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| Published: Wednesday 30 January, 2008 | ||||
| Over three days this week at the Mobile TV World Congress in Paris, after 7 years of an industry trying to breathe life into itself, all the constituents of mobile TV spent three days trying to come to terms with how to bring about mobile TV. Largely they failed, but somehow progress is being made and many believe that this year will be the year when the glacially slow worlds of telecommunications and broadcasting finally stagger from the maze of technology offerings and produce something in Europe that a consumer can actually acquire. Asia has already piled into the technology. In Europe mobile TV plods towards its gradual implementation, bereft of insight and without a business model. Consumers we know will use such a service, they look forward to it, they like it. We know this despite countless surveys to the contrary, which point to the inevitable lack of interest from consumers that have not seen just how good mobile TV services can be when delivered from DVB-H, MediaFLO, ISDB-T or T-DMB. And broadcasters most definitively want another way of reaching consumers with their expensive programming, to halt the decline they are witnessing in their advertising revenues, to go alongside the experiments that are going on taking that programming to the internet. But all the converged operators are at the conference next door at TVoDSL, trying to work out a strategy to halt the erosion of their fixed lines services, or of fixed voice pricing, by using their broadband lines to offer TV and internet lines, while the pure cellular operators are preparing for what is a purely mobile event next week, the 3GSM conference confusingly renamed World Mobile Congress, where they can forget all about TV for the time being. How different this world is from the one occupied by a company like say Apple, where to get something done, all one has to do is convince one company, which has always been happy to have a revolution in thinking every now and then. In that environment the good ideas have to shout loudly, whereas in the world of European mobile TV, the good ideas have mostly collected dust and are mired in the silence of contemplation. The problem is simple. There are 14 or so technologies to choose from. For some you need to wait for a regulator to free up some spectrum, some come ready with spectrum, while others need none because they use cellular spectrum or existing TV spectrum. There are broadcasters that want to bring the experience to the handset or any portable platform, and the consumer case is proven (even if a lot of people don’t accept that). One researcher at the show pointed out that after thousands of interviews it was clear that once you let the public test proper mobile TV, they love it. The cellular operators just have to work out how to make money out of it, and the conference, in every presentation, had one of two themes, this essential one, of which is the right business model, about which few agree, and the constant cultural references to either cellular or broadcasting, which leave one side or the other baffled. ISDB-T is the biggest success in the world with 20 million 1 seg handsets shipped to date, says one voice. Yes but what’s your definition of success asks one speaker, that’s fine if you make handsets, but where’s the ARPU. The answer is that there is none, not yet but there is some advertising revenue share and cellular advocates talk about justifying the involvement in terms of reduction in churn, not any direct involvement with ARPU. Actually there is little evidence that churn reduces if you offer mobile TV on your cellular system, but there is starting to appear some evidence that if a rival introduces it, and you don’t have it, then churn will rise. It’s a tough business when companies have to introduce new features in order only to stand still. But while they tried to work out their differences in business models, each presentation also had an undercurrent that went a little like “My technology is better than his technology, my chip, architecture, spectrum is faster, cheaper, easier to work with that the last guy that presented.” That’s what you get when you have 14 or so separate technologies to choose from, an incumbent mobile TV technology that is cellular unicast streaming, which is a tiny business relative to cellular itself, and not growing very fast, but it costs cellular operators absolutely nothing. For instance Nicolas Chevalier, head of product marketing for mobile TV at Nagravision, took snide remarks at Nokia’s efforts in 18Crypt DRM, saying “Handset makers have little interest and little experience in security,” and added that security needed to be part and parcel of the SIM card that is in the handset, owned by the operator, not controlled by the handset vendor. We don’t think Nokia would argue. It’s largely changed its view on DRM during the past 12 months, and is working alongside Samsung on a OMA BCAST profile, so the man from Nokia Siemens, Stefan Schneiders, its head of mobile TV business development, just shrugged and left the room for that session. Much the same exchanges were witnessed when Alcatel-Lucent spoke about its DVB-SH service, with stage whispers referring to how expensive DVB-H is, despite being in much the same DVB camp, ushered in by the same standard. Jean Francois Ereau, strategic marketing director for Alcatel- Lucent described the company’s progress on two fronts, the ICO car TV services in the US called MIM, due out later this year in the US, based on DVB-SH, and the prospects of France, Poland, the UK and others