Business: Stations Plunge Into Mobile

Apr 28, 2010  •  Post A Comment

By Debra Kaufman

At NAB 2010, new president Gordon Smith declared that broadcasters wouldn’t readily give up spectrum that the FCC — and telephone carriers — wants for mobile broadband. But behind the scenes, broadcasters intending to exercise that spectrum with Mobile DTV services are at least toying with the idea that they might partner with those same carriers. 

With the debut of Pearl Mobile DTV, the joint venture cobbled together by 12 major station groups, all attention is on the business plan that will accompany the new media launch. Just as Mobile DTV has made partners out of competing station groups, so more than one station group executive hinted at some kind of collaboration with the carriers for a subscription model.

“This isn’t a surprising move,” said Allison Dollar, CEO, Interactive TV Alliance and executive director, Mobile Excellence Awards, referring to Pearl. “It’s strategically sensible, and in a very general sense similar to why Canoe [the cable operators advertising joint venture] was created. The rub is going to be — as always — tactics. We’ll see what model they choose, and if they can be flexible enough as a group to make it work.”

Prior to the broadcasters’ entry into the mobile space, existing distributors of mobile video have butted heads over whether the subscription or advertising models are the answer to making money. Broadcasters appear to be poised to try both.

“I don’t think anyone is projecting money out of the gate,” said John Lawson, a founding board member of the Open Mobile Video Coalition, former executive VP of Ion Media Networks and currently principal of digital media consulting company Convergence Services. “It will take a number of years to really go positive. But it seems to me that there will be a lot of exploration; there are a lot of different scenarios to work with.”

In numerous discussions about the revenue prospects of Mobile DTV, broadcasters have said that offering free mobile content is crucial to the business model. But they are already contemplating an up-sell with premium content. “I think you’ll see a hybrid implementation along the idea that broadcasters would provide a lot of free content, which would drive consumer device penetration,” said Lawson. “Which would in turn create a base from which you could market premium or other pay services.”

Premium services would likely include the kind of programming seen on cable channels, such as sporting events or even a sports channel and high-end video, including long-form content. Both experience in Europe and Asia, and research data closer to home, has shown that, contrary to common belief, long-form content can work on the mobile platform.

“We know that people watch Mobile DTV at least 30 minutes a day and that number is increasing,” said Lawson, who believes that a DVR built into the mobile device will be a winning technology. “Above all, the user wants control,” he said. “They may start out watching as they’re getting ready for work, and then want to pause it, take it with them and watch the rest later.”

Advertising on Mobile DTV channels is getting a tryout over the July 4 holiday, when the Ad Council will run its “Buzzed Driving is Drunk Driving” campaign. But, with regard to advertising, the ultimate goal is to enable interactive ads targeted to individuals. “The best thing for all platforms would be not only attaching addressable, contextual ads, but enabling sales transactions for those brands,” said Dollar.

But Advertising 2.0, as it’s called, isn’t as easy as it sounds. In between the 30-second spot and the addressable ad, Lawson is hopeful that mobile GPS will make geo-targeting — for example, ads aimed at people in the airport — an intermediary step toward that goal.

Not everyone is so sanguine. Frank Barbieri, founder-CEO of Transpera, a mobile video advertising network that already works with numerous media companies from CBS Sports to Showtime, notes that Mobile DTV’s one-to-many broadcast model is a weakness when it comes to targeted advertising. “Broadcast advertising is a spray-and-pray method of hoping you hit the target, whereas IP-based ads are targeted and efficient,” he said.

Whether broadcasters turn to IP infrastructure or some sort of back channel in addition to the ATSC-M/H over-the-air signal to make interactive personalized advertising work, it reinforces the idea that a full panoply of revenue-creation ideas will require partnerships. And some of those partners might just be the same carriers jockeying for more spectrum for mobile broadband.


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