DVB-H and DAB will pose a dilemma for the established mobile phone players. The fact is that DVB-H and DAB are better suited for streaming live TV. That's why mobile operators are involved in trials. The mobile TV future will likely see next-generation phones with both cellular and some other reception technology built in.

Orange is looking to both: it launched a nine-channel mobile TV service in the UK in May using its cellular network. Costing £10 a month and including ITN News, CNN, Cartoon Network and special channels carrying reality shows Big Brother and Celebrity Love Island, Orange is betting on the traditional pay-TV model: one fee for lots of content.

The operators say that the average time spent on a mobile handset is only six minutes a day so the trick is to stretch that to eight or even 12 minutes with compelling content. Even big production companies are getting in on the act: Fremantle Media, the production arm of RTL Group, is producing bespoke content like Best Baywatch Beach Moments for a planned US mobile TV channel called the Thumbdance Channel.