October 2008

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U.S. Mobile TV: Free or Subscription?

Unlike their Asian and European counterparts, U.S. over-the-air broadcasters have yet to test the mobile TV waters.  Verizon and AT&T offer TV through Qualcomm’s MediaFlo technology, which uses over-the-air spectrum to deliver TV programs to handheld devices.  But, terrestrial broadcasters have yet to jump in.

That’s about to change as mobile TV proponents are completing work on a U.S. mobile TV standard that is an off shoot of the U.S.’s digital terrestrial TV (DTT) standard, ATSC. Technical testing has begun and the technology is reportedly ready for prime time by early 2009. Despite the newness of the standard, it isn’t the technology that calls into question whether or not mobile broadcast TV will be successful in the U.S. It’s the business model.

Take up of the Verizon and AT&T MediaFlo-enabled services, which are subscription services, have been lackluster. But in parts of the world, such as Japan and Korea, where broadcast mobile TV is ad supported and delivered to handset owners at no charge, there are millions of users watching TV on the go (see chart). This is the business model that most U.S. broadcasters will adopt as they roll out their first mobile TV services next year. It will be then that U.S. consumers will decide whether the U.S. broadcast mobile TV market will be dominated by pay or free content.

Myra Moore is president and chief analyst of Digital Tech Consulting. Digital Tech Consulting, Inc. (DTC) provides market research, intelligence and analysis to help companies succeed in the consumer digital marketplace. Information on DTC can be found at www.dtcreports.com.  Myra can be reached at (214) 915-0930.

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