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Mobile TV: $2 Billion in Ad Buys

Monday morning’s Open Mobile Video Coalition breakfast drew a packed house that had the feeling of a gold rush as the take-away information of the day was the estimated $2 billion in additional advertising revenue broadcasters can expect to harvest from broadcasting mobile TV within their DTV channel spectrum by 2012.

In a status report on the business side of OMVC developments, Media General Broadcast Group Senior Vice President Jim Conschafter not only delivered the $2 billion estimate but listed the three advantages broadcasters have over mobile TV competitors: the fact they have local news and other content mobile TV consumers want; that their cost of additional infrastructure for the service is relatively small; and that broadcasters already have a relationship with advertisers.

Conschafter pointed to several needs for the future: “We need device makers to make receivers, we need service operators to bundle our television signals in and we need retailers to sell devices.”

On the technical side, Cox Communications Vice President of Engineering Sterling Davis pointed out that that the OMVC has been working with the ATSC on a series of trials to finalize a mobile video for broadcasters by the end of the year so that mobile TV broadcasting in the DTV signal can begin at the same time analog TV shuts down.

“This series of trials that the ATSC called for as a demonstration of viability on IDOV has yielded preliminary results and we are on-track to make a final report to the ATSC by May 15,” he said.

He said preliminary findings are positive so far. “Both high-VHF and UHF reception is feasible, [as] mobile reception is received as much as 41 miles from the transmitter, and mobile transmission does not interfere with normal digital broadcasting.”

MSNBC host and executive Dan Abrams moderated a Q&A session with the entire OMVC committee, and among the questions were whether adding a mobile service will bring on a digital rights nightmare as the license fees paid for sports and other events and programming need to be renegotiated.

“If [mobile TV service] is a success, everybody will make money,” responded OMVC President Brandon Burgess, who is also chairman and chief executive officer for ION Media Networks.

It was also opined that in addition to cell phones, that laptops will be used as viewing devices in the initial phases of mobile TV, because of their larger screen size and longer battery life. And as consumers demand mobile TV reception, the fact that most cell phone users replace their handsets every 24 months could foretell a rapid ramp-up in mobile TV capable devices.

In addition to the $2 billion in ad revenues, it is expected that other business models such as conditional access subscriptions could bring in other monies. Once the service is up and running, it was suggested that services not even thought of today will begin to evolve.

Burgess called for broadcasters to become involved in the OMVC activities, pointing out that by becoming members they can have a say in the outcome. ©2008 NAB