Kate Bulkley, Media Analyst.

Apple puts mobile TV back in the game

By Kate Bulkley

Royal Television Society

April 2010

Whether England, Brazil, Spain or even the USA celebrate victory in the FIFA World Cup this July, a different kind of winner from this summer’s sporting extravaganza in South Africa is being forecast – mobile-phone entertainment.

The received wisdom is that sport and news are the drivers of mobile uptake for traditional TV content. As a result, even the most pessimistic forecaster is betting that the World Cup will be a game-changer for mobile entertainment.

“The global connectedness of the World Cup, and what this could mean for mobile video, is hugely promising,” maintains Ray de Renzo, chief marketing officer for MobiTV in the US. The company provides mobile entertainment for some 8 million US handsets and recently created NBC’s Winter Olympic app for iPhones.

“I would be hugely disappointed if the World Cup wasn’t one of those pivotal events in the evolution of mobile video,” he adds.

Yet for all the excitement over the growing appetite for mobile entertainment, the expectation that “this is the year of mobile TV” has led to empty promises in the past.

So what’s different this time around? The change can be summed up in a phrase that is music to the ears of Apple CEO Steve Jobs – the success of the iPhone.

“The iPhone opened up the concept of simplifying usage tariffs and is a device that is very easy to use,” says Mark Kortekaas, the BBC’s future media and technology controller for audio, music and mobile. “iPhone challenged the rest of the industry to get much better about devices.”

The iPhone is not the only phone that is driving mobile entertainment usage. It has, however, been a “game-changer” for the industry, forcing other handset makers to build their own “iPhone killers”.

“The iPhone has completely changed the game. It is not like any telephonic device you may have encountered before,” says Kate Bradshaw, deputy managing director and head of online commissioning for ITV.com. “It has brought a level of engagement, quality and personalisation that mobile to date has never really delivered.”

The iPhone App Store, where more than 140,000 mini-applications are available for everything from identifying a song you hear in a bar to discovering if the trains are running on time, has made mobile phone entertainment more accessible and a lot more fun.

The BBC announced in February that it would launch its first iPhone apps around news and sport in time for the World Cup.

Following intervention by the BBC Trust this has been put on hold becuse rivals are concerned about unfair competition. It will add mobile apps for other devices such as BlackBerry and Android (the latter based on Google’s Android operating system) later in the year.

The live match experience will be at the heart of the iPhone application for the World Cup. Football fans will be able to access live match video whenever BBC TV shows it. Additionally, on-demand clips of every goal scored in the tournament will be available. Coverage of Formula One and other sports will emerge on smart phones in the coming months.

The BBC’s mobile sites are already among the most popular in the UK, according to researcher Comscore. “The internet is taking its place alongside TV and radio as a third platform in its own right,” Erik Huggers, the BBC’s director of future media and technology, told the Mobile World Congress in February. He added: “Long term, mobile could become the primary point of internet access for the majority of people in the UK.”

The iPhone is also changing the demographic make-up of smart-phone users, traditionally confined to gadget-obsessed males between the ages of 18 and 34.

This is particularly good news for a broadcaster such as ITV, whose flagship channel, ITV1, tends to attract a lot of middle-aged women. “Women over 35 can be a bit more challenging for mobile,” says Patricia Wagstaff, director of digital productions for ITV Studios. “We certainly expect to see iPhones and smart phones in general entering our yummy-mummy handbags this coming year.”

ITV launched its first iPhone app, around Dancing on Ice, in January 2009. Only about 60,000 people downloaded the free app and it managed just a 1% conversion rate to the premium content provided. But, according to Wagstaff, had there been time to create more bespoke content the free-to-pay conversion rate could have been in the order of 5%.

ITV is planning several more iPhone apps. These are in so-called “core passion” areas such as food and beauty, plus an app for This Morning and the new seasons of Britain’s Got Talent (BGT), The X Factor and I’m a Celebrity… Get Me Out of Here!

These mobile applications will feature all the usual components, such as keeping users up to date on the progress of contestants between shows, extra clips and fan applications.

ITV also plans to have some “wacky” apps as well. In the pipeline is an app of the Big Red Button used by BGT judges to dismiss contestants. The app, due to launch on iPhone this month, will be advertising-supported and even includes the annoying buzzing noise familiar to millions of viewers. It sounds perfect for friends drinking together in the pub.

The broadcaster is talking to talent about how to make apps that might build on their profiles. Following the success of the Jamie Oliver “20-Minute Meals” app on the iPhone last year (even with the £4.99 price tag it was a top seller), ITV and others are keen to create their own celebrity-based apps.

Inevitably, making money on mobile has its own set of issues. The financial models include sponsorship, ad-funded and pay-per-download. But it is difficult to make the numbers add up, says Robert Marsh, head of TalkbackThames Digital, which runs ITV’s The X Factor and Britain’s Got Talent websites.

However, TalkbackThames has experienced financial success with licensing gameshow formats for mobile games. “Mobile licensing for games based on the likes of Blockbuster, Blankety Blank and Family Fortunes is hugely profitable,” says Marsh.

The iPhone and the other, new, user-friendly smart phones are encouraging, but Marsh thinks that the next big move for mobile is to add in the Facebook element. “I think the big money is going to come from creating social-media games as well as standard, arcade-style games for mobile handsets,” he says.

Meanwhile, money is beginning to emerge on the mobile app horizon: ITV’s BGT app on iPhone will be sponsored by Domino’s Pizza. There are plans to have a simple in-application ability to order a pizza as well. “Moving from advertising that is brand-focused to one that is direct-response would make a lot of sense for us. That is precisely what smart phones allow you to do,” says ITV’s Bradshaw.

She admits that the business models for mobile do not yet “stack up”, especially compared with the growth of ITV.com. “Mobile is a bit more tricky,” says Bradshaw. “We have put our toe in the water, but I don’t think mobile will be a major part of our business until 2011.”

That said, the broadcaster is, of course, working on mobile applications for the World Cup, but details are sketchy. “For ITV not to be at the heart of the nation’s conversation during the tournament would be anathema to the brand,” says Bradshaw.

Crucially, ITV’s new chairman, Archie Norman, is “very confident” about ITV’s digital future, according to Bradshaw. “He is showing huge interest and I hope the financial commitment will come as well. In a very short period of time he has really started to listen and take an interest in some big ambitions we have. I think he will take decisions quickly.”

Mobile entertainment has clearly moved beyond simply streaming TV channels; it’s about community, it’s about interaction and it’s about consumers feeling connected. And this year it’s also about learning how to maximise mobile entertainment around the World Cup.

As long as it’s not an Algeria-North Korea final, (which, of course, hardly anyone in the UK will watch on TV, much less follow on mobile) then the industry could be celebrating afterwards.


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