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Near-Term Mobile TV Only for Early Adopters

Music, browsing and video services will be the key drivers behind the growth of the Western European mobile entertainment market, according to a new report published by Analysys. However, in the near term mainstream consumers won't likely subscribe to these new services.

Music in particular is expected to experience tremendous growth, with revenues rising by more than 75 percent per year to reach EUR3.4 billion by 2011. “The mobile platform has rapidly acquired a significant share of the digital-download music market,” says report author Dr Windsor Holden. “As handset storage capacity increases, as 3G adoption accelerates and as more cross-platform solutions are deployed, we will see this share increase still further.”

“An increase in 3G adoption would also result in a sharp rise in the usage of streamed video services, with content such as sports and adult entertainment likely to generate the highest revenues,” Holden adds.

However, the report cautions that while revenues for mobile broadcast TV services will be considerable in the longer term, operators will struggle to recoup their initial infrastructure and spectrum costs.

“Until TV reception chips are embedded in the majority of handsets, there will be virtually no revenue from casual viewers,” warns Holden. “At the outset, content will only be accessible to that small core of users who are prepared to purchase specialised devices and pay a significant premium for them.”

Key findings from the report include:

- Total mobile content revenue is forecast to grow at a compound annual growth rate of 29.2 percent, from EUR4.9 billion in 2005 to EUR23.4 billion in 2011.

- Complex pricing and billing structures have deterred potential repeat purchasers, and operators must implement a range of transparent pricing options while devising a variety of attractively priced content bundles.

- The mobile value chain has become increasingly elaborate and confused, with operators, owners of content rights and vendors seeking to become aggregators.

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