Commentary
One More Time: Mobile TV Is a Tough Sell to Everyone
- by Steve Smith , Staff Writer @popeyesm, November 22, 2010
Don't get me started. When news hit last week that a consortium of broadcasters planned to equip 20 major markets to service mobile digital TV, commentators reiterated that old dream of "TV in your hand." The Mobile Content Venture claims it will cover almost 40% of the U.S. population with free-to-consumer digital channels to their phones by the end of 2011. As someone who has tested and covered the jagged, mostly unsuccessful roll-out of live mobile TV service for several years, who has had this capability on a number of review phones I have covered around for months at a time, all I can say is -- good luck with that.
Well, there I go. You got me started. This is going to be a two-day rant. Today, why you shouldn't hold your breath for this one.
My colleague Wayne Freidman covered the plan last week, so I won't belabor the details.
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Bottom line is that major markets will have their live local TV signal broadcast to compatible handsets. Wireless spectrum has been dedicated to this effort and it will not use the 3G/4G wireless networks that currently drive carrier content. Instead, these signals will run parallel and come to the handset via a dedicated ATSC Digital tuner in the phone. One research firm the group quotes project 30 million such handsets in market by 2014.
Before we even get to the use cases surrounding mobile TV, there are a number of sheer business hurdles to overcome. Foremost, how do you get the hardware OEMs and carriers on board a scheme that potentially takes user attention and potential revenue away from their core businesses of voice and data? If free mobile TV is going to be driven by advertising and the mobile phone platform will be its transportation device, then carriers will need a sizable cut of this. For the last few years the smart phone and app phenomenon that Apple helped initiate has eroded carrier influence and re-routed the business models away from these operators. But Verizon, AT&T, Sprint and T-Mobile at least were selling the handsets and the data plans. The carrier still could sell the data plans and had a vested interest in broadening use. The early failed attempt at mobile TV from Qualcomm's FloTV project worked on a subscription plan that promised to $15 or so a month to a user's bill, but carriers were abysmal at (or uninterested in) merchandising the service.
Ultimately carriers and handset OEMs work together to create hardware and business models that satisfy both. Aside from a passing mention of working with "various OEMs and device manufacturers to ensure these devices are available in the second half of 2011," no specific hardware manufacturer or carrier was quoted in the press release supporting the effort. Damn straight they didn't. Because someone at both links in the service chain will have to do the math on this one. They will need to figure out what returns the carriers and OEMs get from a scheme that is supposed to gush ad dollars to someone and redirect mobile users perhaps from the voice and data cash cows both segments of the mobile economy spent years creating.
This DTV mobile project has been in the process of becoming for years, and it has been marked by delays from the start. To be fair, the sign-on of major broadcasters in the MCV group is more encouraging. From Gannett to Hearst, NBC to Cox, Fox and NBC, there is some weight behind this. But there are some notable absences here as well. Such consortiums of major providers were also supposed to give us all WiMax everywhere by now, let alone similar co-ops that have been assigned to creating standards for digital tablet magazines and even seamless control of DVRs from handsets. And more to the point, these updated handsets have to work their way into a mobile hardware ecosystem that runs on 18-month to two year cycles. Currently many people are signing new contracts with carriers and updating to smart phones. DTV likely has to wait for another cycle, and even then has to make a case for live TV to consumers let alone OEMs and carriers.
And then there is the actual use case for mobile live TV and the difference between having the service and actually using it. But let's take that one up tomorrow.
Steve Smith is Editorial Director of Events for MediaPost
Scratching my head here. Seems to me that a lot of people are watching programs downloaded from the net. Why would they add another $15 to their bill unless they are news junkies? And even the news junkies get live news via Wifi. $15 seems to much of a stretch, but that's just me.
One major failure in your analysis: Mobile does NOT equal CELLULAR
This might be accurate if MCV and the local broadcasters wanted to put their programming on cell phones. Instead, there are a large number of devices that are compatible including tablet computers, netbooks, laptops, vehicle systems, portable media players, etc.
Plus, the programming is going to be offered at no charge to consumers.
