Mobile video has one major supporter – Zee Entertainment Enterprises head Punit Goenka. The Indian TV giant’s MD and CEO threw his weight behind the emerging medium during pay-TV body Casbaa’s recent annual convention in Hong Kong.
“This is the way of the future,” he said, speaking days before the launch of India’s first 3G services. “This is what is going to drive content for us.”
In an on-stage interview, Goenka revealed that he was prepared to invest at least 10% of Zee’s profits into developing mobile, echoing the approach the broadcaster took when it made its first forays in Indian markets outside its Hindi-speaking stronghold.
Goenka anticipates a rapid growth in mobile content consumption over the next three to five years, as young Indians, quick to adopt new technology, will be less willing than their parents to sit passively in front of a TV. “I have always believed India is a wireless country,” he said.
A new kind of content
Past experience shows that traditional content creators have struggled with new media, prompting Goenka to recruit a specialist mobile production team that understands technology and the role it plays in young people’s lives.
“I’ve already got a good bunch of youngsters working on this,” Goenka said, “and you’ll see more coming out over the next few years.”
The introduction of 3G services should help boost the number of people accessing the internet from their mobile phones in India from 75 million today to 325 million by 2015, predicted Neeraj Roy, MD and CEO of Indian digital content distributor Hungama Digital Media Entertainment, speaking on a separate conference panel focused on mobile.
By then, telcos should be making more than US$5 billion from value-added services, from around US$1.3 billion today.
“There are about 6.5 million transactions that happen on a daily basis, which are all paid for,” Roy said.
“Now with data being enabled on our networks, there’s going to be growing opportunity for video consumption and so on, albeit in moderation and at price points people have to be accustomed to, as far as India is concerned.”
Product versus business model
Mobile is far from becoming an accepted screen for watching TV, however. For example, only one in 25 people in Asia-Pacific who can watch video on their handsets have actually done so, noted Nicholas Wodtke, Disney Media Distribution’s regional business development and new media VP.
Meanwhile, mobile chip maker Qualcomm, one of the biggest investors in mobile broadcast technology, has decided to shutter its mobile TV service MediaFlo.
The move puts a major dampener on mobile TV’s future prospects, but it was the business model rather than the product that was at fault, argued Qualcomm MediaFlo business development director Ali Zamiri.
“Maybe if we had partnered early on with content providers and operators, forming a cohesive unit and agreeing on a certain business model, we probably would have had a better result and higher subscriber take-up,” Zamiri said.
Qualcomm had set up the network itself, wholesaling content it had aggregated through operators at US$15/month – a price few consumers were willing to pay for the channels on offer.
Cheaper phones, more viewing
Nonetheless, falling prices for smartphones, which provide a much improved viewing experience, hint at a brighter future for mobile video.
Increasing smartphone penetration in Hong Kong has resulted in a sharp increase in viewing per user, reported Han Willem Kotterman, chief strategy officer for Hong Kong network CSL.
“We see mass uptake,” Kotterman predicted, pointing out that data traffic on CSL’s network has already increased by 50 times within one year. “The issue is how are operators going to provide for the bandwidth, and that’s an issue we’re struggling with.”
This spells an end to so-called all-you-can-eat data services, the original stimulus for mobile internet use, a move AT&T has already taken in the US.
It will be a bold move to follow suit in Hong Kong, where five competing operators are all offering unlimited data packages at competitive prices.
Prices must rise, Kotterman argued, so operators can invest in additional bandwidth. “I think at some point, consumers will be willing to pay for a very good experience,” he said. “That’s what we are investing for.”