- Category: July - August 2009
Finally the television experience has reached the small screen and most loved gadget as well – the mobile phone. But by trying to deliver rich content to millions of mobile users, the broadcast TV world and the mobile phone industry that rely on divergent technologies and business models had to overcome quite a few challenges. Traditionally, multi-channel operators had nothing else then the content they would like to push to the mobile user, but no direct contact with mobile devices. While content can be streamed via the mobile network, the impact of millions of subscribers simultaneously accessing content could hinder existing voice and data services. Mobile operators on the other hand face disputes with delivering streaming video over existing mobile networks because it can tax the cellular network and hamper in this way the ability to generate additional revenues with existing data services. Hence, they deliver often pre-recorded and streaming video but unfortunately, the quality can be poor and there can be slow download times and buffering.
Consumer demand for compelling video and other services requires additional investment in order to accommodate the impending strain on existing wireless systems and MediaFLO technology was specifically designed to meet all expectations and to overcome the challenges. Purpose-built as an end-to-end mobile multimedia delivery platform, the MediaFLO system receives live broadcast feeds, transforms content into a mobile format, and securely broadcasts to an unlimited number of mobile users. The MediaFLO broadcast mobile TV platform is designed for the delivery of high-quality entertainment and information, including streaming video and audio, clipcasting media, IP datacasting and interactive services. Their technology provides increased capacity and coverage, as well as reduced costs for multimedia content delivery to mobile devices and has been demonstrated on a wide variety of mobile handsets, personal media players, portable laptops and automotive entertainment systems.
FLO TV is a wholly owned subsidiary of Qualcomm Incorporated, whereas the "F-L-O" in MediaFLO stands for Forward Link Only, meaning that the data transmission path is one-way, from the tower to the device. Available through AT&T and Verizon Wireless, the FLO TV™ service offers an unrivaled lineup of entertainment, news, sports and kids' programming from the most popular networks, including CBS, CNBC, Comedy Central, ESPN, FOX, FOX News, MSNBC, MTV, NBC and Nickelodeon, so that programming partners and advertisers can extend their reach to consumers, who can watch the shows they love wherever they go.
Ali Zamiri is Director of Business Development for MediaFLO Technologies, a division of Qualcomm’s many divisions. Responsible for Asia Pacific, he has been doing business in the region for five years now and has been at Qualcomm for almost eleven years. Ali definitely enjoys promoting MediaFLO in the mobile TV world, telling Asian e-Marketing excitedly about MediaFLO’s opportunities in Asia and their technical trials which goes hand-in-hand with their formation of partnerships with existing multi-channel content providers/service operators: “I am actually involved in a couple of trials right now in Japan as well as talking to other customers in Asia. We have done so far 4 trials in all of Asia - Hong Kong, Taiwan, Malaysia and Japan - and we have two ongoing.”
MediaFLO was launched two years ago in the United States and is currently one of the largest mobile TV solutions in the world. Having in US so far their only commercial launch, the company expects to be successful in Asia where the mobile TV market is still relatively nascent and young. “We’re very excited about the opportunities based on the feedback on our trial and the feedback we are getting from our customers”, Ali told me and added: “There was a lot of hype and excitement about Mobile TV around 4 or 5 years ago, had ups and downs, and now it’s actually re-emerging as a real solution for the user. What we’ve tried to create with MediaFLO is an end to end solution that users will appreciate more than anything else. So we’ve tried to re-create that experience that you have in your home with digital TV, on your handset. For that, we’ve created a mobile solution from the ground up, and not as a legacy of some of the more standard solutions that are out there. That actually allowed us to create a better user experience, having in mind for instance optimized battery life, two second channel switching time, better screen resolution, 30 frames per second, stereo sound, and for mobile TV network operators probably more important than anything else - greater capacity, which means more channels or more content and thereby an opportunity to generate more revenue.”