The beauty of this system is that is uses a business model that has been successful for over 70 years: advertiser supported programming provided over the air at no charge to the user. The value is that everybody knows how it works: consumer product manufacturers, advertisers, program producers, networks, local broadcasters, advertising agencies... this is business as usual for everybody in the value chain.
The problem with cellular TV options is that there were so many new people in the mix and so many other people who needed to get paid that nothing happened.
Posted on November 22, 2010 by Peter Tannenwald
Another view on the FCC’s efforts to repurpose broadcast spectrum for broadband-only use
FCC Chairman Julius Genachowski’s Op-Ed piece in the Washington Post shows his exceptionally energetic devotion to making broadband available to all Americans. But his perceptions of the need for broadband and how to meet it are both misguided and backward-looking.
No one disputes the importance and value of broadband in education, health care, and economic growth or the Chairman’s devotion to improving broadband access. But it does not follow that all broadband must be wireless or that TV services must be curtailed, stifling innovations like HD, multiple program channels, and 3D. On the contrary, if it will be possible at all to satisfy the seemingly insatiable public appetite for wireless services within a finite amount of spectrum, the best, if not the only, way to do it will be by marrying broadcasting and broadband into a combined service.
That means promptly unleashing broadcasters from today’s TV technical standards, which the FCC can do on its own, with no Congressional action. Freeing broadcasters from technical constraints will produce a much faster and more effective broadband result than the Chairman’s spectrum “repurposing” plan. In other words, the question is not whether spectrum should be used for broadband OR broadcasting, but whether and when the FCC will allow it to be used for broadband AND broadcasting.
The FCC must plan for spectrum use based on the technology of the second decade of the 21st century, not the first decade. Let’s leave aside for now the question of whether most of the escalating demand for wireless capacity is driven by socially useful needs or by entertainment and gaming. Few would dispute that if the demand curve continues rising rapidly, and we stay with today’s technology, there is not enough spectrum to go around, even if we use all the spectrum in the universe for broadband. Wireless companies know this. They are building wi-fi into their new smartphones to drive as much traffic as possible off their cellular networks. Verizon has indicated that it will introduce a television broadcast component into its future LTE system, knowing that it cannot meet video programming demand on an individual session basis.
The principal cause of the shortage problem is the architecture of first-decade technology, where each user’s request for content generates a separate digital stream in response. One way to solve the capacity problem is to drive more traffic to wired systems, a seemingly unpopular option with the unwired generation. Another is to deliver frequently used content only a few times instead of every time viewing is requested. That is exactly what broadcasting does: it efficiently distributes content over a stream that occupies the same amount of spectrum no matter how many people use it. The only thing that is different about today’s demand for video content is the desire for time-shifting, which is becoming easy to accomplish, without using more spectrum, by storing and replaying content in the user’s device. That is what DVRs and advanced set-top boxes do today, with cellphones and portable tablets not far behind.
Each TV station has 19.4 megabits of digital capacity, which can be used to provide both broadcast and non-broadcast services under today’s FCC rules. Moreover, broadcasters must pay the government 5% of their non-broadcast digital revenues, providing the public with an ongoing perpetual financial benefit instead of one-time auction revenue, which is a flash-in-the-pan. Some tens of billions of auction revenue dollars may make the government budget look nice for a year, but it will be worthless to future taxpayers and will mean that you and I will have to pay for the bids through higher priced wireless services. Even a competitive marketplace does not sell services below cost for long.
It turns out, though, that today’s ATSC digital TV standard is a poor choice for maximizing the use of digital capacity and is unsuitable for the two-way communication that broadband users expect to have available. Other technical systems, well known to engineers today, can do the job much better and will allow multiple TV broadcast channels streams to be offered for everyone to view along with broadband services that fill content requests from individual users. Up-to-date digital standards will not render today’s digital consumer TV sets obsolete, the way the final DTV transition in 2009 rendered analog sets obsolete. When you start and end with digital content, translating one format into another is much easier and cheaper than translating a digital signal into something an analog set can use.