in Europe which are all considering whether a DVB-SH implementation might be best because of regulatory hesitancy over spectrum (it has spectrum), and because of the low price of implementation. But Ereau went further than Alcatel has gone in the past, revealing that it agrees with Qualcomm and its MediaFLO design and has incorporated the outer Turbo code that leads to a bigger payload, and seems to mean that either twice as many channels as DVB-H can be delivered, or the costs can be cheaper still. When the DVB-SH idea was first put forward, the gains were said to be achieved by using a satellite, with a huge footprint, working with terrestrial transmitters, that due to the similarity with 3G spectrum, can be dropped neatly onto the 3G site and use the same cabling, the same power source, the same antenna, and not interfere at all with the 3G signal. But Ereau adds, “We get at least 3 dB of gain compared to a similar DVB-H site, but when you add spectral diversity, with two antennas into the handset, and combined multiple signals from more than one base station, along with gains from the turbo-code, it is closer to 6 dB.” Alcatel-Lucent is quietly building up its eco-system, and the new chips from Philips are now ready for sampling to go with those from DiBcom, in both Samsung and Sagem handsets. What Ereau will not talk about is the company’s progress in India, where the auction recommendation looks like it was written by Alcatel, or why it lost out on the bid to win the Chinese satellite contract to implement the CMMB STiMi mobile TV service there. The feeling is that in the US, Alcatel and ICO will sell just like the satellite radio stations, partnering car manufacturers, to create in car back seat video experiences, and this might pay for the satellite and the network. The car system will have four tiny antennas, and pick up signal at high speeds. From there the service can enter further markets by adding terrestrial repeaters, and its recent research in France with operator SFR seems to have borne out its claims that one out of every two base stations will need an S-Band transmitter, and that with spectral diversity, it can achieve in-building penetration to rival DVB-H in UHF. “We can also offer DVB-H in UHF if anyone wants it,” Ereau points out. Has nobody told Alcatel-Lucent that the European standard or mobile TV is DVB-H? There was more of this type throughout the conference, Qualcomm taking pot shots at ATSC M/H, which it says is years away, and repeating its claims that DVB-H is vastly inferior. The only technology for North America is MediaFLO it says. Nokia answered this by quietly confiding that it is involved with the Samsung proposal for ATSC M/H and that it thinks this will win, and create an unholy alliance between DVB-H and ATSC M/H, the nascent broadcasting standard that will include a mobile TV signal with the digital TV signal. We think that unlikely and if a Qualcomm proposal is adopted we could end up with the higher levels of MediaFLO being identical to ATSC M/H, and that becoming the all American standard from Harris, LG and Qualcomm. Nokia Siemens Networks was the only company that made any mention of MBMS at the entire show, despite Ericsson saying that it is ready for prime time during 2008, but Nokia took the tack that its Scandinavian rival is offering MBMS not for mobile TV, which it cannot support, but for “multimedia.” Most opinions felt that MBMS can only support 3 TV channels, and that DVB-H was the way to go. But given that its predecessor Cell Broadcast System, a vastly inferior broadcasting option in 3G is already supporting two TV channels at PCCW in Hong Kong, it is likely that a well tuned 3G system with MBMS will support a multicast of 6 or more high quality TV channels, enough if not to rival DVB-H, good enough to add to it to differentiate one cellular offering from another. Away from the tired arguments about the choice of underlying technology, even given that many cellular operators have not yet made that choice, there were other, more fruitful discussions about mobile TV. The hoary old chestnut about short form content was argued out yet again, with all the European experience using the virtually unwatchable cellular streaming services, saying that it was mobile attention span, not quality of video that drives video usage to just a few minutes a day – so short form content is essential. The fact that Japan has shown that sure, some shortform downloads are fine, but that 20 million of its residents will happily watch TV with no short form content, was largely ignored. “But the content in Japan on 1 seg is NOT the same programming that is on free to air TV services,” reminded Kelly Wang, of Taiwanese mobile chip designer Future Waves. “There is a lot of premium stuff there,” she said and went on to point out that the TV capability on a handset was used to differentiate services there, which are desperate to make money, given that the environment is far too competitive. Of course in Japan, while operators do not subsidize handsets, they frequently design them. Gary Levy of US based Telegent Systems, which designs chips that allow existing analog TV services to work on a handset, really set the cat among the pigeons, when he told the audience that his company had shipped 5 million handset chips in the last 9 months. The mobile TV world is full of chip companies that would kill for that level of sales, but none of them thought of changing direction to join Telegent. Levy made a persuasive argument that the existing TV networks are there, their networks are paid for, and that the cellular operator has to pay nothing extra to acquire