Russell Buckley over at mobhappy.com thinks that it is a prevalent myth that users are prepared to pay for anything on their mobiles that they get for free elsewhere. He suggests that the myth will exploded in the Mobile TV arena, and that Mobile TV will either end up being bundled in with a bunch of other stuff and sold as an all-inclusive premium package or as a loss-leader.
Russel is not alone ... (continued)
Russell Buckley over at mobhappy.com thinks that it is a prevalent myth that users are prepared to pay for anything on their mobiles that they get for free elsewhere. He suggests that the myth will exploded in the Mobile TV arena, and that Mobile TV will either end up being bundled in with a bunch of other stuff and sold as an all-inclusive premium package or as a loss-leader.
Russel is not alone; a recent vunet article reports that a study shows consumers tend to shy away from monthly subscription plans on top of existing fees because of the charges, dislike Pay-as-you-go plans, which make them fear their bill at the end of the month, and concludes that the best solution is to bundle mobile TV with 3G subscription plans.
We'd like to agree - but there seems to be some conflicting data:
In early May 2005, TU Media started to beam satellite digital multimedia broadcasting (DMB) to mobile phones. 2 weeks after the launch, over 20,000 customers had bought a DMB mobile phone and signed up the broadcast services at USD 13/month. Even more shockingly - TU Media reportedly had 300,000 subscribers as of the end of November.
These seems to indicate that there is a market for subscription based services to stand alone; but would this be enough? TU Media predicted that it would have 600,000 to 700,000 subscribers by the end of 2005, and said that it required 5.5 million subscribers to break even. For reference, South Korea has a population of 48.4 million.
Taking that into account - the bundling model is definitely right. But if actual costs are so high, and operators already have knowledge of the problems with a subscription model, will mobile TV even get off the ground commercially? The best answer might be to see how TU Media does in the next year - but note that their position is compromised by the fact that terrestrial mobile tv is now available in South Korea, for free. Does anyone know the comparative cost of DVB-H broadcasting as compared to satellite DMB?