A favorite mantra of government regulators when they do not want to do something is that they must be careful to avoid “unintended consequences.” For all the good things broadband does, it also has been an enormous engine for pornography, fraud, privacy invasion, and many varieties of cyber-crime, to say nothing of turning our children into keyboard punchers who are not learning critical face-to-face interpersonal relationship skills. But leaving aside whether the FCC should take responsibility for the sociological consequences of its actions, there are also important industry structural dangers in the FCC’s relentless drive to truncate television spectrum.
The FCC has emphasized the benefits of broadband on the consumer side, but it has neglected the supplier side – participation in the provision of services rather than just using them. If some TV stations are shut down, the stations most likely to fall first will be small businesses, minority owners, and stations which program to other than the lowest common denominator mass audience. They may drop out because of the temptation of money from an incentive auction or because the FCC tightens the squeeze with new regulatory fees and other regulatory burdens and drives them out of business. Broadcast ownership will become more concentrated, notwithstanding concerns repeatedly voiced by FCC Commissioners about lack of diversity in today’s media marketplace.
With over-the-air viewing options reduced, TV will become more and more an all-pay commodity, and everyone will have to pay the ever-increasing cost of cable or satellite services, including renting or buying set-top boxes for not just one but for every receiver in the home. Moreover, auctions will drive spectrum into the hands of the largest wireless companies, because they are the wealthiest, though they have already accelerated wireless ownership concentration during the past decade and have generated complaints from rural areas about poor service and lack of access to the newest handsets.
In other words, although there is much professed concern about today’s ownership concentration levels, the real long-term legacy of the current FCC’s plan will be the greatest increase in concentration of ownership in both the media and wireless industries that the nation has ever seen.
Only the Chairman and the other Commissioners can provide the leadership needed to produce results that will truly increase spectrum efficiency. They should unleash free market forces and let you and me vote with our purchases to decide how and when spectrum will be repurposed instead of doing it by government fiat. Unfortunately, access to the ears of the Commissioners is dominated by the largest companies like Google, Microsoft, Comcast, Dell, Verizon, and AT&T. Those names appear almost every day on FCC-published lists of ex parte presentations. Their financial resources enable them to out-lobby potential market entrants with new ideas by 10 to 1 if not 100 to 1. That makes it very difficult for new start-up voices to be heard at the top level of the agency.
The current FCC has said over and over again that it wants its decisions to be data-driven; yet the government’s spin machine is in full swing, through articles, speeches, and panel discussions with carefully chosen participants. The goal is clearly to persuade the public that TV spectrum reallocation is the only hope for the future of our society. This premature announcement of the regulators’ conclusions, before a formal rulemaking has even been started, has already scared capital away from the development of new and better ways to use spectrum for both broadcasting and broadband at the same time. Once again, our future is being turned over to the largest corporations, vastly reducing the likelihood of competitive innovation by newcomers who might have the best chance of really unleashing the potential of radio spectrum.
It has always been difficult for the FCC to lead the way to truly new technology rather than adjusting regulations to accommodate what has already been developed. Today’s FCC shows no signs of breaking free from that history. It has already taken action that forced one innovative spectrum developer to suspend operations and seems determined to freeze the status quo and keep others out until its preconceived program can be implemented.
The way to accelerate the availability of wireless broad service to the public, without the need for a long political process, is not to “unleash” inanimate spectrum as much as to unleash the companies that are now using spectrum by removing technological straightjackets. These diverse companies, including small and locally-owned businesses, are more likely to start broadband service sooner and provide more new jobs and new ideas than the FCC’s plan to allow the largest and wealthiest corporations to concentrate control over the spectrum resource that is supposed to belong to the American people.
David I actually agree with you that the best hope for DTV is non-cellular devices. But I don't agree that non-cellular devices will likely be the first push for DTV. From the beginning they have aimed at handsets first. This is whay the DTV folks have always led with. None of these devices, whether handsets or laptops and tablets are "compatible" until MCV gets the chipsets into these devices. That alone is a hurdle. I suspect that in-car devices are the best situated to adopt this first.
As I write tomorrow. I am not so sure that with a broad range of devices and use cases, throwing the same broadcast and business model at it that everyone has known for 70 years is the best idea.