Picture Imperfect
Quality And Standards Issues Slow Video On The Go
by K.C. Neel -- Multichannel News, 4/6/2008 8:00:00 PM
Mobile TV was ranked the No. 1 application people want on their mobile phones, according to a recent consumer behavior study conducted by Ericsson and CNN International. About one-third (34%) of the respondents ranked television as the most sought after application for mobile phones. Nearly one in four (24%) current mobile TV users said they watch daily, with 52% saying they tune in on a weekly basis.
Conversely, a study conducted earlier this year by M:Metrics for Tellabs found that that the number of users who watched mobile TV once and then stopped grew by 68%, while the number of new users increased only 36% last year. Price and picture quality seem to be the biggest hurdle for consumers. There is a silver lining, however: 60% of former viewers said they would pay to watch mobile TV again if the quality and reliability significantly improved.
“Some people obviously don’t see the value today,” ESPN senior vice president of digital video and mobile production John Zehr said. “I think the economic models for this product still need to be played with. But it’s a bit like camera phones. Two years ago, people didn’t want to pay extra for a camera. Today, you can’t buy a phone without a camera, and people who said they would never use it are taking pictures all the time. Mobile TV will be similar. But it must be easy to use. If consumers have to push 12 buttons to access a show, they aren’t going to use that feature and they aren’t going to see the value of the service.”
Clearly, the number of handheld devices capable of receiving video signals is increasing and analysts predict the number of customers accessing mobile TV will soon skyrocket. ABI Research expects the total number of mobile TV subscribers worldwide to reach 462 million by 2012. Shipments of Internet protocol-enabled handheld devices totaled 64 million in 2007.
| At a Glance | |||||||
|---|---|---|---|---|---|---|---|
| Mobile Subscriber Monthly Consumption of Content and Applications: | |||||||
| U.S. | E.U. | France | Ger. | Italy | Spain | U.K. | |
| SOURCE: M:Metrics Benchmark Survey, January 2008 |
|||||||
| Total mobile subs, 13+ (in millions) | 219 | 220.5 | 45.5 | 48.5 | 46.5 | 33.5 | 46.5 |
| Watched video | 4.6% | 5.5% | 5.3% | 2.8% | 6.7% | 8.1% | 5.6% |
| Accessed news/info via browser | 13.1% | 9.4% | 9.5% | 5.5% | 7.9% | 7.5% | 16.5% |
| Received SMS ads | 19.2% | 50.6% | 64.7% | 31.1% | 56.0% | 73.1% | 35.4% |
| Accessed social networking sites | 4.2% | 2.6% | 2.2% | 1.1% | 2.3% | 2.5% | 4.7% |
Ryan Hughes, Verizon Wireless vice president of digital media programming, likens the acceptance of mobile TV service to text messaging. “Four years ago nobody thought that text messaging would be a big deal,” he said. “We sent 132 billion text messages in 2007. Mobile TV will be the same way. So many things unfathomable just a few years ago are now must-haves for consumers.”
At this point, mobile TV usage appears to be demographically and event driven, Hughes said. Not surprisingly, Verizon’s video service tends to be most popular among users 18-34. Moreover, disasters such as last year’s California wildfires or events such as this year’s presidential debates have increased usage. Mobile TV usage can also be attributed to culture and geographic factors, said Kip Compton, senior director and general manager of Cisco Systems’ video content and networking business unit.
Hughes agrees — to a point. But he noted people are accessing video on handheld devices any time they have a few minutes of free time.
The kind of programming offered clearly impacts how often users access mobile video. But it’s the actual device that appears to have the biggest impact on usage today.
The M:Metrics study released March 18 found that a staggering 30.9% of Apple iPhone owners watched mobile TV or video, as opposed to a 4.6% market average and more than double the rate for all mobile phone users. Hughes admitted that screen sizes and picture quality play a big role in how often users access mobile TV and how satisfied they are with the experience.
Industry players are confident quality and reliability issues will work themselves out over time as new generation tools become available. That will not only require equipment and infrastructure upgrades, it will eventually mean forming standards for delivery formats and picture quality.
