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Mobile finally in gear

Last month, the ATSC announced the elevation of its Draft Document A153, Specification for Mobile Digital Television, to the status of candidate standard. However, it didn't happen soon enough for viewers of the estimated 100 million portable, battery-operated receivers that will soon go dark, victims of the analog switchoff.

However, the status of candidate standard is still progress, and there will likely be working demonstrations at the January Consumer Electronics Show. Major manufacturers plan to show concept products of handheld and in-car device implementations. The status will open the door to testing during the first quarter of 2009, and some manufacturers hope to see the test results fast-tracked so they can vote on a standard by NAB.

Sound aggressive? Perhaps it is by our old industry business model, but welcome to the digital economy. In Bill Gates' book, “Business @ the Speed of Thought: Succeeding in the Digital Economy,” his underlying postulate is that thanks to technology, the speed of business is accelerating at an ever increasing rate. Having joined the digital economy, the broadcast industry must position itself to compete in it.

Assuming there are no major bumps during the testing period, the ATSC should act quickly to adopt the new standard to assure a seat for broadcasters on the mobile/handheld train before it leaves the station. The cellular market — at close to 90 percent saturation — is running out of new customers to sign. That means that companies like Verizon Wireless, with 80-plus million subscribers, and AT&T, with 71-plus million subscribers, have to grow new revenue sources. They've already been successful at increasing revenue via data services, and their next target is mobile television. Verizon added a TV package to its V CAST service in 2007, while AT&T launched mobile TV last May. However, AT&T has an exclusive equipment franchise with Apple's iPhone, and because of the phone's popularity and a new second-generation 3G model, several companies are working on unique TV service clients. With TV subscriber penetration at less than 5 percent, wireless companies see a landscape rife in new revenue opportunity. But do the wireless carriers represent competitors or service partners?

Mobile TV business model

Therein lies the fundamental question for the broadcaster: What's the mobile TV service business model? Clearly, the cell phone is but one device for the distribution of TV entertainment content. Aforementioned in-vehicle services, laptops and other Wi-Fi or Internet-enabled devices, or even new dedicated RF signal receive devices, all potentially come into play. Only the latter, however, replicate the analog TV portable reception model.

Let me offer one business model concept. The multiplicity of distribution platforms would seem best served by a subscriber-oriented service model where local broadcast content is aggregated with both basic and premium cable network content. In addition to entertainment, some broadcasters already offer dedicated local weather and area traffic channels — content that would be of particular value to mobile viewers. The result could be a tiered subscription service with varied bundles of program and information content. Given the potential for advertising content uniquely designed and formatted for a mobile service, a basic local channel tier could be advertiser supported and offered for free.

Being more akin to a cable TV-type service, this model transcends the current business infrastructure of most local broadcasters. Within that context are perhaps the underpinnings of a partnership between broadcasters and cable companies, one side bringing local content and the other access to national cable networks and a subscriber billing infrastructure. Obviously, there would be a myriad of details to work out, not the least of which are rights management and content distribution restrictions. This is just one business model. Another approach might be that local broadcasters form a mobile service local marketing agreement.

Work remains to be done

Currently, there is no true working business model, and developing one is not an inconsequential task. Last year, the industry formed the Open Mobile Video Coalition (OMVC). The coalition's charter speaks to technology, standards, product development, and promoting and educating mobile TV's benefits. That's not enough. Without a compelling business model, broadcasters will play a bit part as a minor content provider in a market that research firm Screen Digest projects worldwide at 140 million subscribers worth $6.5 billion in revenue by 2011, with North America representing $2.6 billion of that total.

As the process to adopt a mobile/handheld technical standard is fast-tracked, equal progress needs to be made on the business side for broadcasters to truly take advantage of the standard.

Anthony R. Gargano is a consultant and former industry executive.

Send questions and comments to: anthony.gargano@penton.com