Mobile Television and Its Impact on Business

8/8/2019 Mobile Television and Its Impact on Business

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Mobile television andit s impact on business

The big picture onsmall screen opportunities

Media & Entertainment


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Whether it s the t raditional press and broadcast media, or the multitude of new media, audiences

now have more choice than ever before. For media and entertainment companies, integration and

adaptability are becoming critical success factors. Ernst & Youngs Global Media & Enter tainment

Center brings together a worldwide team of thousands of professionals with the industry knowledgeto help you achieve your potential a team with deep technical experience in providing assurance,

tax, t ransaction and advisory services. Our global media and entertainment professionals work to

anticipate market trends, identify the implications and develop points of view on relevant industry

issues. Ultimately, it enables us to help you meet your goals and compete more effectively.

Well use this study and other reports as a means of sharing information with you. It s one of the

ways Ernst & Young makes a difference.


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Mobile television and its impact on business

Contents

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4

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8

10

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14

16

17

Mobile TV service delivery

Introduction

Mobile TV deployment What success lookslike outside the US

Three forces driving mass adoption of mobile TV

Customer acceptance and adoption

Talking about the generations The ascendance of Y and Z

So what? The implications of mobile TV forvideo content producers and aggregators

Whats next?Some recommendations from Ernst & Young

Contacts


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Introduction

The big picture on small screen opportunities

In Ernst & Youngs 2008 survey of 41 CEOs of global media

and enter tainment companies,2

21%thought mobile

content would be the most likely medium for consumers to

access entert ainment in t he future. Likewise, such mobile

manufacturers as Nokia and Ericsson and operators such as

Sprint and 3Italia have invested in the development of both

content and technology to support the adoption of mobile

television.

There are two key drivers, part icularly in the United States,

propelling the marketplace toward mass adoption of mobile TV

and video. One is the maturation of Generation Y (the 18 to

27-year-olds) and Generation Z (12- to 17-year-olds). The other

is the convergence of these core elements of t he entertainment

process (Figure 1):

Networks1. The deployment of third and fourt h generation

mobile network technology providing high speed data t ransfer

with low latency

Devices2. The adopt ion of converged mobile devices (CMDs)such as the iPhone, Google Phone (G1), Blackberr y Bold

and Storm, and the Nokia N96with their dramatically

improved user interfaces, screens, available applications

and graphics

Content3. The availability of premium, free-to-air and internet

mobile content combined with new applications and tools that

will drive significant new advertising and licensing revenues

for content producers and broadcasters

US consumers increasing adoption of mobile TV services will

present companies with new business opportunities and revenue

streams, from content licensing to advertising, along with thechallenges that invariably accompany growth. What may be just

as important, t hese services also will provide media companies

with direct access to t heir key demographics, Generations Y

and Z. Enter tainment on the move is already popular. But if

mobile consumers embrace mobile video in the same way they

embraced digital music, the entertainment industry is in for a

sea of change.

Will they or wont they? And if they do, how far will they go?

Those were the questions that technology and content providers

began pondering with the release of the video iPod in 2005,1

when the mobile TV debate began in earnest. Would consumers

watch television shows, movies and other entert ainment

on a small screen? So far, t he answer has been yes. Not a

resounding one, perhaps, but at least a qualified yes, bolstered

largely by early adopters. At t he very least, t he infrastructure

is finally laid out. Broadband is virtually a given for home PCs,

game consoles and other media devices. This massive increase

in bandwidth has paved the way for widespread acceptance of

alternative distribution channels for a variety of content. The

questions to ponder now are more about how much money

consumers will spend on mobile technology and content

and what successful companies are or should be doing to

maximize their revenue from t his burgeoning base.