Asked to characterize the unique value propositions of MediaFLO and how he thinks his company differentiates from competitors Ali said: “I think because MediaFLO was created from the ground up for the mobile environment, the user experience is unique. From the operator’s point of view, you can actually have more capacity or better coverage so if you’re concerned about capital expenditure, investing in base stations and site planning and such, the way we’ve created MediaFLO is to enable the operator to decide how to tweak their network. So in some cases it’s actually half the capital expenditure of some of the competing technologies out there, which can be genuine savings, when you’re talking about a billion dollar network planning scheme, vs. double of that. But if you’re investing dollar for dollar the same amount, in a network plan, then the additional capacity you get from MediaFLO is seen as a huge value added in the eyes of the operator”. The MediaFLO system obviously provides a number of unique benefits to mobile TV users, multi-channel operators and mobile operators, by offering all parties the benefits from a compelling service that both emulates and transcends the traditional television experience. MediaFLO’s strategy in the US was unique in that way that they had spectrum they wanted to use efficiently (UHF channel 55). Ali explained: “In other markets, like Japan or Malaysia, we’re actually targeting both paid TV operators and wireless operators. The reason is that paid TV operators like e.g. Astro, the second largest paid TV operator in Asia, we did a trial with, have content rights. They understand how to operate a paid TV network and put programming together, and know how to market that programming and how to operate in network operations centers. A normal wireless operator might not have this expertise. Now the great thing is, Astro and Maxis are sister companies, so as a result our trial was quite easy because it was no effort bringing them together for a successful trial. So it really depends on the market. MediaFLO’s goal is to actually provide technology, license our technology, and allow for the big players in that market to go ahead and build out that network and drive adoption.”
Globally, the number of mobile phone users is expected to rise to more than 4.9 billion by 2012, according to Informa Telecoms & Media. And Ali Zamiri stated during our meeting that he expects mobile TV to have mass market adoption in the next 3 years: “I don’t know if you’ve seen the numbers that have come out, but a quarter of a billion users of mobile video services are in Asia, which is greater actually than the rest of the world combined. I think Japan and Korea led things off by offering 5 or 6 free to air channels, where users got used to viewing mobile video. You’re seeing it in different pockets of Asia, mobile video on top of 3G network, the cellular and so when you come in with the efficient broadcast network where the cost per bit delivery is significantly cheaper than delivering over the 3G network, there is a business case to be made for broadcast type of network, for mobile broadcast network. And as users get used to it, we are thinking of a hybrid pay TV free to air type of business model, where you have 4 or 5 free to air channels, maybe a public broadcast channel where you can watch the news and some general reports.” Another interesting point is that MediaFLO is actually not only a mobile TV type of network or platform, it’s also a platform to deliver content, even any kind of content. According to Ali, that is something that is catching on in Japan more than anywhere else, claiming: “The Japanese recognize that with MediaFLO it’s actually easy to deliver large files, be it e-comic books or the ringtone of the day, it can be delivered to all users. Any kind of content the operator wants to send out can be pushed to the user, who therefore doesn’t necessarily have to go out and look for things instead it will come right to him and he can make a choice of whether to keep it or not.”
Ali said further: “MediaFLO is allowing value-added services as well. What I mean by that is the ability to actually interact with the content you are receiving, both in terms of advertising interaction, so if you’re watching an ad, and you get a little pop up while you’re watching the advertisement. We demonstrated such an add-on service for Red Bull recently at a trade show. Red Bull drinkers see a little pop up on their mobile phone that asks them if they would like to participate in a contest to get the chance to win something. That contest actually generates traffic on the 3G network, because when users interacting with the ad they are actually going over the reverse link, or the 3G network, using that operator’s network and generating traffic for them. So it’s really a win-win for all stakeholders in the game.”
