Mobile TV and video is predicted to be one of the fastest growing segments of the mobile communications industry. No wonder everyone is piling in to get their share of the loot says Peter Purton.

If you want any evidence that video and mobile TV are the next wave in the mobile business, just look at the companies receiving venture funding.

In the six weeks to 31st August 2007, over $300 million was raised in funding rounds for start-up companies in the wireless arena and mobile TV and video was by far the major area of focus, according to Silicon Valley based start-up accelerator Global Startups. Some $124 was million invested in the sector’s startups ranging from creators and manufacturers of the enabling and enabling technologies such as Petaluma , California , based video chip technology specialist Dilithium to creators of applications such as Israeli video ring tone company Vringo.

Even when the investment money flowed to other mobile sectors there was often a video component. A good example of was Santa Monica based Transpera’s mobile social video platform. That money would have been categorized as social networking in the funding breakdown. But it could have just as easily be regarded as mobile TV and video.

According to Jupiter Research the compound annual growth rate of sales income for mobile video content and TV streaming services is expected to be 17 per cent through to 2010, easily outstripping both the growth rate and the value of any of the other mobile content categories. By 2010, in Europe alone the mobile TV and video market is expected to be worth some €2.2 billion.

“Video is the way ahead” says Falk Müller-Veerse, managing partner of Munich based   Cartagena Capital. Web 2.0 is driving demand for mobile video sites and services, he says. And there have been high investments in mobile TV technologies such as DVB-H, DVB-SH, MediaFlo and MBMS/3G.

Add to this the involvement of major brands such as YouTube, the rise of IPTV in the fixed networks and the growing popularity of video related consumer behaviours such as video blogging, accessing video content from servers, video sharing and generating video content and it is easy to see where the excitement amongst investors is coming from.

It may come as a surprise, therefore, that the idea of mobile TV is not that new. In fact, the first plans for mobile TV service go back as far as 1996 when German broadcaster RTL trialled a digital transmission based service on public transport systems in Cologne . By 1998 Japan approved the ISDB-T specification, another digital broadcast standard designed to support mobile terminals. And in 1999, the Singapore Broadcast Corporation (SBC) introduced TV Mobile, another digital broadcast service aimed at user of public transport.

But none of these services were initially designed to support mobile phones, one of the fundamental problems being that they placed high current drains on batteries making commercial mobile phone based services impractical.

Solving the battery issues were at the forefronts of the minds of the creators of Europe’s DVB-H standard, Korea ’s Digital Media Broadcasting or DMB standard and US company Qualcomm’s MediaFLO specification. Japan ’s ISDB-T specification has also been revised to cut current consumption.

These services are now beginning to reach the consumer. In May 2005 South Korea became the first country to launch digital TV broadcasts direct to mobile phones using its DMB standard. Today South Korea still leads the world in terms of mobile TV usage with around 8 million DMB-enabled mobile phones in use in the country.

South Korea is not alone. Also in 2005 a number of  mobile TV services launched around the world using Internet streaming or video downloading over mobile phones’ regular data connection. In fact to date there have been over 170 mobile phone specific TV services launched globally, the vast majority (over 150) using the phones’ Internet connection. But things have not always gone smoothly.

“Mobile TV got off to a good start but future is less certain now,” says Will Strauss, president of Tempe , Arizona , based high tech consultancy Forward Concepts. The initial fast rollouts of DMB in South Korea and DVB-H in Italy have plateaued, he points out.

Some services have even closed. In the UK, for example, Virgin Mobile was forced to withdraw its  mobile television service, launched October 2006, when its technology supplier, BT Movio, said it was pulling the products due to lack of support from the industry.

Commenting at the time on the decision to quit the arena, BT said that the decision was primarily down to disappointing sales. It was well-known, however, that sales were particularly hampered by a lack of compatible phones – only one was ever launched, the Lobster from Taiwanese maker HTC. But the decision of the European Union to back rival technical standard DVB-H was also a factor, he added.

It was a fine example of an ecosystem problem, says Antony Rix, senior consultant at independent technology development and licensing company, The Technology Partnership. This is one business were individual companies cannot go it alone, he adds.

There are also remaining technology issues. While improved, the battery issue is still not solved, says Forward Concepts’ Strauss. “The more features we add, the more we drain the battery,” he adds.

Indoor coverage is also an issue. 3G mobile phones in particular, face indoor coverage issues and Andy Tiller, VP marketing at Cambridge based femotocell maker ip.access points out, “35 per cent of mobile TV is watched indoors.”

Despite the occasional stumbles along the way, few doubt, however, that mobile TV will be big in the long term.

Network maker Ericsson recently surveyed mobile TV consumers across the world and found a generally positive reaction so far. Although the company is keen to point out that the survey was by definition a survey of early adopters and that may skew some of the findings, some of the insights include:

-users watch 102 minutes of mobile TV a week with the French watching the least at 69 minutes and the Koreans watching the most at 159 minutes per week

-average spend by mobile TV users globally is €14 per month, but there are large deviations from country to country with Italian mobile TV users, for example, spending  four times more than their Japanese peers

-highest usage occurs between 6pm and 10pm

-male users accounted for 70 per cent

-they are predominantly 15-34 years

-most started watching out of curiosity

-on average, each mobile TV user has three friends using the service

-the most popular items are music (45 per cent), news (40 per cent) and sports (37 per cent)

-although at home this changes to sports (37 per cent), music (34 per cent) and news (32 per cent), closely followed by movies (26 per cent)

 

> class=MsoNormal style="MARGIN: 0cm 0cm 0pt" -viewing times range from 16 – 35 minutes per occasion

-Japanese mobile TV users don’t tend to watch during commutes – their UK peers do

-viewing quality – related to bit rates and terminal capabilities – have a significant impact on usage

-the way consumers are charged for their services has relatively little effect on viewing time although those who pay monthly subscription charges watch 20 per cent more than those who pay per view per day

-if users could choose, almost 60 per cent would prefer to watch mobile TV ‘on-demand’

-there is strong evidence that personalisation will be critical to driving subscription to and usage of channels and content

-personal video recorder (PVR) features such as being able to halt a programme and come back to it later, are highly desirable

Thomas Werner, head of applications at Ericsson rival Nokia Siemens Networks, estimates that there were already 1.3 million mobile TV users in the UK by the end of 2007 and that by 2011 this figure will grow to 10.2 million. Then the technology will be set to receive a huge boost – in the UK at least – by the hosting of the Olympic Games in London . By the end of 2012 he expects there to be over 13 million UK subscriptions to mobile TV services.

Werner believes the growing availability of IPTV on fixed networks will also be a big boost for mobile TV. “The building blocks are the same,” he points out.

Only time can tell for sure, but the omens for mobile TV are good.