“I don’t think the issue will be simplified until the picture quality is where people want it and it’s not there yet,” said Marty Roberts, vice president of marketing for thePlatform, a Comcast subsidiary. “Standardization is good for the market but the quality is not good enough to make it the standard yet. Of course, good enough is in the eyes of the beholder. The broadband universe has been around for 10 years now, and we’re still seeing improvements in picture quality. It’s in everyone’s best interest to reach a standard, but it will take some time for that to happen.”
Compton agrees. “Ten years ago, video quality over the Internet was very primitive,” he said. “Today, we have streaming HD signals. It’s come a long way and the mobile TV space will evolve much the same way only probably faster since most of the content being delivered today is done over IP networks.”
Compton added that mobile phones have become fully functional multimedia devices able to play PC-based video formats. “Mobile streaming will soon look more like PC streaming. I am not sure it’s anyone’s master plan, but standards are being pushed in the PC universe and the same thing will happen in the mobile TV universe,” he said.
To be sure, delivering video to handheld mobile devices is very complex. Mobile TV signals are delivered two ways today: Unicast — point-to-point distribution or video on demand; and broadcast or multicast — the continuous streaming of signals much the way a cable or satellite system delivers signals.
GLOBAL STANDARDS
There are seven delivery standards for mobile TV around the world today. The European Union took steps March 17 to simplify the morass by adding the Digital Video Broadcasting – Handheld (DVB-H) standard to the official list of EU mobile TV standards. It is part of a family of interoperable standards, together with DVB-S for digital satellite TV, DVB-C for digital cable TV and DVB-T for digital terrestrial TV.
The EU’s move could be a blow to competitive multicast technologies including Digital Multimedia Broadcasting (DMB), which is widely used in South Korea, and Qualcomm’s MediaFLO technology, used in the U.S. But the EU’s endorsement of one technology over another is limited: EU nations are under no obligation to eliminate other standards.
Most executives involved in the mobile TV arena believe a mix of unicast and multicast signals makes the most sense financially, as well as aesthetically. Some programming, such as the 200 or so VOD clips ESPN makes available to mobile users every day, is better delivered via a unicast delivery mechanism. The company’s 24-hour mobile TV channel is better delivered via a broadcast model, Zehr said.
“I think the world will have a mix of both to be successful,” Zehr said. “A lot of our content is meant to be viewed live but we think the point-to-point model also has value.”
VERIZON’S MIX
Verizon Wireless is clearly dedicated to delivering a mix of unicast and multicast products.
The company is using MediaFLO to deliver live, streaming video to handheld devices. Content providers send video in any format to MediaFLO’s headend just as they would to cable and satellite providers. The system then digitizes, compresses, encrypts and encodes content for the over-the-air interface transmissions with mobile devices. MediaFLO multicasts its service using the UHF channel 55 spectrum, eschewing Verizon’s existing networks for transmitting video content, which the company said prevents degradation of existing voice and data service.
The eight-channel multicast service is currently available to customers in about 50 markets and costs $13-$25 a month, depending on the package.
The company has also been delivering a unicast service to customers for several years. It started by delivering a couple hundred video clips when it launched its first video product. Today, Verizon offers thousands of clips via unicast, Hughes said.
MobiTV is a unicast service currently used by Sprint Nextel, AT&T, Alltel, US Cellular and others. The service offers dozens of video and music channels including A&E Mobile, Animal Planet, Discovery, C-SPAN, Weather Channel, Sci FI Channel, USA Network, Oxygen, NBC Mobile, MSNBC, Bravo To Go and others. It costs about $10 a month.
Encoding and decoding video content is constantly in flux. Formats are changing as often as every three to six months, said thePlatform’s Roberts, as more handheld devices are able to deliver video content and more carriers begin offering mobile TV as a service option. Verizon alone has four different encoding formats right now, he noted.
“There really is no such thing as a universal format,” Roberts said. “It’s a very complex business and that is why we serve the niche we do. We act as intermediaries between the content provider and carrier so those TV signals can be received on the carrier’s handheld devices. We typically work with the carriers that license the programming. Companies like MobiTV, which we also work with, license the content for the carriers.”