Mass mobileTV adopt ion

Content

Networks Devices

1 Cool, a video iPod. Want to watch Lost? New York Times, 16 October 2005, viaDow Jones Factiva.

2 Ernst & Young, Fast forward: How CEOs are balancing the transition to the digital future,October 200 8.

2

Figure 1

Global Media & Enter tainment Center


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3

Advertising will be a dominant business model for monetizing

mobile TV in the short- to mid-term, with ad-supported content

models driving a much faster consumer acceptance rate and

wider use of mobile video and TV. Mobile TV advertising will

broaden the content owners advertising platform offerings,

presenting a new and more valuable way to enhance media

companies cost per thousand impressions (CPMs) for cross-

platform advert ising sales. And with the increased bandwidth

available with G3 and G4 technologies, consumers will be able to

download videos to t heir mobile devices from online websites.

That makes content companies much more empowered

within the mobile distr ibution chain as they can provide

videos directly to the consumer without having to negotiate

licensing or carr iage agreements with the mobile operators.

Galvanizing these new and potentially lucrative

opport unities, however, will require expanded ad sales

capabilities that stretch the boundaries of currentprocesses, technologies and people across all functional

areas of t radit ional media companies.



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There is little doubt that consumers are rapidly adopting

technologies and services that blur t he lines between

entertainment and communication. With the maturing of a

generation raised on the concept of anytime, anywhere,

anyhow media consumption combined with the convergence

of mobile network infrastructure, next-generation handsets and

enhanced content, mobile TV represents a lucrative opportunit y

for media and enter tainment companies as well as mobile

network operators (MNOs). Analysts estimate that in t he United

States, mobile TV viewers will grow from 24 million in 2008 to

47 million in 2012, a 17%compound annual growth rate (CAGR).

(Figure 2)

Likewise, revenue from mobile TV services will experience

corresponding growth dur ing the same period, from under

$1 billion in 2008 to almost $1.7 billion in 2012.3

(Figure 3)

Some analysts are forecasting even larger mobile TV sales.

As the demand increases, so do the delivery methods available

to consumers. Currently there are three primary models for

delivering TV programming to mobile handsets premium

services, ad-supported services and a hybrid of the t wo.

Premium services. This model requires a fee to be paid by

the end-user to receive television content which is delivered via

their MNOs network. Qualcomms MediaFLO is the exception to

this model, delivering their TV programming over the wireless

network they own and operate. Such content producers as

MTV Networks or ESPN license their programming to a content

aggregator (e.g., MediaFLO or MobiTV), which contract s with

a mobile network operator for content delivery. The MNOs act

as the front-end for the service, arranging for end-user billing

and providing customer service. Mobile users pay a premium

fee to t he MNOs for access to the TV programming. This is the

dominant model in the US today, with consumers paying from

$10 to $30 per month to receive live, streamed or on-demand

programming via their mobile devices.

Mobile TV service delivery

0

10

20

30

40

50

2007 2008 2009 2010 2011 2012

15.2

24.3

35.0

41.8

45.746.5

Figure 2

US mobile TV and video users, 2007-2012 (M)

Ovum, Wireless content forecasts and methodology, May 2008

Figure 3

US mobile TV and video revenue, 2007-2012 ($M)

Ovum, Wireless content forecasts and methodology, May 2008

0

400

800

1,200

1,600

2,000

2007 2008 2009 2010 2011 2012

516

794

1,083

1,400

1,6041,697

3 Ovum, Wireless content forecasts and methodology, May 2008 .

4


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Mobile television and its impact on business 5

Ad-support ed services. With this model, consumers can

use their mobile device to receive broadcast television

signals sent directly f rom their local TV stations. While

no intermediary (e.g., MNO) is necessary to provide or

deliver the content, an MNO may charge a nominal fee to

the end-user for equipping their mobile device with the

necessary chip to receive the broadcast TV signal. This

model is based on the t radit ional television broadcast

model whereby the local station pays to license content

(e.g., syndicated programming) or produce their own

content (e.g., news broadcasts) and receives revenue from

advertisers based on the number of viewers.

Hybrid of ad-support ed and premium. This combo

model requires the consumer to pay a premium for

receipt of the content and also includes some amount of

advertising. MobiTV, one of the two major TV programming

aggregators in the US and Canada, is an example of the

hybrid model. They not only receive a subscription fee

for the use of the service but they also sell advertising.According to their latest report , approximately 10%of their

revenue is earned via advert ising.

