Who is Watching Mobile TV Now?

( 1 Jul 2008 )

By Stephen Las Marias, Editor


Qualcomm MediaFLO Technologies' Mazen Chmaytelli, Senior Director, Business Development for the Americas, discusses with Wireless Design and Development Asia the current mobile TV landscape, trends and opportunities, as well as success factors to consider in this industry. Excerpts:

How was business for MediaFLO last year?
Last year was an important year for us. While the FCC mandate for the analog-to-digital switch-off is still on February 2009, we were already able to clear eight of the 10 largest media markets in the U.S. With the launch of the AT&T Mobile TV with FLO in May, we have expanded our coverage to about 55 to 60 metropolitan areas and 26 states, plus the District of Columbia. AT&T is one of the largest GSM/UMTS operators in the United States. With Verizon and AT&T, we cover the number one and number two U.S. providers—that's a potential 120 million addressable subscribers. This is the largest commercial deployment in the world, considering just the sheer size of the target subscriber base as well as area—coast-to-coast of the United States.

We were able to clear the metro areas to go ahead and use Channel 55, which is the frequency that MediaFLO operates on. Another interesting achievement last year for MediaFLO USA is that we were able to win auctions for Channel 56.

Also, we've seen the price points of the initial devices that were launched in March of 2007 dropping. So right now, unsubsidized costs are around $220. And additional devices are coming in—also devices that are not only CDMA2000 but UMTS and GSM. This supports our key message that we've been saying all along: we are open-standard, and we are 2.5G-, 3G- 3.5G-agnostic.

During the NAB in Las Vegas, we demonstrated MediaFLO in automobiles. We modified the backseats to have 8in diagonal screens, and we have a MediaFLO modem module receiving the FLO signals. There's no telephony counterpart, but it shows another interesting applications that the car can leverage with the MediaFLO.

All of these U.S.-based activities are very important to us because, while we are working closely to that February 2009 launch date, the fact that we have AT&T and Verizon launches prove that, with what we call the MediaFLO Service Operator, our systems can serve various operators in a region. So you can have the best of the best business case possible.

As in our demos, even though they are being served by MediaFLO USA, the Verizon and AT&T devices look completely different. They have different channel bouquets—AT&T has CNN and Sony Pictures, Verizon has ESPN, etc. Even though they are both being served by the same entity, for the average consumers, they don't know it is MediaFLO in the background, and that's exactly how we want it to be.

Worldwide, over the past year, we conducted our first 8MHz trial in Kuala Lumpur with Astro and Maxis, wherein we were able to demonstrate live 27 channels. Also within the APAC region, we concluded trials in Hong Kong and Taiwan, and we formed two partnerships in Japan—with Softbank and KDDI.

We were also able to start demonstrating 8MHz devices in trade shows. During the 3GSM World Congress 2007 in Barcelona, we demonstrated 37 services—30 live video channels plus seven audio channels on 8MHz devices.

Speaking of Europe, we have concluded two trials with BSkyB, one in Manchester and one in Cambridge. And this is where we were able to prove our lab results in the field. All along we have been saying that we are 4.5dB link margin higher than DVB-H. The trial even proves our lab results to be very conservative—because that is how we like it to be initially. The UK trial ended up showing that MediaFLO is 4.5dB more superior than DVB-H.
The technical benefits lead directly to business case benefits. And the business case benefits is if you deploy MediaFLO from scratch versus DVB-H, the capex/opex cost will be half as much just because of the link margin—you will need less transmitter to cover the region or a city, or you could spend the same size of network but with double the channel capacity.

What were the major technological changes that have occurred over the mobile TV space, and how was Qualcomm able to meet these changes?
I think it is still a nascent market. But what's important to see here is we are realizing that there is a pick up rate of mobile TV. There are various deployments going on worldwide, and this will culminate in the upcoming years when you will have additional devices coming into the market, with cheaper price points.

Months ago, we demonstrated dual mode devices supporting MediaFLO as well as ISDB-T—the Japanese standard for free-to-air. From a technology perspective, Qualcomm all along realizes that we will be living in a multi-standard mobile TV world, so our chipsets support DVB-H, MediaFLO as well as ISDB-T.

How do you see the confusing array of technologies including DMB, DVB-H, MediaFLO, ISDB-T, and CMMB impacting the mobile TV market?
Successful traction of all standards in mobile TV is important to lift the overall ecosystem. I am very comfortable with MediaFLO's technical and business merits, and I am very happy to take some headlong from a competitor perspective. We support technology neutrality—MediaFLO's an open standard I am happy to push forward.

What do you think will drive the rapid adoption of mobile TV?
I think the ecosystem need to grow together. Also, in some of the market research I looked at, people initially are worried—'Should I really watch TV on such a small screen?' Based on the consumer research we conducted in the United States, initially 30 percent of the respondents say they might try mobile TV.

Now once they tried it, 70 percent will say they will subscribe to it. Hence, you need to go ahead and try it in order to see it's real. And again we're battling a misnomer conception as I've mentioned with unicasters here. There are a lot of mobile TV deployments back in 2006 but it is not the real deal. That's one issue.

Second, TV has been around for about 50 to 60 years or more. What I am saying is it is still a disruptive technology, maybe because it is like wireless; this is a new application wherein you have your personal TV player with the quality you're accustomed to, which you can take wherever you want.

And then again, people that are unsure yet of watching on mobile phones are actually watching shows such as Lost or Survivor in their iPod nano screens, which are three times smaller than these devices. So it is all in perspective.

Also important to consider are the whole new demographics that are accustomed to having video-on-demand whenever they want it. Also, apart from people using mobile TV to kill time while they are commuting, we've seen some using mobile TV at home. The scenario is you have teenagers sitting at home with their family who are watching the main TV, while they have their headsets and watching their personal TV. They are paying for it, so they watch the show that they want.

