Will We Use Our Mobile Phones To Watch Enough Television To Make It A Viable Financial Proposition? Various UK trials and Tests Indicates the Answer is Yes, No, and Maybe.

Philip Stone January 19, 2006

Since November Sky Television has provided more than 5 million live-TV streams in its Vodaphone 3G service, so there certainly is an interest in using mobile phones to watch some television. But in a just concluded trial by BT with Virgin Mobile users said they preferred listening to digital radio on their phones than watching TV and they were not wiling to pay as much as operators wanted. And in yet another trial, this one by O2, 78% of users said they would buy a TV service.

Mix all of that together and the results basically say that there is a market for TV on mobiles, but not as large as perhaps operators might have hoped, and the cost of the service must be kept very low – perhaps no more than  £8 a month. It’s going to have to be a big volume business.

James Murdoch, chief executive of BSkyB, answering questions put to him by readers of the Financial Times web site, said that even with the 5 million transmissions so far within a three month period, it was far too early to tell what works best, and that includes technology, the business model and content.

But he did admit “being able to watch channels like Sky Sports live on your mobile has proved a big success.”

In the London BT/Virgin Mobile test, 1,000 users watched about 66 minutes of TV every week, but listened to 95 minutes of radio. More said they found digital radio appealing or very appealing than they did watching television. And cost for television programming is very much a factor and should fall somewhere within the £5-8 per month range. Vodaphone, 3, and Orange are currently charging £10 a month for their 3G TV services.

Users in the London test had three channels available ranging from rolling news, sports and entertainment. Usage indicated that people tended to catch up on entertainment programs while they were out of the house more than they were dipping in and out of rolling news.  Peak viewing was during the morning and evening commute hours. Whole programs, rather than “highlights” were preferred.

Kids particularly used the phones at home watch TV in their bedrooms.

BT plans to offer a wholesale TV service to mobile operators starting in the summer using the DAB-IP broadcast signal technology. The handsets to receive the transmissions, made by Taiwan’s  HTC, can also  receive digital radio.

And a third ongoing trial by O2, which is being bought by Spain’s Telefonica for £17.7 billion, suggests there is a very strong appetite for TV on mobiles, but again price is all important and should be in the £8 monthly range

In the O2 trial, with 375 users given specilally adapted Nokia 7710 smart phones to watch 16 channels, 80% said they were satisfied with the service and 75% said they would buy the service with 12 months. Similar to the London tests, the service was most frequently accessed during the commute hours and also at lunch although usage was more – about three hours a week, possibly because there were more channels to weatch in the O2 test. 

One problem for O2 is that the its test uses a Nokia-backed standard called DVB-H which uses a radio spectrum that will not be available across the UK until 2012 when analog TV  ends.

So with mobile phone still pictures and video turning many users into citizen journalists the day may not be that far away for a user to transmit pictures to a TV web site and then later see those same pictures coming back on live television via the same mobile phone.

Makes one wonder, of course, with all that activity going on what does one do when watching your favorite program on the mobile  and the phone rings?