handsets with these chips on, the handset maker could charge a premium for them, and the premium was more than the chips cost. Telegent had looked long and hard at prior failed efforts in the market, where 6 or 7 chips were thrown together to make a poor attempt at receiving TV signals, and claims it has achieved a battery life up to 6 hours, the picture reasonable, though not great, and highlighted the fact that only 750 million people over the next 8 years were likely to move to digital TV, while the rest of the world’s population would like handsets with Telegent chips on. They also support FM radio. Those 5 million devices have mostly shipped in China and the Middle East, and are purely retail sales, with no operators willing to take what is clearly a strategically weak, but tactically brilliant approach to mobile TV. At 250 mW constant power usage, compared to some chips which offer 20 mW for DVB-H, that 6 hour battery must weight a ton, and any kind of in-building penetration is unlikely on networks that were never designed to achieve it. In effect Telegent was the controversial light entertainment for the show. By contrast, Streamezzo, a French company that had grown up on streaming cellular TV, provided a breath of fresh air. It now has a client that can sit in the handset and peak at which DVB-H programs a viewer is watching, and use unicast services to deliver the right kind of advert which takes into account the viewers sex, age and spending and viewing habits, as well as rough location for regional advertising. The only problem is that the system would use up too much resource if it sent video adverts, so these are static ads on the edge of the video area, in a combined rich media screen. For video advertising, said Filip Glusak of UDCast, local splicing devices need to be dropped alongside the transmitters, a story he has been telling for the past two years. However he added one twist, in that it has a relationship now with IPTV addressable advertising start up Packet Video, which can add the demographic engine to its physical ad insertion technology, and suddenly we are back on that same old argument – what is the right business model? Glusak has one amazing slide. It shows that the cost of building a DVB-H network is so high that one business model, one piece of revenue alone, cannot pay for it. It needs a little monthly fee, it needs to lead to some interactive services which make sales, then addressable advertising needs to be added. Can you imagine someone having this discussion about the internet. “Let’s build a network and perhaps people will use it. Yeah but how will they make money out of it. Well if a lot of people use it, we could sell ads. We could sell books, games, DVDs, cinema tickets, films, anything. Okay will you pay for it? Can’t we all pay for it?” In the end all that has come about on the internet because a few entrepreneurs made very clear propositions, often leaps of faith, which became very popular, like Yahoo, Amazon, and later Google etc… But mobile TV systems that require entirely new networks, require bigger leaps of faith, usually from a broadcasting based consortium, and the business model they are happiest with is advertising, while everything else is free. Here at Faultline we back that. Build a mobile TV network and there is enough research, enough video quality, enough novelty, and enough money swilling around in the cellular community that it will vastly enrich the entire eco-system. And that enrichment will, in the end reduce churn, and help everyone, even the cellcos, make more money. But like the internet, it is not going to be a smooth and obvious ride. One of the other buzzes around the show was simply the world “China.” Even the usually tight mouthed DiBcom, which has been about as loyal to DVB-H only, as Nokia so far, owned up to having some dealings there with local chip suppliers, acting as advisors rather than building their own chips. Siano has already made one clear customer win, committing to the CMMB STiMi technology there through MP3 player maker aigo. DiBcom says that it is helping Lenovo improve its so far dreary performance in mobile devices there, although we’re not quite sure how the business relationship will work there. “Lenovo made too big a deal backing T-DMB,” said Kelly Wang of Future Waves, “and it could not get their phones to work with it.” T-DMB had a long standing trial, which she says is still going, sponsored by Samsung. “What people don’t realize is that there are 8 mobile TV standards in China,” it’s just that some of them are going somewhere. To the outside view STiMi is the only viable one, even though the Terrestrial TV standard DMB T/H pretends to be able to offer mobile TV, Siano privately told us, “It’s too complicated, it needs too much memory and the battery lasts less than 30 minutes. Everyone is clear that STiMi is the chosen technology now in China.” There were a spattering of regulators at the show, trying to gauge the mood of the community prior to making decisions about spectrum auctions in this year and next, by there was a paucity of operator personnel. A man from Orange turned up at one panel discussion, and everyone was gratified and in awe that such a mighty operator, who was clearly very interested in mobile TV was taking the time. But 30 seconds before the panel started he suddenly stood up and rushed off saying he was in the wrong place, and thought it was the IPTV discussion next door. And that just about said it all. Faultline both gave the full first day tutorial and chaired the first day of the conference. | ||||
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