In an effort to accelerate the ad-supported model and

make mobile TV a viable business opportunit y, more

than 800 TV broadcasters in the US have joined together

to form the Open Mobile Video Coalition (OMVC). The

OMVCs mission is to jump-star t the process of creating a

new technical standard that would enable mobile phone

users to receive digital t elevision signals from local TV

stations. The group believes the underlying technology

within the US has to be one standard if t hey want to

seize an opportunity of this scale4

and their Advanced

Television Systems Commit tee will select that standard.

At the International Consumer Electronics Show on

9 January 2009, the OMVC announced their intention

to launch mobile, digital television service from 63 TV

stations in 22 markets, covering 35%of US televisionhouseholds. Among the 63 stations are 14 NBC

affi liates, 9 ABC affi liates, 9 CBS affi liates and 5 FOX

affi liates.5

Consumers continue to make it clear that they want

access to content anyt ime, anywhere and with relative

ease. Although all three methods for delivering on-

demand content will gain some traction in the mobile

TV marketplace, it will likely be the ad-supported,

free-to-air broadcast TV service that ultimately drives

mass consumer adoption in the US. With consumers

reluctant to pay for subscription-based content, online

advertising has become the dominant business model.

This trend is demonstrated by numerous online

content of ferings, from AOLs removal of it s walled

garden approach to content to t he New York Times

multiple attempts to launch subscription services.

Both services have since adopted advertising-

supported models.6

And since consumers are

accustomed to seeing advert ising while viewing

television, this business model will be consistent

with their non-mobile media experience.

4 Mobile videos final front ier, Telephony, 1 November 2008, via Dow Jones Factiva, 2 008 Penton Business Media; Mobile DTV 101, Open Mobile Video Coalition website, www.openmobi levideo.com/about%2Dmobile%2Ddtv/mobile%2Ddtv%2D101/ , accessed13 November 2008 .

5 OMVC demonstrates future of mobile DTV and details init ial broadcaster roll-out plans,Business Wire, 8 J anuary 200 9, via Dow Jones Factiva.

6 New York Times dumps paid for content , Brand Republic, 19 September 2007, via Dow JonesFactiva; AOL flips business, offers service for free, CMP TechWeb, 2 August 2006, via DowJones Factiva.


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Of the key markets that have seen widespread adoption of

mobile TV, Japan and South Korea stand out . These two

countr ies have successfully implemented ad-support ed, free-

to-air broadcasting of mobile television. In Japan, television

broadcasters send their signals to viewers using the free-to-

air 1Seg technology, based on the Integrated Services Digital

Broadcasting-Terrestr ial (ISDB-T) standard. ISDB-T uses 6MHz

bandwidth channels divided into 13 segments.

A high definition television (HDTV) broadcast signal utilizes 12 of

those segments, leaving the remaining one segment for mobile

content. Hence the name 1-segment, or 1Seg.7

Broadcasters

deployed 1Seg for mobile viewers in April 20 06. Over 41 million

1Seg handsets have been shipped since tracking began in

June 2006 and the country now has nearly 70 million viewers

of mobile television. In August 20 08, 1Seg-enabled handsets

accounted for 85%of all mobile phones shipped within t he

country.8

(Figure 4)

South Korea deployed its Terrestrial-Digital Multimedia

Broadcasting (T-DMB) service in 2005 and has since grown its

audience to more than 18 million viewers of free-to-air content

roughly 38%of the populat ion. MNOs such as SK Telekom have

entered the mobile TV arena by offering on-demand television

content over t heir 3G wireless networks via subscription or on a

pay-per-use basis. Although operators report t hat approximately

two million users watch video clips that they download to their

phones, the predominant method for mobile TV viewing is still

the free-to-air T-DMB service.9

3Italia, an MNO in Italy, successfully launched a mobile TV

service using the Digital Video Broadcasting Handheld (DVB-H)

technology in 20 06. More than 100,000 people signed up within

six weeks of its launch to watch live the World Cup action; t he

company now report s over 850,000 subscribers. 3Italia offers

12 channels of television programming, including its La3 channel

for which 75%of the programming is produced by the operator

in-house. Although the service was originally fee-based, 3Italia

announced in June 2008 t hat it would make its programming

available for free between the hours of 0800 and midnight to

spur additional demand for the service.

