Incorporating the broadcast-based service into smartphones and tablets at MCV and the Moble500 Alliance are trying to do would bring a number of revenue-generating benefits to everyone involved. Content producers and syndicators, advertisers, local stations and wireless networks all stand to profit.
Math For Mobile DTV Adds Up For All
Stations seem to be falling into two camps when it comes to launching mobile DTV: those who have and those who will.
These broadcast-based methods for enjoying local television on smartphones and tablets are not to be confused with services like the controversial subscription service Aereo, which rely on Internet access and data plans.
That’s part of the reason the math for mobile DTV adds up for consumers and advertisers as well as for TV stations. It may take a while longer, but the math for supporting mobile TV will look good to wireless carriers as well.
So what are the key factors in a winning mathematical formula for mobile DTV? Erik Moreno, co-general manager of Mobile Content Venture (MCV), a joint venture of 12 major TV station groups, identifies four of them:
- Expanding the reach of a local station to the huge base of consumers that want to watch live television on the go;
- Extending the value of the station’s brand to the market’s fastest growing and largest media platform;
- Delivering a highly effective marketing medium to local advertisers; and
- Providing the most logical solution to the country’s cellular bandwidth challenges.
Moreno, who also is SVP, corporate development, for Fox Networks, a member of the MCV, outlined these advantages for members of MFM at our annual conference in May. Conference attendees also heard from top engineers for station groups participating in either or both MCV and the Mobile 500 Alliance, a consortium of 49 member broadcasting companies, including four public broadcasters.
I’d like to share a few of the details that our experts said add up in favor of a mobile DTV solution:
Cost: It will cost a typical TV station between $75,000 and $125,000 to upgrade its facilities to offer mobile DTV. The mobile DTV solution is an over-the-air (OTA) technology. This means that consumers will not need to spend money on a wireless data plan to receive a station’s mobile signal. Moreno told conference attendees that the average consumer spends $30 for 3 gigabytes of data, which translates to only two to three hours of rich video content. A data plan to support the kind of viewing consumers want would be cost-prohibitive.
On a macro level, MCV’s Moreno estimates the cost to upgrade the nation’s broadcast stations would be in the range of $200 million-$300 million. That compares to what he believes are tens of billions that wireless carriers must spend to support greater demand for data-driven applications.
To put that bandwidth demand in perspective, consider what Sandhi Kozsuch, director of mobile broadcasting for Cox Media Group, told attendees in that same session. He estimated that wireless networks must allocate as much bandwidth for every 20 video streams as they use for every 3,200 calls.
That’s not to say viewers won’t want to access mobile DTV on their smartphones and other carrier-connected devices. A research report released last month by Dyle found that more than half of U.S. adults aged 25-54 would like to watch TV on their smartphones. On the flip side, a recent Pew research report (The Rise of the Connected Viewer) found that more than over half (52%) of TV viewers use their smartphones while watching TV. TV/mobile multitasking among adults 18-24 jumps to 81%, followed by adults 25-34 (72%).
Revenue: As we’re seeing with connected TVs, using the same device for both viewing and interacting with content brings a number of revenue-generating benefits to everyone involved. Content producers and syndicators, advertisers, stations and wireless networks all stand to profit. OMVC, the Open Mobile Video Coalition, identified a number of these opportunities, which it categorizes as “subscription, advertising and sell-through transactions,” based upon its initial mobile DTV trials over the past several years.
In fact, both Dyle and MyDTV are incorporating revenue-generating applications into their operations. First, there’s the opportunity to increase ad revenue through increasing viewership. “Live TV shows like American Idol and sports events are tremendously popular to TV viewers, and those massive audiences would be the most difficult for wireless networks to support while adding additional ratings to local stations,” Moreno observed.
The Mobile500 service seeks to capture those viewers by providing C3 and C7 audience measurement. In addition to OTA simulcasts, the service will also feature a built-in DVR, video-on-demand (VOD) content and social media integration. Its second generation mobile digital television application also features closed captioning, interstitials and interactive banners. The banner application allows consumers to click for additional information using fully interactive functionality while both the TV station application and programming remain operating in the background.
“MyDTV isn’t just live TV,” said Sam Matheny, VP of policy and engineering at Capital Broadcasting, a member of the Mobile500. “Its revenue opportunities include premium channel content, C3 and C7 audience measurement of time-shifted viewing, and rich media advertising, including iTV opportunities on the program guide, pre-roll ads and interstitials that can be sold locally and to national advertisers.”
Dyle’s Moreno and Joe Weir, VP, digital, at Belo Corp., addressed the potential of combining the mobile DTV device’s geo-location capabilities with the larger audiences attracted by television programming. “Providing consumers with an opt-in feature will create the chance for acquiring marketable data for local advertisers,” Weir said.
To get an idea for the potential of mobile advertising, Weir doesn’t need to look beyond his own company. Our conference participants also heard presentations from two Belo newspapers that have successfully taken their digital advertising revenues from zero to multi-million dollar levels within two to three years, largely driven by their ability to deliver large audiences to mobile advertisers.
Richard Jones, digital sales director for DMN Media, a unit of Belo’s Dallas Morning News, urges local media companies to get into the mobile space quickly. “If you examine the data from Borrell and others, it’s clear that local businesses are moving more of their ad dollars into mobile.”
Jones also pointed out that lines between newspaper, radio and TV are going to continue to blur in the mobile space. “We must be a part of how that migration occurs if we want to capture those dollars going forward,” he advised.
Jones’ message of urgency bears heeding. We are in the midst of another year marked by disastrous weather that cuts electrical power for days at a time and sends TV viewers to the snippets of updates they can acquire from their local stations’ mobile applications. All the while, TV station generators are powering up studios, master control rooms and transmission towers.
Remember, one of the top findings from OMVC’s research, which was reflected in a study conducted for Dyle earlier this year, is the appeal of mobile DTV as a means to stay connected to local news and weather throughout the day. TVNewsCheck’s Harry Jessell has pointed out on a number of occasions that there’s real downside to allowing other providers become “go-to” sources for local news.
MCV plans to launch Dyle on more than 90 stations in 35 markets reaching more than half of the U.S. population by year-end. For its part, MyDTV is set for beta testing in several markets. Both services are targeting existing smartphone and tablet users by partnering with vendors such as Belkin and Elgato to offer plug-in accessories that utilize the ATSC-Mobile standard.
In addition, Dyle has teamed up with Metro PCS, which will be selling smartphones from Samsung and others in time for holiday shopping, a development that hopefully engenders greater collaboration between wireless carriers and broadcasters in the future. If we put the viewing public’s interests first, it can add up to a profitable future for all the stakeholders.
Is your station or station group among those that have launched mobile DTV? If so, I’d like to hear about your experience. Are you seeing usage trends that support the researchers’ conclusions summarized above? Is there evidence that it’s adding to viewer loyalty?
Please comment below, post a comment on MFM’s LinkedIn site, tweet @mediafinance or email me — [email protected]. I look forward to sharing your comments.
Mary M. Collins is president and CEO of the Media Financial Management Association and its BCCA subsidiary. Her column appears in TVNewsCheck every other week. You can read her earlier columns here.