MediaFLO’s key customers are in Japan, Korea, China and Taiwan and each operator looks at them a little bit differently, but in general the most interest and possibilities for success, are in markets that are used to paying for TV. Ali gives the example: “A place like Taiwan for instance is similar to the US in that way that 85 percent of the population pays for their TV; the cable TV service is similar to that in the US, whereas in Japan it’s actually the opposite. Only 15 to 20 percent actually pay for their TV at home. Another thing that we have discovered is that markets that actually watch a lot of TV at home are likely to be very successful for mobile TV. The Americans watch an average of 4 to 5 hours of TV a day at home, same with the Japanese. In fact I think the Japanese are the number one consumers of TV in Asia. In some of the consumer research that we’ve done, we’ve found that 80 percent of them have said that they would actually subscribe to our service, based on what they’ve seen in demonstration. So we’ve got two very different trials going on in Japan right now. One of them is in Okinawa, the South, and that’s an interesting trial because we’re actually doing it in VHF spectrum. So far a lot of our other trials have all been in UHF. The Japanese government has allocated VHF spectrum for a commercial mobile TV service offering, later on. In Japan, you don’t bid an auction and you don’t pay for the spectrum, you actually have to demonstrate your technology. In this trial in Okinawa, MediaFLO is showing that it works according to the specifications that we’ve laid out to the government for gaining trust. We’ve even brought in Toyota to participate in our trial and they’re testing now MediaFLO in their car systems. We announced that just in April and it looks like that they are very happy with our technology as well. So what we’re basically trying to show is that MediaFLO works on the handset, works in the car, and on other platforms. We’ve also got another trial in an area of Japan called Shimane, but that trial has more to do with digital signage. For that trial, we’ve teamed up with the local government, the local broadcasters, and the tourism board to actually do in-store promotion. So when people go into a store in Shimane, they actually see more displays, advertising, and promotions for mobile TV. So we partnered up with Samsung as well and send content to these displays overnight, as the broadcast network isn’t used at night. Basically the local broadcasters have capacity at night as they usually shut the network off as no one is watching TV at night. So at 3 am in the morning they send this content and it gets stored, and throughout the day it’s being played back. Tourism type ads for the region, and various commercials, and users can interact with that. In Japan we’re still looking at various business models and are excited about the possibilities there as well.”
It seems that MediaFLO’s management is willing to put more resources toward making successful deployments in the region. They’ve seen some of the success in Japan and Korea and a potential market. “90 percent of the hand sets in Japan now have some kind of a mobile TV reception, and that bodes well for MediaFLO reception”, Ali said and refers to the US market, where the analog switch off occurred just a few weeks ago, which actually created a huge opportunity for them in the US as they are now able to reach 100 percent coverage in the US. “The fact of the matter is that up until now I wasn’t able to use my phone while I’m driving from my home in San Diego to San Francisco, up the coast. Now that we’ve actually have the analog switch off, I think this is going to create a tremendous opportunity, our partners there, Verizon, AT & T will actually be more likely to then push more our way”, he said. Although the market in South East Asia is according to him still relatively nascent his company and the operators see with satisfaction the increase of mobile gaming and multimedia usage in the region. “We’re trying to get the phone being used and see it interacting with people, as that’s really what excites the operators more than anything else”, Ali said. “I think what you’re going to see is definitely not going to be a passive viewing experience. It’s about getting the customer to take part, whether it’s through chatting, or polling, or voting. American Idol is a good example. You see someone singing a song that you remember, because they sing old songs like Stevie Wonder, and you think about how you would like that ring tone, well actually you can get it right there, or. So we want people to participate and see them shifting from a passive to an active experience.”
Determination of the right content mix is crucial, Ali explained: “For example in the US, which is commercial already, our strategy was kids, news and entertainment in terms of content. What we found is that certain types of content have done better than others, so live sports programming, Tiger Woods golf, the French Open, the Basketball College Tournament, events that take place sometimes during the weekday, when people are not at home, have done very, very well. Obama’s inauguration and the elections have done incredibly well. In fact the inauguration was probably one of our most watched events in the past 2 years, especially since it took place on a Tuesday morning, people were at work and they wanted to feel like they were part of history. And that is really what we’re trying to strive for in this market as well.”
One great thing about Asia is, according to Ali, that the Asian consumers are much more likely to actually use their phone beyond just standard SMS and voice and emphasizes that the iPhone has actually helped to develop that multimedia experience for everybody in the value chain. But obviously you need for a successful mobile advertising business a certain level of number of users, a critical mass to get advertisers to actually put money toward mobile advertising. Just developing the service and getting it commercial is not enough. It has to work properly to give users a comfortable feeling with the service and that’s most probably the most important task. Only then are they willing to provide information about themselves, their hobbies, their likes, their demographics, their age, that kind of information that are most important for advertisers’ targeted campaigns.
By Daniela La Marca