As these case studies from Japan, South Korea and Italy

illustrate, the ad-supported model drives significant consumer

adoption and, in turn, advances the business opportunit ies to

those along the mobile TV value chain. That said, these three

markets are the exception rather than the rule, with adoption

worldwide happening at a far slower pace.

Mobile TV deployment What success looks likeoutside the US

7 Ovum, Mobile TV in Japan, February 20 08; Broadcasting: does mobile matter? Marketing,17 September 200 8, via Dow Jones Factiva. Technology (A special report): Homeentertainment coming to a t iny screen near you, The Wall Street Journal,8 December 2008, via Dow Jones Factiva, 2008 Dow Jones & Company, Inc.

6

8 Japan sees domestic mobile phone shipments decline in 1h 2008, MIC - Asia Express,22 August 2 008 , via Dow Jones Factiva, 20 08 Market Intelligence Center; Japan mobilephone shipments down 48 pct in Aug., Jij i Press English News Service, 8 October 20 08, viaDow Jones Factiva; Broadcasting: does mobile matt er? Marketing, 17 September 2008, viaDow Jones Factiva.

9 Four standards currently propel mobile TV, Microwaves & RF, 1 March 2008 , via DowJones Factiva.


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Ovum, Mobile TV in Japan, February 2008 ; Japan sees domestic mobile phone shipmentsdecline in 1H 2008, MIC - Asia Express, 22 August 200 8, via Dow Jones Factiva, 2008. MarketIntelligence Center; Japan mobile phone shipments down 48 pct in Aug., Jij i Press English News

Service, 8 October 2 008 , via Dow Jones Factiva; Japan mobile phone shipments down 10 .7 pct inMay , Jij i Press English News Service, 8 July 2 008 , via Dow Jones Factiva; Japan mobile phone


Figure 4

Accumulated shipments of 1Seg handset s (M)

40

35

30

25

20

15

10

5

0

45

2 2 23 3

45

7

8 8

10

1213

14 15

18

20

23

26

28

31

33

37

4041

Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug

2006 2007 2008

shipments up 7.6 pct in J an., Jij i Press English News Service, 10 March 200 8, via Dow JonesFactiva; Shipments of mobile phones with digital TV funct ion surpass 20 mil., NTT Topics, 18February 200 8, via Dow Jones Factiva, 2008 Gale Group Inc.; JijiPress daily Japan business

news briefs (JAN. 16), Jij i Press English News Service, 16 January 2008 , via Dow Jones Factiva;Japans mobile phone shipments down 30.4 pct in Oct., Jij i Press English News Service, 11December 2007, via Dow Jones Factiva.


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11 MTV Networks launches its first ever ads on premium mobile VOD, PR Newswire (U.S.),11 September 20 08, via Dow Jones Factiva.

12 iPhone 3G, Apple website, www.apple.com/iphone/ , accessed 6 February 200 9.

On-demand cont ent . As with any emerging platform,

the ability to supply consumers with compelling content is

crucial to sustaining and accelerating growth. And one of

the features that makes content compelling is the speed

and ease with which consumers can access it. The flurry

of activity from the MNOs and media and enter tainment

companies str iving to provide mobile TV and video is

representative of the increased focus on giving these

consumers what they want.

