Is there a business case for 3G TV? Television on cell phones is touted as the next major revenue stream

America's Network, Jan 15, 2005 by John C. Tanner

Earlier last year, I told the one about the time I spent part of 2002 enjoying full-motion live video of World Cup soccer matches on a mobile device. The punch line was that the "mobile device" was in fact a Casio portable TV set. I also observed that this was conceivably the ticket to bringing quality video to handsets: stick TV tuners in them. And why not? We're already integrating all sorts of consumer electronics into handsets these days--cameras, camcorders, FM radios, etc. Why not TV?

A number of vendors are gearing up for digital TV solutions that are completely terrestrial based. Inevitably, it's already shaping up to be a standards war between Europe, the U.S. and Japan, with Europe represented by DVB-H (digital video broadcast for handhelds), Japan by ISDB-T (integrated services digital broadcasting-terrestrial) and the U.S. by--who else?--Qualcomm. The latter is planning to build a terrestrial mobile TV service called MediaFLO in the U.S. based on its proprietary FLO (Forward Link Only) technology (which, for the record, uses OFDM, not CDMA).

Of the three, Qualcomm is scheduled to get to market first, with commercial service planned by 2006. DVB-H and ISDB-T are expected to be available by 2007. All three reportedly permit synchronizing the video with 3G data services, thus allowing operators to place relevant interactive windows onscreen--say, U2 ringtone download offers when a U2 music video is playing, or an SMS U2 trivia game.

Time will tell which technology is left standing five years from now, though considering that no one's ever bothered to create a global standard for analog TV, harmonization is arguably not a requirement for the future of mobile TV. On the other hand, regular TVs aren't mobile, so there's never been a need for a global standard. It was easier to just make TVs that work on NTSC, PAL and SECAM.

The bigger question is whether or not there's a serious business case for mobile TV.

IN SEARCH OF DOLLARS

By all indications, it's far from an easy dollar. For example, the experience with satellite DMB has already shown that mobile TV incurs potential regulatory headaches.

Assuming that regulators don't see any crossover issues with mobile TV, operators still have to work out how they're actually going to make money. Monthly subscription fees? Pay-per-view? Per minute?

The answer to that lies in figuring out just what end-users would do with a mobile phone if it could pick up TV signals. Watching broadcast TV during the train/bus ride to work sounds good, but you could do that with any old analog TV for free, though the quality would vary wildly. Some people might pay for a reliable signal.

There's also a cannibalization issue here. Time spent watching TV on a mobile phone is time NOT spent using other 3G data services, like downloading video clips you want to see now rather than waiting for something good to come on TV. Wasn't this supposed to be an alternative to top-down broadcast television in the first place?

To be fair, 3G video itself is still in search of a business case. And in terms of picture quality, broadcast video beats streaming video in most cases. Notably, Qualcomm's MediaFLO network supports streaming video and video/audio downloads for extra value.

The trump card for critics of mobile TV is usually to point to the 2-inch phone screen and say, "No one will watch TV on a screen that small." What they really mean is, "I won't watch TV on a screen that small." Fair enough. But many people will. Whether they'll pay money for it is another matter.

John Tanner is Global Technology Editor based in Hong Kong.