OMVC concurs with NAB study; mobile digital TV service could generate billions

On Feb. 4, the Open Mobile Video Coalition (OMVC) endorsed the findings of an NAB study that identifies and quantifies potential advertising revenue that could be generated from mobile digital television services.

The alliance, which consists of more than 800 U.S. commercial and public broadcasters, also noted that the NAB study doesn’t include other possible revenue streams, including subscriptions and VOD services.

The NAB study assumed in its base case that a single mobile digital television standard will emerge by February 2009, but also examined scenarios in which the standardization process is delayed beyond 2009, and in which a standards war among multiple proponents occurs.

In the base case, advertising on mobile DTV would generate $2 billion in revenues, of which $1.1 billion would be accrued by broadcasters, providing the industry with an estimated $9.1 billion in incremental market value. But the study also concluded that each month of delay in determining a single standard would cost broadcasters about $50 million in revenues and more than $200 million in valuation. These figures include only cash flows from advertising-supported services and do not quantify the value of subscription-based services.

A delay in deployment beyond February 2009 “may harm the potential benefit to broadcasters by far more than the $200 million per month estimated by the NAB,” an OMVC statement said. Such a delay could “cause irreparable harm to the mobile broadcast business,” said OMVC chairman Brandon Burgess.

The OMVC will be conducting technical trials and consumer trials in 2008 to prepare for a launch of services in February 2009.

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View the Open Mobile Video Coalition discussing mobile television opportunities at NAB2008.