Premium content providers, such as MobiTV and

MediaFLO, have invested heavily in acquir ing short-form

content, opt imized for small screens and targeted toward a

part icularly youthful audience. Content creators like MTV

Networks are embracing this new licensing and distr ibution

platform at an accelerated pace MTV Networks has

more than 80 distr ibution deals and 40 on-demand and

streaming mobile video services worldwide.11

Wide scale availability of t hird-party device applications,

such as the 15,000 applications currently available for

the Apple iPhone,12

enable users to access video content

beyond that which is offered by the mobile operator.

These applications represent a material shift a real

paradigm shift in how consumers access content f rom

their devices. They are now able to bypass the mobile

operator s subscription-based video services in favor of

video content that is being delivered by sites supported by

an advertising-based business model (e.g., Joost).

As the effor ts surrounding the development of network

infrastructure, mass introduction of multifunctional mobile

devices and compelling content all align, mobile TV in the

US is poised for mass consumer adoption.

The stage is set for new opportunities among telecommunications

and media and entertainment companies. But their audience is an

elusive one, even in the best of t imes. Now, divining their needs

and delivering the products they want are challenges that likely

have been eclipsed by the challenge of retaining jobs and staying

afloat in this turbulent economic climate.

0

100

200

300

400

2007 2008 2009 2010 2011 2012

Figure 7

Worldwide converged mobile device (CMD) shipments (M)

IDC, Worldwide converged mobile device 200 8-201 2 f orecastupdate, September 2008, Document #214292.


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Customer acceptance and adopt ion

US customers have not responded at t he speed of t heir

counterparts in Japan, South Korea and Italy. Why not? What is

standing in the way of all-out acceptance of mobile TV? A 2007

survey by Yankee Group Research (considerably in advance of

the economic downturn) suggested a range of reasons from

battery usage and screen size to subscript ion costs and higher

monthly fees. (Figure 8)13

The reticence may not be an all-American issue. A European

survey that same year also found that lack of interest and high

cost were preventing mobile TV adoption. Among the European

mobile users aged 16 and older that responded, 53%said

they had no interest in watching mobile TV and 74%were not

interested in watching free ad-supported programming over

their mobile phones.14

Of those that do subscribe to mobile TV, most prefer to view

short clips rather than full-length programs. Early results have

shown viewers typically watch for an average of 34 minutes per

week.15

Short movies, news, cartoons and sport highlights would

therefore make excellent content for mobile TV. (Figure 9)

10

13 Yankee Research Group, Inc., Anywhere consumer: 2007 US entertainment survey, December2007.

14

New survey by Mobixell shows potential for ad-sponsored content in rich media services likeMMS and mobile video clips, PR Newswire (U.S.), 2 J une 2008, via Dow Jones Factiva.

News video clips

Music video clips

Sports video clips

Comedy/entertainmentvideo clips

Live TV shows

Weather video clips

Other types ofvideo clips

Live TVcomedy/entertainment

Live TV sports

24%

21%

18%

11%

6%

5%

3%

3%2%

2% 1%

Live TV weather

Live TV music

Figure 9

Content t ypes preferred by cur rent mobile video users

IDC, US mobile television and commercial video 2008 -2012 forecast, May 20 08, Document#212089

Time and technology may have worked their magic, however,

and despite these reports of tepid interest for mobile TV, the

landscape is changing. Historically, the viewing experience was

suboptimal. Small screens with slow response times, content

that was difficult to access and manage, and high-cost monthly

subscript ion models with limited content were drawbacks that

stymied adoption.

Todays converged devices are more aesthetically appealing,

with larger screens and sharper graphics for a better viewing

experience; traction of ad-supported business models,

particularly free-to-air; and content that meets consumers

demands, such as short-clips and live sport ing events. This new

landscape fuels strong adoption trends and will provide fert ile

ground for mobile TV to flourish.

The current economic crisis must be factored into any

forecasts of mobile TV uptake rates, especially given recent

announcements of decreasing handset sales from some of the

major device manufacturers.16

However, downward market

cycles do eventually recover and more favorable economic

conditions may spur the eventual upswing in mobile video.

