With Mobile TV touted as this year's 3G Holy Grail, operators are carefully evaluating their role in the nascent business models that are forming. Mobile TV will in most cases involve a broadcaster as an additional entity between MNOs and Mobile TV programming, meaning additional mark-ups before content reaches the operator.
"With subscribers potentially paying less than $10.00 per month for a mobile TV subscription, and with content costs in the region of $5.00 to $6.00 per subscriber, any additional entity in the value chain will have a significant impact on operator margins," comments Nick Holland, author of Pyramid Research's report "Rescuing 3G With Mobile TV."
This would explain why some MNOs are reaching up the value chain. Late last year, 3 Italia took the dramatic step of purchasing a regional Italian TV broadcaster; Canale 7. This has a number of advantages for the operator:
- Italia can develop their own TV programming � driving down their content costs and allowing their content to be resold to other MNOs.
- By understanding the TV broadcasting industry, 3 Italia is in a far stronger position to negotiate third party content than operators that are not directly involved in content creation, production and aggregation.
- The purchase provides 3 Italia with a Digital TV broadcasting license. 3 Italia now has the potential to also enter the broadcasting element of the value chain.
While an interesting tactical move by 3 Italia, it may not come to be fully realized as they will face stiff competition from the Telecom Italia/Mediaset joint venture to also roll out national DVB-H broadcasting in Italy. Nonetheless, 3 Italia may be the first of many MNOs that decide they are a little too divorced from the mobile TV opportunity and would like a larger slice of forthcoming revenues.
In March, Dutch telco KPN purchased Nozema Services, a company that specializes in providing technical services to broadcasters. This move will likely accelerate the rollout of digital TV services for KPN, including mobile TV.
"With subscribers potentially paying less than $10.00 per month for a mobile TV subscription, and with content costs in the region of $5.00 to $6.00 per subscriber, any additional entity in the value chain will have a significant impact on operator margins," comments Nick Holland, author of Pyramid Research's report "Rescuing 3G With Mobile TV."
This would explain why some MNOs are reaching up the value chain. Late last year, 3 Italia took the dramatic step of purchasing a regional Italian TV broadcaster; Canale 7. This has a number of advantages for the operator:
- Italia can develop their own TV programming � driving down their content costs and allowing their content to be resold to other MNOs.
- By understanding the TV broadcasting industry, 3 Italia is in a far stronger position to negotiate third party content than operators that are not directly involved in content creation, production and aggregation.
- The purchase provides 3 Italia with a Digital TV broadcasting license. 3 Italia now has the potential to also enter the broadcasting element of the value chain.
While an interesting tactical move by 3 Italia, it may not come to be fully realized as they will face stiff competition from the Telecom Italia/Mediaset joint venture to also roll out national DVB-H broadcasting in Italy. Nonetheless, 3 Italia may be the first of many MNOs that decide they are a little too divorced from the mobile TV opportunity and would like a larger slice of forthcoming revenues.
In March, Dutch telco KPN purchased Nozema Services, a company that specializes in providing technical services to broadcasters. This move will likely accelerate the rollout of digital TV services for KPN, including mobile TV.