Sky has offered mobile TV services for two and a half years, and during this time we’ve learned a great deal about what works on mobile and what doesn’t. We’ve also conducted a lot of research and identified some of the challenges the industry faces in ensuring the continued growth of mobile TV, in terms of both content delivery and pricing.
In terms of consumption, many industry observers expected the commute to be the time when most people watch mobile TV, but we’ve found that there are only small spikes at commuting times.
Interestingly, viewing traffic remains consistent from 9am to 9pm every day, and actually peaks at weekends. This is in part down to the attractiveness of live events and sport, with Sky Sports 1 as the most watched mobile channel in the UK. News is also popular - Sky News and Sky Sports News are consistently in the top five most watched channels.
Today we offer mobile TV channels on Vodafone, T-Mobile and Orange. Some of the channels are linear simulcasts – the same transmission at the same time as you would see on digital satellite – and some are made-for-mobile versions. In addition to linear channels, recent customer research shows users want more long-form content and the ability to watch it on-demand.
Although people are already watching mobile TV, there are still some clear improvements that need to be made to the overall experience. Customers often lament the quality of video over 3G, complaining about issues such as picture quality, as well as the difficulties of getting and keeping a signal. To help counter this, deploying a broadcast mobile TV technology would offer some clear benefits. Firstly, the picture quality is vastly better on digital broadcast services, and graphics and sporting action is pin-sharp.
Secondly, there would be no problems getting on the network. Customers that use 3G mobile TV tell us that it can be hard to get a picture. This is because only seven people covered by one mast can watch video at one time. You can imagine the problems on a Saturday at 3.45pm in Ealing Broadway when everyone tries to check the half-time score in the same location at the same time.
However, in addition to these network issues, investment also needs to be made in handsets. Encouragingly, we are now starting to see a range of mobile TV handsets from major manufacturers like Nokia, Samsung and Motorola that offer better screens and much more attractive ergonomics.
And we’re also beginning to see some signs of sustainable revenue models. Sky came into the pay TV market in 1989 based on the belief that customers would pay more for a choice of content and services, and we believe this to be true for mobile TV.
I expect the business model for mobile TV to be based on the same principles as regular pay TV. Although principally with a subscription business, around 10% of Sky revenue comes from advertising. For Sky Mobile TV, we expect a similar revenue split to apply.
However, there is still work to be done to get mobile advertising to take off and enable us to reach these numbers. To gain the interest of advertisers, mobile needs to reach the scale, quality of product, and immediacy and accuracy that other media, like TV and the internet, offer to advertisers already.
The biggest challenge to mobile video is still consumer awareness, so while we don’t know how big the opportunity is, we are doing all we can to find out by creating and marketing the best possible service, with great content.