Kate Bulkley, Media Analyst.

Who controls what you see?

By Kate Bulkley

Royal Television Society

September, 2005

Broadcasters are discovering that content may be king, says Kate Bulkley, but the phone networks control viewers’ access to the audience chamber

One of the big stories of the TV summer was the disastrous opening weeks of Celebrity Love Island on ITV1. But after a poor start in the ratings Granada’s latest reality show found an audience and, defying its critics, a second series is set to be commissioned.

In the world of mobile video, however, a different drama played out over the B-list celebs. Mobile operators weren’t as loyal to the celebrity lovers as the TV audience and, much to the dismay of ITV, lowered the programme’s clickable icon in their portal pecking order to make way for other content.

This seemingly small spat illustrates a big fight that’s brewing over who controls the mobile distribution of video. The broadcasters are feeling exposed if decisions over how their content is handled is left to the mobile operators.

“I don’t want a situation where an operator drops Celebrity Love Island off its front page because it doesn’t think there is a enough traffic and we don’t have any control over that,” says Jeff Henry, the newly installed CEO of ITV’s consumer division.

An audience worth fighting over

Mobile video is fast becoming something worth fighting over. There is already over 100% penetration of mobile phones in the UK (because some people have more than one handset) and most of them are essentially smart phones capable of receiving still pictures and short video clips.

Meanwhile, the number of 3G phones capable of receiving high-quality video now stands at between 3.5 and 4 million, and is growing fast. And it’s not just in the UK. According to consultancy Strategy Analytics, of the 71 million digital TV devices forecast to be sold worldwide in 2005, 1.9 million will be mobile TV phones.

By 2010 more than a quarter of the 279 million digital TV devices will be mobile phones. “The industry is pushing digital TV into people’s hands,” says David Mercer of Strategy Analytics. “But there is still the challenge of getting them to use it.”

Getting people to use their phones to view video clips, from music videos to winning football goals to soft porn, is a key priority for all the mobile operators. Fierce competition in the prices they can charge for voice calls means the operators need usage from other services, such as text messaging and mobile video, to help justify the high prices they paid for their 3G operating licenses.

After a slack start several years ago with WAP portals that were slow and clunky to use, mobile video is starting to catch on. Producers, including Endemol and FremantleMedia, are beginning to produce content with mobile handsets specifically in mind.

Channel 4 says it already has some mobile-targeted productions in development. And in July Sky launched its own downloadable mobile application that sits on a users’ phone and acts like a mini EPG for Sky’s mobile content.

“It’s about Sky being a provider of entertainment and not just to the TV set,” says Stephen Nuttall, business development director at BSkyB.

Meanwhile, mobile TV services (where entire TV channels are streamed live to mobile handsets) are starting to emerge. Since May Orange has offered nine TV channels to its 3G customers in the UK for £10 a month.

At the same time mobile operator O2 and Arqiva (formerly NTL Broadcast) are testing a competing broadcast technology called DVB-H in Oxford to deliver mobile TV to specially enabled handsets, and Virgin Mobile and BT are running a four-month mobile TV pilot in London using digital radio frequencies.

Make shows for ex-TV viewers

“A lot of commercial organisations are feeling a big commercial crunch so they are looking for new ways to monetise content,” says Angel Gambino, former controller of business development and emerging platforms at the BBC who this September joins MTV in a new-media role.

She adds: “At lot of traditional telly people are looking at mobile video as another way to address key audiences. ABC1s are valuable commercially and teens are important because they are early adopters.”

Extracting figures from mobile operators about how much mobile video is actually being consumed is not an easy task. Unlike mobile ring tones, which now have their own Top 20 hits chart, mobile video statistics are notoriously slippery.

Music videos, sport and news typically take up the lion’s share of the top mobile video requests for all opera-tors (and inevitably porn as well, but they don’t like to talk about it). Sky says that its coverage of the Pope’s funeral was among the biggest news-related downloads to date. Downloads of the 7/7 London bombings were not that high because the mobile networks themselves were down for much of that day.

MTV, which pioneered the first mobile music video clips in late 2003, says that in addition to its music videos MTV’s branded TV shows like Dirty Sanchez and Jackass are also big sellers on mobile. “Stunt-based content is perfect for this medium,” says a spokesman.

Download costs

When it comes to talking hard statistics, 3, which operates the biggest 3G network in the UK and counts more than 3 million subscribers, is the most forthcoming of the operators. 3 sold 10 million music video downloads to its UK customers (at between £1.50 and £2.25 per video) in the six months to Christmas 2004.