What consumers actually watch on their mobile devices is also morphing. A recent consumer survey conducted by ABI Research found that consumers use a mix of mobile content obtained from the Web, from their personal collections, and from their wireless carriers. For example, today’s mobile consumer is more likely to watch a video from YouTube on his or her phone than a video from the carrier’s own service.
It’s the same worry that cable operators have about consumers accessing the Web for video content and it could change the business model going forward, but it’s too soon to tell how it will all shake out just yet. It’s also going to have an effect on how those signals are accessed and the technology necessary to deliver them.
“Perhaps more with the mobile phone than any other consumer electronics device, content is obtained from a variety of sources,” ABI research director Michael Wolf said in a statement. “This shows that despite the strong control most carriers retain over the network, their control over the mobile content ecosystem remains limited. The consumer will see more and more options for obtaining rich media in the future.”
WAITING FOR GOLD
Some content providers are excavating the mobile TV terrain carefully or waiting to see if the early adopters strike gold. Others, like ESPN, have staked their claim and are mining the business aggressively.
ESPN has been offering a slate of on-demand clips for a couple of years and launched a 24-hour mobile TV channel a year ago. The programmer is constantly adding to its VOD library and live event calendar to add value to its offering, Zehr said. Cisco’s Compton believes some content providers aren’t deliberately ignoring the mobile TV arena as much as they are focusing and refining their Internet strategies first.
Content providers would love to see a simplification of the encoding process but they understand why it’s so complicated, Zehr said. ESPN hands off its 24-hour mobile TV service to MediaFLO, which then streams it to Verizon’s handheld devices. That’s pretty simple, he said. But ESPN also formats and delivers its VOD clips directly. Zehr admitted that it’s a lot of work today.
“We’re starting to see some standardization of formats,” he said. “It will be a lot easier in a couple of years but right now it takes some work.”
Most of the technologies used in mobile video distribution are based on open standards, according to a white paper from Envivio. While this approach fosters innovation and competition, the interoperability between various vendors is often a challenge. Cooperation between server, software and terminal vendors is essential in ensuring that the whole ecosystem works well, the company believes.
Envivio and Cisco create headends for mobile carriers, and both companies are creating open networks that will handle multiple platforms and formats. Neither company is betting on one winner — at least not yet. The business is too nascent to pick winners and losers at this point. The industry is getting smarter, however, said Envivio spokesman Ian Locke.
“The carriers are not chasing every codec anymore. They are picking and choosing which devices they will support now,” he said.
Hughes said Verizon works closely with the handset manufacturers to create devices that will meet the needs of the carrier, programmer and end user. “We work with the manufacturers before we order any devices so that the system flows more easily,” he said, adding that delivering the right content packages to consumers is probably a bigger challenge for carriers today.
Financial models for delivering video content to mobile devices will continue to morph. At this point, Zehr believes the subscription model works best, but he also sees potential for advertising-supported content down the road. The Weather Channel believes that time is now.
WEATHER’S AD MODEL
Weather announced in March that it will begin selling ads on its mobile TV content during its upfront presentations. One of the most high-profile mobile TV ad ventures to date was Pepsi’s sponsorship within Sprint’s free Power Vision channel of on-demand clips. Pepsi, in partnership with Sprint and its ad network provider enPocket, ran pre-roll versions of the Pepsi Super Bowl ads in February.
A recent report by Nielsen Mobile suggests consumers are gradually warming to the idea of mobile advertising. Among the findings, nearly a quarter of all U.S. mobile subscribers (23%) say they’ve viewed mobile advertising in the last 30 days. The number of phone users who recalled seeing mobile ads rose 3% to 58 million in the fourth quarter compared with 42 million in the second quarter.
About 13% of the respondents to the Nielsen study said they were open to ads if they improve the mobile content available, while about 14% said they were open to ads as long as they were relevant to their interests, the survey found.
In spite of all the complexities, industry leaders remain committed.
“The launch of our multicast service is the best example of our commitment and belief in the mobile TV business,” Hughes said. “We wouldn’t spend this much energy to deliver the product to consumers if we didn’t think it was worth the effort.”
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