Gartner says mobile TV service competition in Hong Kong will be keen, but may not be profitable for operators
“It is very difficult to make a good business case for mobile TV because of the costs,” said Nick Ingelbrecht, research director, consumer services at Gartner.
(EMAILWIRE.COM, December 24, 2008 ) HONG KONG - Hong Kong faces a broadcast revolution with this week’s announcement by the Commerce & Economic Development Bureau that it will auction the frequency spectrum for mobile television services in mid-2009. However, according to technology research firm Gartner, it will prove challenging for broadcasters and telecom operators to translate the opportunity into revenue.
“It is very difficult to make a good business case for mobile TV because of the costs,” said Nick Ingelbrecht, research director, consumer services at Gartner. “Also, the demand side is still quite uncertain despite trials around the world. If people do use it, they tend to want it for free which makes it difficult for the carrier or the broadcaster to make money.”
“The level of competition and small market size will tend to work in favour of mobile TV being deployed in Hong Kong ahead of other markets but that does not mean that it will be profitable for the carriers / broadcasters unless they can gain some useful competitive advantage out of it,” Ingelbrecht added.
Gartner expects global mobile TV subscribers (these are defined as mobile subscribers who have signed up for a TV service or receive TV as part of their data subscription) to remain limited in the next four years, with penetration reaching 8.6 percent, or 477 million, in 2012
Forecast: Mobile TV Subscribers, Worldwide, 2008-2012 (Thousands) [ Table not Available ]
In terms of subscribers, mobile TV services are popular in Japan where the service is free-to-air and in South Korea where operators offer a mix of pay and free-to-air services. In other countries, uptake has so far been quite modest. Even in countries like Italy, where operators saw a good uptake thanks to a launch that coincided with the World Cup soccer tournament, things have slowed down considerably. So much so that during the recent European Cup, mobile operator 3 tried to revamp the service by offering it for free. However, even a drastic measure like this has provided very little success.
Gartner concludes that mobile TV will eventually make it as a mass market service, but the reward for the operators' efforts in deploying it will be minimal. Free-to-air services will continue to remain the most popular offers and operators and service providers will have to turn to advertising as a source of revenue. This will only happen after reaching critical mass, as advertisers will not be interested in targeting a niche market.
Gartner’s recommendations for potential mobile TV operators:
In markets where there is good Digital Video Broadcasting — Terrestrial (DVB-T) coverage, mobile operators should offer free-to-air mobile TV services to complement their third-generation (3G) TV offering.
Mobile operators offering broadcasting services should look at offering basic channels for free in order to encourage uptake, while offering premium content on subscription.
In the short term, mobile operators should not count on advertising as a way to drive mobile TV revenue.
Mobile device manufacturers should focus on a wide spread of technologies so as to exploit economies of scale and drive down bill of material (BOM) costs.
For more information on the Gartner report ‘Dataquest Insight: Mobile TV Looking at Free-to-Air to Stimulate Adoption’, please contact Barton Chui of EBA Communications at 2537 8022 or barton.chui@ebacomms.com
About Gartner
Gartner, Inc. (NYSE: IT) delivers the technology-related insight necessary for its clients to make the right decisions, every day. Gartner serves 10,000 organisations, including chief information officers and other senior IT executives in corporations and government agencies, as well as technology companies and the investment community. The company consists of Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, U.S.A., and has 3,900 associates, including 1,200 research analysts and consultants in 75 countries worldwide. For more information, visit www.gartner.com.
# # #
Issued on behalf of Gartner
by EBA Communications Ltd
For further information please contact:
Emma Jenkins / Barton Chui (EBA): (852) 2537 8022
(email: emma.jenkins@ebacomms.com / barton.chui@ebacomms.com)
This press release was issued through GroupWeb EmailWire.Com. For more information on unlimited press release distribution for $99/year, go to http://www.emailwire.com.
“It is very difficult to make a good business case for mobile TV because of the costs,” said Nick Ingelbrecht, research director, consumer services at Gartner. “Also, the demand side is still quite uncertain despite trials around the world. If people do use it, they tend to want it for free which makes it difficult for the carrier or the broadcaster to make money.”
“The level of competition and small market size will tend to work in favour of mobile TV being deployed in Hong Kong ahead of other markets but that does not mean that it will be profitable for the carriers / broadcasters unless they can gain some useful competitive advantage out of it,” Ingelbrecht added.
Gartner expects global mobile TV subscribers (these are defined as mobile subscribers who have signed up for a TV service or receive TV as part of their data subscription) to remain limited in the next four years, with penetration reaching 8.6 percent, or 477 million, in 2012
Forecast: Mobile TV Subscribers, Worldwide, 2008-2012 (Thousands) [ Table not Available ]
In terms of subscribers, mobile TV services are popular in Japan where the service is free-to-air and in South Korea where operators offer a mix of pay and free-to-air services. In other countries, uptake has so far been quite modest. Even in countries like Italy, where operators saw a good uptake thanks to a launch that coincided with the World Cup soccer tournament, things have slowed down considerably. So much so that during the recent European Cup, mobile operator 3 tried to revamp the service by offering it for free. However, even a drastic measure like this has provided very little success.
Gartner concludes that mobile TV will eventually make it as a mass market service, but the reward for the operators' efforts in deploying it will be minimal. Free-to-air services will continue to remain the most popular offers and operators and service providers will have to turn to advertising as a source of revenue. This will only happen after reaching critical mass, as advertisers will not be interested in targeting a niche market.
Gartner’s recommendations for potential mobile TV operators:
In markets where there is good Digital Video Broadcasting — Terrestrial (DVB-T) coverage, mobile operators should offer free-to-air mobile TV services to complement their third-generation (3G) TV offering.
Mobile operators offering broadcasting services should look at offering basic channels for free in order to encourage uptake, while offering premium content on subscription.
In the short term, mobile operators should not count on advertising as a way to drive mobile TV revenue.
Mobile device manufacturers should focus on a wide spread of technologies so as to exploit economies of scale and drive down bill of material (BOM) costs.
For more information on the Gartner report ‘Dataquest Insight: Mobile TV Looking at Free-to-Air to Stimulate Adoption’, please contact Barton Chui of EBA Communications at 2537 8022 or barton.chui@ebacomms.com
About Gartner
Gartner, Inc. (NYSE: IT) delivers the technology-related insight necessary for its clients to make the right decisions, every day. Gartner serves 10,000 organisations, including chief information officers and other senior IT executives in corporations and government agencies, as well as technology companies and the investment community. The company consists of Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, U.S.A., and has 3,900 associates, including 1,200 research analysts and consultants in 75 countries worldwide. For more information, visit www.gartner.com.
# # #
Issued on behalf of Gartner
by EBA Communications Ltd
For further information please contact:
Emma Jenkins / Barton Chui (EBA): (852) 2537 8022
(email: emma.jenkins@ebacomms.com / barton.chui@ebacomms.com)
This press release was issued through GroupWeb EmailWire.Com. For more information on unlimited press release distribution for $99/year, go to http://www.emailwire.com.
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