15 IDC, US mobile television and commercial video 20082012 forecast, May 2008, Document#212089.

16

1,70 0 jobs t o vanish as Nokia retrenches, International Herald Tribune, 18 March 2009, viaDow Jones Factiva, 2009 The New York Times Company; Sony Ericsson issues profit warningas mobile phone sales slump, Guardian Unlimited, 20 March 2009 , via Dow Jones Factiva.

Figure 8

Why arent you int erested in subscribing to a mobile TV service?

Note: Multiple responses allowed.Source: Yankee Group Research, Inc., Anywhere consumer: 2007 US entertainment survey, December 2007 .

0% 20% 40% 60% 80% 100%

Dont want video on mobile phone

Dont want to pay a monthly fee

Screen t oo small

Too expensive

Already pay too muchfor wireless services

Will eat up battery

76%

68%

59%

45%

41%

35%


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Global Media & Enter tainment Center12

With their increasingly advanced media and mobile habits, t he

18 to 27-year-olds of Generation Y and the 12 to 17-year-olds

of Generation Z play a major role in mobile TV adoption in t he

US. Gen Y already spends more t ime with interactive media than

their older counterpart s of 30 and above. They are active phone

users and twice as likely as the general population to watch

videos on their phones,17

spending 20%more time with media

and with their cell phones each week than US adults in general.

(Figure 10)

Whats especially interesting is that they may be more amenable

to the idea of ad-supported content. A study conducted in the UK

found that younger adults were willing to watch short targeted

ads in exchange for discounted or free mobile TV. Not so for

adults. The results of a similar survey indicated that the majority

of adult users would not be interested in ad-supported video.18

Teenagers are a key mobile demographic in the US, with over

70%adoption reported in 2007.19

This generation, which grew

up using small-screen, hand-held gaming devices such as the

Nintendo DS, is very comfortable using a mobile device for

more than simply making phone calls. According to reports,

teens send or receive seven times more mobile texts than calls

and are more likely to access the internet for entertainment

and information purposes with their phone than the average

mobile user.20

As Generations Y and Z grow older and their spending power

increases, mobile television adoption should accelerate within

the US. With the I want it now bat tle cry of the consumer

ringing in their ears, content producers and advertisers must

prepare to leverage the mobile TV platform to its best advantage

to engage and entertain these mobile evolutionaries.

Talking about the generations The ascendance of Y and Z

Figure 10

Hours spent on interact ive mediaHours per week (Gen Y vs. all adult s)

Forrester Research, Inc., Building Gen Ys multichannel media profi le, 23 May 2008

0 2 4 6 8 10

Playing video games

Use the internetfor personal purposes

Use a cell phone

Watching DVDs or VHS

4.4

1.8

8.1

5.6

8.9

4.8

6

4.2

Gen Y (18-27) All adults

17 Forrester Research, Inc., Building Gen Ys multichannel media profile, 23 May 2008.18 eMarketer, Mobile video and television, August 2 008 , citing data from QuickPlay Media;

New survey by Mobixell shows potential for ad-sponsored content in rich media services likeMMS and mobile video clips, PR Newswire (U.S.), 2 J une 2008, via Dow Jones Factiva.19 eMarketer, Kids and teens: communications revolutionaries, November 200 8, citi ng data from

Pew Internet and the National Commission on Writ ing.20 eMarketer, Kids and teens: communications revolutionaries, November 200 8, citi ng data from

Harris/CTIA and Nielsen Mobile.


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So what?The implicat ions of mobile TV forvideo content producers and aggregators

The tipping point for mobile TV and video has strategic and

tact ical implications across the entire value chain as well.

Content producers must be able to create and make available

compelling content to increase viewing demand and build brand

loyalty in mobile viewers. Broadcasters must develop the ability

to optimize their advert ising inventor y. Marketers should develop

simple, 15- to 30-second advertisements to fi t the attention

span and smaller viewing screens of mobile TV viewers.

