Advertising to help kick start mobile TV market

Mobile TV services are forecast to generate $1.5bn in revenues in 2008, rising to over $10bn in 2013, when nearly half the revenues will come from advertising.

The figures were released Wednesday by industry analyst and telecoms.com parent Informa Telecoms & Media, which said that while the bulk of mobile TV revenues presently come from subscription fees, the advertising business model is expected to gain prominence over time.

By and large, mobile TV has turned out to be something of a disappointment for the operator community. Most in the industry believed that mobile TV was going to reach the mass market a lot earlier than has been the case. But a number of market and technology barriers have conspired to delay the widespread adoption of mobile TV by consumers and growth in many regions is still fragile.

As a result, Informa reckons that the future of mobile TV will not be just broadcast or 3G but will be a mix of technologies matched to a mix of audience experiences.

In the next two years, growth is anticipated to be strongest in the pioneering markets of South Korea and Japan before the rest of the world starts to catch up around 2010/2011. Despite isolated success stories in places like Italy and Austria, Europe is not expected to see rapid growth in mobile TV until 2009. The USA is expected to take even longer as confusion over standards prevents growth. Eventually, concerted momentum behind ATSC-MH is expected to boost the market for mobile TV in North America.

“As the owner of the marketing and billing relationship with subscribers, operators are in the best position to offer mobile TV services”, said Shailendra Pandey, senior analyst at Informa. “It seems that a good approach for mobile operators will be to start with a free-to-air business model which also involves minimum capital investment. Once user uptake of services starts to grow, operators can then think of developing new revenue models that can be established on top of the free-to-air content platform.”