Satellite operators that broadcast television content soon could see a new market for their services–facilitating the delivery of broadcast content to mobile phones and other portable devices.

Already, TU Media Corp. in South Korea has deployed a service that feeds satellite television signals directly to mobile phones. At the National Association of Broadcasters annual conference in April in Las Vegas, SES Americom announced that Crown Castle Mobile Media leased Ku-band capacity on Americom’s AMC-9 satellite to facilitate the delivery of satellite television to mobile phones and other portable devices (SN, April 25).

But what could yield a significant amount of information on the potential market opportunity for delivering broadcast content to mobile phones is a trial that U.K.-based media solutions provider NTL Broadcast and wireless network operator O2 will launch in September.

The trial involves about 400 users in Oxford who will be using the television service on mobile phones supplied by Nokia over a six-month period. The results of that test will be instrumental in determining the future of television to mobile phones at least in the European market.

“What we are trying to do is test the overall proposition of mobile TV,” Terry Howard, head of media business development at NTL Broadcast, told Satellite News. “Last year we went out and conducted market researched with 450 consumers representing the mobile carrier base in the United Kingdom to determine what they thought of mobile TV and what sort of channels and brands they expected to be on the service.” From that, NTL learned “there is a substantial market for mobile TV,” Howard said. “It is on the same magnitude as broadband Internet.”

Short Programs

The early results of the market research yielded some interesting results, which NTL applied to the program lineup it will offer trial participants.

In particular, NTL learned that potential subscribers to a mobile television service are not interested in watching feature-length movies. Rather, research data revealed that users are interested in keeping up-to-date on breaking news, as well being entertained for short periods of time while eating lunch during a break from work or commuting.

Potential subscribers are looking for options that fit into “10 to 30 minute bite-sized chunks” of programming, Howard said. “That tends to lend itself to cartoons, news, comedy and sports. So it is no surprise that those are some of the channels that we announced fit into those categories.” The first batch of channels announced as part of the trial include the Cartoon Network, CNN, the Discovery Channel, Sky Sports News and Sky Travel.

And while the use of the service outside the home seems to be common sense, Howard said it was “interesting” to learn that potential subscribers also would use the service within the home. To that end, “One of the things we will track in the Oxford trial is the potential cannibalization of other media consumption,” he said. The trial also will track how the trial participants use the service, from what they select to watch, when they watch and how long they watch it for.

“We will get an excellent of who is doing what and when,” Howard said. “We also collect information on where they use it.”

Challenges

Assuming the trial proves to be a success, the rollout of services in the United Kingdom will not be an easily traveled road. The first hurdle that potential mobile TV operators will need to overcome is getting the spectrum necessary for the service.

“We firmly believe in the U.K. is that spectrum is paramount,” Howard said. “Spectrum is scarce as it is most of the European countries but specifically in the United Kingdom. There are pockets of spectrum that can be used for services such as this and we are hoping to use this trial to inform various decision makers including (U.K telecom regulator) Ofcom [to encourage the] freeing up of spectrum.” He suggested the service will need enough spectrum to cover about 20 to 30 television services.

Howard also pointed to another major challenge that will need to be addressed–digital rights management. “We are looking at a pay-TV proposition,” he said “What is important is to safeguard the content in terms of conditional access and ensure that you repatriate content royalties back to the content community. We are talking about high value brands in the pay TV world, so [content providers] would expect that technology platform to be in place.”

Handset availability, on the other hand, is not a concern for Howard. “In terms of handset availability, clearly if there is a demand, the handset community will get behind it,” he said.

Educating Markets Is Key

One thing that will be key to getting the public to adopt this technology is education, Neil Strother, senior analyst at market research firm In-Stat, told Satellite News.

“The industry better make sure that they don’t run away with their own hype and drink their own Kool-Aid on this and try to push something on a market that isn’t quite ready,” Strother said “They need to do, if not a better job, at least start doing a job seeding the educational side of this. I think it is early enough that people have heard about it but they are skeptical because there really is no pricing model. I think there is a lot of skepticism in end-users and mild interest. What has to happen is the industry has to a better job of educating [potential users] why this is a good thing and why the would want to try it.”

Strother also expressed cautious optimism over the prospects of television services on portable devices, suggesting that certain markets, particularly those with high population concentrations and quality mass transit systems will likely be among the geographic areas where this service will take off first. For example, Strother suggested the TU Media deployment has a good chance at being successful.

The Korean market “is fairly unique,” Strother said. “I think it has a better chance because it is a smaller footprint country geographically. You essentially have one major city of between 15 million and 17 million people, depending on how big you slice Seoul. It is a very highly concentrated metro area [with] a pretty good [mass transit] system so people have time when they are mobile and not driving. And it is a highly gadgetized society and fairly affluent by Asian standards. But even the numbers I have seen aren’t overly aggressive early on. It will have a shot there because it is a definitely a different kind of an urbanized setting.”

And that level of urbanization will likely translate to the United States and other areas in terms of the success of mobile TV services.

“If you look at most of the U.S., it probably is going to be a bigger hit on the East Coast in major cities where you have good mass transit, as well as cities like Chicago and maybe in the [San Francisco] Bay area where there are a lot of [technology-savvy] people,” Strother said. “That rapid transit-type user is not insignificant but it is not a majority by any means.”

But that is not to say it will not catch on in other areas if the service becomes more widely available. Strother compared mobile TV services to the penetration of camera- enabled mobile phones. “Camera phones came in and people didn’t want them but they got them and now they are everywhere,” he said.

–Gregory Twachtman

(Neil Strother, In-Stat, 425/827-7150; Bruce Randall, NTL, +44 (0) 1962 822582)