Mobile television service is slated to hit 20 major metropolitan areas next year, but analysts say that won’t be enough to get the long-nascent industry off the ground.
The industry needs devices, and good ones.
The ATSC-based service will be dead in the water without a compelling lineup of ATSC-based smartphones, tablets and other consumer electronics, but it remains to be seen how successful groups like the Open Mobile Video Coalition (OMVC) and the Mobile Content Venture (MCV) will be in convincing manufacturers to include ATSC receiver chips in their new devices.
It could be difficult to convince consumer electronics makers to add ATSC chips even after the MCV launches mobile television services next year, says Strategy Analytics analyst Josh Martin.
Martin says adding ATSC chips to devices is a tough proposition for manufacturers, especially smartphone manufactures which use their devices to sell content. The free mobile television service that will come online next year from the MCV could cannibalize existing mobile content sales and will make the devices more expensive to manufacture without compelling evidence of strong consumer demand for mobile television, he says.
“For a smartphone manufacturer that sells content, it seems kind of contrary to put mobile television in their devices,” Martin says. “I fail to understand who in the value chain is getting enough money to justify the cost of integrating the new technology.”
ABI Research analyst Aapo Markkanen shares some of Martin’s doubts. “It’s not going to be on the device vendor’s priorities list,” Markkanen says. “It’s just wasting time if there aren’t good handsets on the market. Ideally, they would have some really successful handset or tablets with mobile TV and provide a big enough potential user base.”
Broadcasters involved in the U.S. mobile television efforts have taken pains to address the device issue and say the large-scale launch of mobile television services next year will provide an important impetus for manufacturers to integrate ATSC chips into a variety of consumer electronics.
“We’re talking to all of the major device manufacturers, and our goal is to have the major OEMs putting chipsets in a large volume of devices,” says Salil Dalvi, co-general manager of MCV and senior vice president of NBC’s mobile development. “We think the device makers have a real incentive to jump quickly and move into this market.”
John Lawson, the newly appointed executive director of mobile television industry group the Mobile500 Alliance, says talks with manufacturers are proceeding well. “There are a number of OEMs in east Asia that have indicated a strong interest in spinning up production of a range of devices, including tablets, USB dongles and personal media players,” Lawson says.
The OMVC has said new devices with ATSC chips are likely to debut at Mobile World Congress in February 2011.
Getting the backing of wireless operators could help get ATSC-based devices into consumers’ hands. The MCV has so far focused its efforts on getting the services to market and says it will work with the telecommunications sector in the future to expand distribution of ATSC phones. “We’re open for business, and if they’re interested, we’re ready to have those conversations,” Dalvi says.
Mobile television services have failed to gain significant traction in the U.S. market, as evidenced by the failure of Qualcomm’s Flo TV, which will be shut down next spring. The OMVC and other stakeholders in the mobile television industry say the failure of Flo TV shouldn’t be equated with the health of ATSC-based services, but the cancellation of Flo has fueled skepticism about the potential of mobile television services in the U.S. market.