June 22, 2010

Mobile digital television: Coming to a (small) screen near you

Mobile digital television as we’ll come to know it -- live broadcasts, designed for the smaller screen, and most important, free -- is step-by-step getting closer to becoming a reality.

There are a plethora of questions surrounding mobile digital TV. The biggest is simply whether it will succeed, the success of a free ad-based service depending entirely on widespread adoption -- the network TV model gone mobile. Another question is whether it will reshuffle the landscape of existing services, crippling subscription-based models (like Flo TV and Hulu, if it goes down that path, as rumored). 

Mobile digital TV is being promoted by the Open Mobile Video Coalition (OMVC), a group of more than 900 local broadcast TV stations. It aims to create a mobile digital TV standard to allow and provide live and on-demand video broadcasts.

The technology would allow wireless devices to pick up over-the-air local TV broadcasts, even when users are on moving trains, cars and buses. Mobile digital TV already exists in test markets such as Chicago and Washington -- and is already popular in Japan and South Korea -- and may soon be coming to a city near you.

The main hurdle is with cell phone carriers, which have little motivation to offer mobile digital TV-enabled devices for a service that will provide them no direct revenue. It’s another reason consumer demand will have to be high.

For consumers, the key word is free, and that’s a price that can’t be beat. In this day and age of paying for a cell phone, a wireless data plan, cable TV, premium movie channels and premium subscription packages to major sports leagues, free resonates. Loudly.

So, would mobile digital TV’s success kill the bundlers and aggregators that don’t own their content, like Flo TV and Hulu? Perhaps. But only if remains free. The OMVC may explore a subscription-based premium content tier as part of its offering down the road.

Consumers have shown they are willing to pay for access, and for premium content, but are reluctant to pay twice for the same content on different platforms. Flo TV has already encountered this consumer resistance and Hulu may suffer the same fate.

As technology continues to advance, the business model that makes the most sense is the one-price-across-all-platforms model. We’re not there yet. But like mobile digital TV, we might be soon.

Live, local TV on mobile devices will debut in Ohio this year {Cleveland Plain Dealer}
Mobile television is unlikely to take off {The Economist}
Mobile TV finally ready for takeoff {Internet Evolution}
US broadcast groups to develop national mobile TV service {cellular-news}
One-third of Internet users watching Web TV {Media Post}
Flo TV fails to attract, Qualcomm CEO says {Wall Street Journal}

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