So there's the whole scenario. We are introducing something new, and once the world gets around it will start progressing. Speaking of the ecosystem, I think also once the business models start realizing their benefits, you'll going to have a lot of accessories support, such as screens; devices getting more and more TV-first-telephony-second; being able to dock your devices, etc.

It's nascent because it's a long cycle to deploy a new technology, but I think all the dominoes are already positioned nicely to go ahead and start that quick uptake.

Who is watching mobile TV now and what are they watching?
Initially a lot of the naysayers are saying people will just watch 5-10min of the devices, and it's only going to be the teens watching. Also they would just like to watch content made specifically for mobile, what we call as "mobisodes". But those were proven wrong. And this is really great because that proves again that the shift toward TV experience in the hand--anywhere and whenever you want it.

Both genders are watching—it is not only male-dominated or young male; all age range; and they are watching news, sports, reality TV—these are the three big categories—as well as entertainment shows. Also, they like to watch simulcast.

And the fact that the TV is with you, there's what I call the "new primetime". Even though there's the primetime at the evening that is being simulcast, depending on the region there's a new primetime during the commute hours, and during lunch—this is when the YouTube viewing starts spiking in the United States, for example.

Some of the people we surveyed, for instance, are watching the FIFA 2008 because they are late to arrive to the bar or to their friends' house to watch it or even at the stadium. This makes them always connected.

This is the same phenomenon with wireless and the internet—wireless will take internet to the next level. Here, mobile TV will take wired TV to the next level.

There's a question about streaming versus broadcast in mobile TV. Which one do you think gives a better opportunity for service providers?
To support the sizable channel bouquet that we talked about, 20 to 30 channels, you really need a broadcast technology because unicast, from a technical perspective, is having one-to-one connection from the cell site sector to the consumer.

If you're betting to succeed, the technology to support such a business model is broadcast because it is very efficient to broadcast to all of your consumers within a city or region the channels they want—I call these 'short-tail content'. So broadcast is the best technology available—and when I say best, I am talking about dollar per bit per price. You could have 5 million users watching short-tail contents on their devices. Adding more subscribers doesn't cost you additional penny because you have one broadcast to all enabled devices.

Now, there's still value in having hybrid models for 3G—this is called the long-tail content—such as the collection of U2 songs. It is not efficient to broadcast them because not all people in Singapore, for example, want to watch those videos. So having the ability to have on-demand download makes sense.

It makes sense to have both models, but when it comes to mobile TV, broadcast is the cheapest to offer it; it also provides the best consumer experience.

What about to free-to-air?
If you look at Korea and Japan, you have almost 30 million ISDB-T devices in Japan, and about 8 million T-DMB/S-DMB devices in Korea already shipping. So from a device distribution perspective, it is very important, because people will be able to start their device and then be able to look at the TV channels that are available to them from a free perspective.

I believe the combination of free-to-air and pay TV is the way to go. The same thing in households—people can set up their rabbit antenna and then there are free to air channels. Or, they can decide to pay cable or satellite TV providers because they want premium channels such HBO, CNN, etc.

The demo we've done with ISDB-T and MediaFLO proved exactly that you could have free-to-air technology running side by side with subscription pay TV technology.

If you're a consumer buying a device, and you have two devices available for you—one has only free-to-air capability and the other one has free-to-air plus MediaFLO, and they are reasonably at a similar price. He'd probably buy the device that supports both, because even though he might not subscribe for it, he has the option to subscribe later on.

What do you think are the success factors to consider in the mobile TV market?
It is important to explain to the consumer that it is real TV in a mobile environment, not the 'unicast' mobile TV. So I think consumer awareness is important; content is king—that is, having the right content deals as well as providing the consumers with a sizeable channel bouquet; and the consumer experience.

But lastly let us not forget about the business case. In order for the ecosystem to flourish, you need to give consumers something they are willing to pay for.

What are the biggest challenges facing the mobile TV industry in the next 18 months?
Overall it is consumer awareness, making sure it is a technology neutral environment when it comes to regulatory aspect, and having the availability of spectrum.

In some region, the spectrum will not be available until 2011 or 2012, some even 2015. So there's getting the spectrum available and also having the right entities formed to go ahead and deploy MediaFLO services.

How important is Asia in Qualcomm MediaFLO's business plans? Please give us some details on your planned activities in the region this year.
Asia is very important to us. When it comes to mobile, Asia is an amazing market. This is where a lot of the visionary things start occurring in terms of mobile. As you know, ISDB-T for example has been around in Japan for a while, so they are accustomed to having mobile TV on their devices. There are various trials going on right now in the Asian region, which highlights the importance of that market for all standards out there.

Having MediaFLO launch in Asia is very critical not only for tapping into that mobile savvy base where a lot of innovation is coming from, but also being able to go ahead and leverage the heavy orient manufacturing base.

What are your strategies to penetrate emerging markets, such as India, Vietnam and Indonesia?
All of these markets are very important for us. Being able to bring the devices price points to that sweet spot for emerging markets is important, and having an open standard backed by MediaFLO will help reaching us these points. We already have $200-$220 unsubsidized price points for some of these devices. Once you enter these emerging markets, you are probably looking at $150-$120 unsubsidized prices.

Reaching these price points is important, but we have the right equation to make it happen. The reason I am saying this is because Qualcomm does not make money by selling high-end devices. We are a technology provider, and we make money by licensing our technology, and also by having various handset providers support our technology. And when you have different manufacturers supporting a technology, that helps bring the competition in the marketplace, which will thereby bring down prices of these devices.

We are having active discussions with Indonesia, also in emerging markets of Latin America as well as Africa. So reaching the price points is important, as well as offering content or working with content broadcasters in those regions.


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