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Television tailored for mobile phones

By Eric Pfanner International Herald Tribune August 8, 2005

LONDON---Fans of the German soap opera "Gute Zeiten, Schlechte Zeiten," which translates as "Good Times, Bad Times," used to have to wait until evening to watch the show on the RTL television network. Now, if they have the right kind of mobile phone, they can catch the daily series on a cellular screen as early as 1 o'clock in the afternoon. And they don't have to hang around in their living rooms to do so.


Half a century ago, the invention of the transistor radio untethered the sock-hop generation, letting them bop to rock 'n' roll beats at the beach. Now mobile phones promise to do the same thing for television. The question for mobile phone makers and operators, media owners, regulators and other interested parties is whether there are enough die-hard soap opera addicts out there to make any money from mobile TV.


"The concept of TV is so familiar to people that it has captivated a lot of people in the industry," said Jessica Sandin, principal analyst at the research firm Informa. "But the jury's still out on whether there is a market for this."


Informa predicts that by 2010, 291 million people worldwide will use mobile video services, up from about 53 million this year. For now, however, most of those people are getting only short video clips; only a small fraction are watching anything that remotely resembles live television.


Before true mobile broadcast services can take off, a number of questions have to be answered: Which of at least five delivery methods, ranging from cellular technology to mobile broadcasting via separate wireless frequencies, works best? How will the relationship between television content providers, channel owners and mobile phone operators evolve? What kind of programming, if any, do mobile viewers want, and how much will they be willing to pay for it?


In a number of countries, mobile phone operators have begun fledgling services offering a handful of television channels or other video streams via the so-called third-generation phone networks. In Germany, for instance, Vodafone, the world's largest mobile operator, is sending out the soap opera via 3G; other mobile operators, from France Telecom's Orange subsidiary to Sprint PCS in the United States, are also using cellular networks for their television-like offerings.


Delivering video via cellular networks provides some advantages, particularly for mobile network operators. Some of them spent billions of dollars on 3G networks, and they are eager to develop video services as a way to generate revenue to pay back the cost of the licenses and infrastructure for these systems. Because 3G networks are essentially a wireless version of the Internet, they could easily be used for video-on-demand or interactive services.


Deborah Tonroe, head of commercial development for Orange UK, which started a 3G-based television service in Britain in May, said cellular might turn out to be the best delivery method for mobile video. In contrast to the German soap opera, many mobile content offerings now are what Tonroe called "boredom busters," short snippets designed to kill time, while waiting for a bus, for instance.


"We don't necessarily envisage that people will sit down and watch two hours of content on their mobiles," she said.


Analysts say, however, that the cost of delivering video content via cellular networks could prove to be a turnoff. Orange's service in Britain, for instance, costs £10, or $18, a month, yet average revenue per user from mobile data services is only a small fraction of that amount. Cellular networks also might not be able to provide the variety of services that television viewers have come to expect from traditional pay-TV services.


That is why some would-be mobile television providers are backing other technologies that more closely resemble conventional television, beaming out signals to mobile devices via separate blocks of broadcast spectrum. Mobile phones can be equipped to receive both cellular calls and TV broadcasts on different frequencies.


So far, this commercial application of such technology has caught on most rapidly in South Korea, where an affiliate of SK Telecom has attracted about 100,000 users to a mobile TV service that is broadcast using a format called DMB, or digital mobile broadcast, which is similar to the country's digital radio technology.


Now Virgin Mobile, a "virtual" operator that markets mobile service using the T-Mobile network, has started a test of its own television service, using a technology similar to the Korean DMB standard.


Initially the service, in partnership with the telecommunications company BT, will offer three TV channels, including an entertainment offering called Blaze; 50 digital radio channels will also be available. The pilot version of the Virgin service is available only to customers in the London area, but the company says it plans a full introduction by early next year. Alison Bonny, a spokeswoman, said subscribers would be attracted to the familiarity of mobile television, in contrast to newfangled 3G services like video calling.


The fact that the Virgin service will be available across most of Britain should add to its appeal, Bonny said.


"Everyone has a mobile, everyone has a television," she said. "You don't need to know a lot of jargon to understand how it works."


But several other competing standards for mobile broadcasts are emerging. In the United States, the technology equipment provider Qualcomm backs a system called FLO and aims to build a nationwide network.


In Japan, analog mobile broadcasts have been available for several years, and operators are supporting a separate digital standard.


In Europe, yet another system, known as DVB-H, for digital video broadcast-handheld, has gained adherents. It is backed by the world's biggest mobile phone manufacturer, Nokia, and combines many of the best features of cellular and DMB technology, analysts say. It uses Internet protocol technology to transmit images, offering extremely high speeds and capacity, potentially at a lower cost than cellular-based services. But getting there could be costly, because large-scale DVB-H broadcasts would require setting aside wireless frequencies and building new networks.


Given the billions of euros and pounds that European telecommunications companies spent on 3G licenses, with a limited response to the services so far, "it's unlikely anybody would be brave enough to put their foot forward until policy makers have allocated the spectrum," said Terry Howard, head of media business development at Arqiva, a broadcast transmission company that hopes to build a DVB-H network throughout Britain.


To assess consumer interest, Arqiva, along with O2, a British mobile phone operator, plans to start a six-month trial of a DVB-H system in Oxford next month, involving 500 mobile phone users. They will have access to 16 television channels, including the BBC, CNN and the Cartoon Network, as well as a tailor-made service called Shorts International, which will provide 10- to 15-minute films.


Meanwhile, expectant eyes are on Vodafone, which has brought out mobile video and television offerings via 3G technology in a number of countries. The company has said it wants to tailor its content for on-the-go users rather than trying to replicate the ambiance of the living room. In some cases, it says it will seek to commission content directly, perhaps bypassing the channels that act as the principal gatherers of programming for traditional television.


"I think there will always be a relationship with the programmers," said Graeme Ferguson, director of global content development at Vodafone, but he added: "Are consumers buying channels or are they buying programming? I think programming."


Some mobile operators, including Orange, are generating mobile content in another way, working with companies like MobiTV, which gather programming from TV channels and other sources and tailor it for the cellphone. One of the issues they have to deal with is mobile broadcast rights, a tricky issue when it comes to catalogues of programming created long before cellphones even existed. In some cases when channels are offered to mobile users, certain television programs have to be blacked out of the schedule.


As for television channels, they are eager to stay in loop as the prospect of a new way of viewing emerges.


"Whatever the business, consumers are attracted to trusted brands," said Phil Lawrie, vice president for commercial distribution at Turner Broadcasting System Europe, the Time Warner division that owns CNN, the Cartoon Network and other television channels. "The mobile content space, and mobile TV in particular, is no different."
 
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