In May this year as the football season reached its climax, 3 logged around 500,000 football-related downloads, including game highlights and post-game interviews with players and managers.

And during the first series of ITV1’s X-Factor last autumn fans downloaded 250,000 two- to three-minute video clips to their 3 mobile handsets alone.

So far this year Big Brother downloads on 3 phones are “more than double last year,” says Graeme Oxby, director of marketing at 3.

Other operators are also clocking up mobile video downloads and several operators have begun streaming live video to mobile handsets. The 2005 Big Brother had deals with Orange, Vodafone and 3 to stream the show live.

But all three operators have a different pricing model, ranging from a daily subscription rate (Vodafone) to a subscription plus a so-called data charge based on time spent viewing (Orange), to a per-minute charge at a flat rate (3). It can all be quite confusing to users. “We need unified pricing like we now have for mobile voting,” says Peter Cowley, director of interactive media at Endemol, which produces Big Brother. “We are lobbying the operators.”

Brand values

Another potential handicap is how the broadcasters’ content is marketed by the operators. In February Channel 4 decided to send out a request for proposals to all the mobile operators for its latest Big Brother series and chose to work with Vodafone, Orange and 3 only.

“The branding that operators give us is as important to us as the revenues we earn off the back of it,” says Paul Whitehead, head of business development for new media at Channel 4.

At the same time, Channel 4 has spent over £1m to launch its own mobile portal for Big Brother and other 4 content. “We know that the mobile operators will still get some revenue because consumers are using their mobile service, even if users go to our portal to access g page 10 Page 9 g content,” says Whitehead. “But having our own portal gives us more freedom in what content goes up there and how it is promoted. Operators are commercial so it is likely they will put content up on their portal that is going to generate the most traffic for them. We are a public service channel so we have some different concerns, in addition to commercial ones.”

ITV’s Henry agrees that control over the look and feel of the broadcaster’s content on Vodafone Live! and Orange World and the other mobile portals is very important.

As Celebrity Love Island demonstrated, he wants much more control over how ITV’s shows are presented and marketed to the mobile viewer. Following Channel 4, the BBC and Sky, ITV intends to have its own dedicated mobile portal up and running by the autumn. “I want a situation where the public will find the entire ITV mobile showcase within an ITV environment that we control,” says Henry. “Over the next year we are going to be moving from being a follower to being a leader in some of these things, like mobile.”

How to build a new channel from the thumbs up

FremantleMedia is taking another approach to controlling its content in the mobile world, partnering with a US company called Mobliss to create a mobile TV channel that will be a umbrella brand for lots of different kinds of content from re-versioned Baywatch clips to new bespoke mobile content.

“If you want to launch a TV programme you need a big TV channel to do it, but in the mobile world we don’t have that today,” says Claire Tavernier, senior vice-president of interactive for FremantleMedia. “So we are partners in the Thumbdance channel and we want it to become a brand in the mobile world first in the US, but we are looking at ways to bring it to Europe.”

The operators themselves recognise that the TV world is starting to get more interested in mobile video. Oxby at 3 sees the move by broadcasters to launch their own portals for mobile content as a dilemma for both operators and broadcasters: “Some broadcasters are thinking, ‘Oh well, we really don’t need the mobile operators. We’ll just do our own mobile site that consumers can go to if they want,’ but it’s a pretty lazy way of getting your content out to people.

“It assumes that people know that they’ll have to pay for it and what if there are big files? People will end up paying a fortune. We need to be do better in how we work together, to make content available, relevant and priced so we all make a reasonable return without killing the market.”

Mobile TV portals lessen dependence on operators

Ultimately it boils down to control. The broadcasters see the launch of their own mobile portals as a way to balance the mobile operators’ grip on how their content is marketed, while the operators themselves are keen to make their own judgement calls about what and how content is promoted.

As the BBC found out when it offered the Grand National horse race to operators earlier this year as a free service, if the operators can’t figure out a way to make money on a particular piece of content they will block their subscribers from accessing it altogether. Several operators did offer the race but Vodafone and O2 did not.

Graeme Ferguson, Vodafone’s director of global content development, says that working with the BBC is more difficult because of the corporation’s public service remit, adding that in this particular case the BBC did not give the company enough time to work out a “relevant consumer offer” for the horse race. “The BBC needs to appreciate some of the commercial realities and notice periods for mobile operators.”

Oxby at 3 is even more adamant: “We’ve got a very small shop window, it’s only 4cm by 4cm so my natural inclination is going to be to promote those things where we have a better customer proposition, that is, one that works really well, that is priced sensibly and where the user has a great experience. I don’t have a massive TV shop here. I only have a few shelves.”


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