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Going with the FLO  MOBILE ENTERTAINMENT 2009: As part of C21's continuing Mobile Season, Kamil Grajski (below), president of the FLO Forum, argues that the MediaFLO free-to-air mobile TV technology can succeed in Europe.  It is consumers who ultimately determine the success of a service business model, and in the case of mobile broadcast television, free-to-air services appear to be driving consumer adoption in greater numbers than their subscription-based counterparts.This has brought about a shift in the strategies of some of the leading mobile broadcast TV protagonists. The strategies we now see emerging will seek to blend free-to-air with the opportunity to upsell premium services. Subscription services were favoured in the early days of mobile TV as the business model of choice. However, companies, such as those in South Korea and Italy that launched with an exclusively pay-TV model have now added free-to-air services as well. Similarly, in the US, MediaFLO recently added a free-to-air promotional channel that gives consumers an immediate, hands-on experience of the service, to highlight the depth and breadth of the service content line-up. The penetration of free-to-air-enabled devices may follow a similar consumption model to camera phones. While it has taken between six and seven years to reach around 60% penetration for camera phones in developed markets, the adoption curve is expected be significantly faster for mobile broadcast TV. South Korea is an ideal case in point. When the Satellite-DMB-based service launched in 2005 as TU Media, it chose to pursue the subscription-based route. When, in December the same year, the service was challenged by the government and broadcaster-backed free-to-air service using terrestrial-DMB (T-DMB), the two business models went head-to-head at the mercy of - or to the benefit of - the consumer. At the start of 2008, T-DMB had amassed more than eight million subscribers compared with S-DMB’s 1.2 million. TU Media’s only period of strong growth came during the first six months of commercial operation, when it was the market’s only mobile broadcast TV solution and was therefore unchallenged by T-DMB. In any other market around the world, 1.2 million subscribers would be hailed as a phenomenal success. However, because this figure is dwarfed by its free-to-air rival, it is coming under increased scrutiny. In Europe, 3 Italy, by far that country’s most successful mobile broadcast TV service provider with more than 700,000 subscribers, became the continent’s first mobile operator to offer a free-to-air bouquet when it launched its mobile TV offering, La3, in June last year. La3 offers a number of channels including Rai 1, Rai 2, Sky Meteo 24, Current TV and Mediaset, as well as the operator’s own in-house channel. The service is funded by interactive advertising. The operator is yet to comment on the success of the service, but it is fair to speculate that perhaps, as in the case of TU Media, 3 Italy saw an opportunity to drive consumer adoption rather than chase revenue through a more direct appeal to typical broadcast TV viewing habits. The growing realisation of the need to blend free-to-air with premium services underscores the importance of capacity as a key differentiator. With FLO, for example, a typical European Union service provider can carry 30 streaming QVGA channels in 8mHZ of spectrum at 25 frames per second (the minimum necessary for a high-quality viewing experience), with fast channel change times and with bandwidth left over for additional services, such as IP datacasting, broadcast of video clips and so on. Another key player in mobile broadcast technology in the EU delivers about half that number of channels - and when higher channel counts are noted, it is subject to the compromise of a reduction of frame rate to 15 frames per second, such as in the early days of video over the internet. So what does all of this mean? With services offering increased capacity, the service provider can flexibly allocate and adjust offerings between free-to-air and subscription-based models. These are early days in mobile TV; flexibility, experimentation and adaptation based on consumer responses are key. Free-to-air TV is something consumers certainly understand. One can imagine a baseline free-to-air offering of content similarly available today via terrestrial broadcast, with premium services attached to unique events, such as major sporting or entertainment events. In conclusion, market data has shown that an important driver for mobile broadcast TV adoption is price, and that with free-to-air programming, consumers will adopt the service. The grand experiment underway is how to build a viable business around a blended advertiser-supported free-to-air service in combination with paid services. So the answer to the question of whether free-to-air mobile television can succeed in Europe is a resounding yes. Kamil Grajski 13 Mar 2009 © C21 Media 2009 
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