Sunday, November 28, 2004

Not Exactly TV

DVB-H and MediaFLO are the two leading technologies used in digital mobile TV. Before we delve into these technologies, we will first address the fact that “Mobile TV” is an idea that spawns many questions. The more skeptical are quick to ask “Why would anyone want it?” A reasonable question, especially for the next few years. Ordinary broadcast television works in cars and on inexpensive handheld LCD TVs. Mobile digital TV starts by offering a replacement for something that is free to access with cheap devices, and for which there seems to be no consumer clamor for improvement.

Further increasing the challenge, mobile devices using DVB-H and MediaFLO will have to compete with the relatively high quality and low cost of portable and car-mounted DVD players. Owning a movie on DVD is simple, and DVD prices are reasonable – especially compared with recorded music on CDs. So both the product and the sales model are up against existing models that work well and where, again, there appears to be no popular revolt against the status quo.

Delving some way into the technology, there are further challenges: Both DVB-H and MediaFLO are “forward link only” technologies, hence the “FLO.” The return channel for control, m-commerce, interactive content, etc. is provided by mobile Internet capability in mobile handsets. This is a relatively complex arrangement compared with IP networks without such triangular paths. Augmenting the Internet by broadcasting content has never succeeded in other implementations, and mobile digital TV is, in both systems, relatively complex compared to other data broadcasting systems.

By now you may be ready to join the skeptics and ask “What are they thinking?!” Mobile digital broadcasting does solve some problems: For one, there isn’t enough bandwidth in 2.5G systems to deliver content to mobile handsets if, in fact, they become the primary device for accessing music and small-screen video.

There is also reason to think that datacasting will become part of the Internet, this time, for sure (well, likely, anyway): All of digital video broadcasting looks to become IP datacasting, and, as the name implies, DVB-H is a subset of the overall DVB standard, which has versions for terrestrial and satellite broadcasting. DVB-H could succeed by being an east-to-implement add-on to terrestrial digital TV broadcasting.

Then there is the fact that Qualcomm has taken the lessons learned from BREW and applied them to MediaFLO: MediaFLO will be sold as a turn-key solution for content delivery to mobile handsets. With BREW, Qualcomm learned that mobile network operators can succeed in spite of their often lumbering pace if a new value driver is handed to them on a silver platter. For CDMA technology users, Qualcomm controls the technology of MediaFLO end-to-end: from the transmitters to the chips to the software to the m-commerce environment (BREW, by the way). All that Sprint or Verizon need do is make the decision, and Qualcomm will control the pace of implementation.

The technology differences between DVB-H and MediaFLO are interesting, but unlikely to be conclusive in determining success. Qualcomm has also taken full advantage of end-to-end control in product formulation: MediaFLO is built with a bias toward providing the right solution, which is the delivery of media for time-shifted use. MediaFLO-enabled handsets will be equipped with enough storage to make time-shifted media use the norm. DVB-H, like most telecom standards, is oriented around providing all the abstraction layers and interfaces the members of the standards body desire. Product formulation is up to the implementers, and the implementers may be spread across multiple elements of the value chain.

So we have two technologies that can be the means to pour large amounts of mostly passive media content into mobile handsets. We also have a common motivation across all mobile network operators: to become an economic gatekeeper – to stand astride more transactions, and passive media consumption is a potentially large source of transactions that are paid for and consumed through the MNOs networks. These factors are up against the inertia of current approaches to consuming passive content that are accepted by apparently content consumers.

Why go to all this trouble? The problem for the telecom industry is that subscription voice service is an economic giant that makes media industries look small by comparison. To make data a significant part of the mobile telecom economy, MNOs and their technology providers will have to eat photography, games, music, a bug hunk of TV, and other media types for it all to add up to even 25% of the revenue from voice calls.

What if mobile media flops? What if consumers resist subscriptions for passive content, and resist DRM, and what if ownership of content on tangible media remains the preferred means of consuming? It could happen. All of mobile games and other mobile media are just an appetizer on the way to the main course: MNOs want all transactions. Media and games are attractive because they can be both paid for and delivered on MNOs’ networks, which enables the transaction fee to be larger. If it comes to it, MNOs will skip the appetizer and take their cutlery directly to the target: the credit card companies.

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