Most import ant, all members of t he value chain must develop

the data systems and analysis capabilities to monitor, measure

and monetize the growing mobile television audience. An

estimated 10%of incremental revenues are currently attributed

to inaccurate content and sales report ing.21

Capturing this

incremental revenue opportunity, in addition to future revenues,

means addressing these operational challenges as quickly and

comprehensively as possible.

As mobile technology personalizes enter tainment, enables business and influences lifestyles, it becomes more closely entwined with

everyday life. Likewise, mobile exerts a similar influence on the M&E value chain, inextricably linking businesses and processes from

creating the content through measuring and monetizing the results.

21 Mobile videos final front ier, Telephony, 1 November 2008, via Dow Jones Factiva, 2008Penton Business Media; Mobile DTV 101, Open Mobile Video Coalition website, www.openmobil evideo.com/about %2Dmobile%2Ddtv/mobile%2Ddtv%2D101/ , accessed13 November 2008 .

14

Develop/acquire video content

that addresses unique mobile

market demands

Design website video

content to work on mobile

applications

Ensure content is tagged

and available to be used in

formats appropriate to mobile

Enable cost-efficient

content versioning, storage,

identification, t racking,

privacy, security and delivery

Secure the legal rights to use

content in mobile formats

Contentcreation

Distributionand delivery

Audienceaggregation

Reporting,measurementand analysis

BandwidthStorageAccess

Connectivity

ControlAdaptability

ChoiceSpeed

Consumerforces

Technology

forces

Ernst & Young media and entert ainment value chain

Leverage mobile

operator inf rastructure

to explore new business

models

Deliver video content

tailored to mobile

platform and markets

Ensure website

infrastructure is mobile

compatible

Develop capabilities to

deliver and synchronize

advertising across

mobile, online and

traditional platforms

Determine opt imal CPMs

for mobile video ads and

ensure sales force is t rained

to sell mobile video ads

Leverage mobile audience

to access a new consumer

base with products tailored

for previously untapped

markets

Explore new business

models to push more

content and build new

consumer base

Access previously untapped

markets to build a broader

global presence

Ensure sales systems can

support mobile operator

sales feeds

Ensure sales/royalty

systems can apportion

revenues for new business

models (e.g., advertising,

subscriptions)

Ensure that finance systems

can capture and report on

new revenue streams

Develop capability to report

sales and measure product

ROI across mobile, internet

and traditional businesses


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All narrative aside, the simple proposition is that mobile TV

presents a $1.7 billion opportunity22

and maybe even more.

Asking some key questions can help you determine how

prepared your company is to take advantage of t his opportunity.

Do you have a clearly articulated strategy that leverages

the global reach, untapped markets and new consumers

accessible through mobile video distribution networks?

Are you developing new products and services that address

the unique features of mobile markets?

Do you have a strong sense regarding which business models

will opt imize your revenues from your mobile products?

Are you building an integrated operational business plan

(across business units or brands) that maximizes your content

and infrastructure investments?

Are you conducting mult i-platform data capture and analysis

of customer viewing, engagement, impact, behavior, targeting

and purchase transactions?

Do you know that your new partners are report ing and paying

accurately on the sale of your content?

Do you have accurate end-to-end cost transparency and

controls?

Can you develop t imely, achievable operational management

reporting and analysis?

Do you have accurate demand forecasting, planning and

pricing analysis at a platform, device, network, geographic or

demographic level?

Can you ensure responsive content management and rights

clearances?

Are the sales feeds from your new distr ibution channels

integrated into your sales and royalty processing systems?

Are you able to conduct reliable revenue recognition and

streamlined transaction reporting, billing and collection?

Whats next?Some recommendat ions from Ernst & Young

16

22 Ovum, Wireless content forecasts and methodology, May 2008 .

Given the existing acceptance level, we look for mobile

television in the US to really take off in the 2009-2012 period,

predominately supported by advert ising. As content companies

increasingly leverage a direct-to-consumer model via their

websites, look for an increase in margins as well as in consumer

access. Taking full advantage of this opportunity requires media

and entertainment companies to develop mobile strategies that

involve adapting current systems, processes and people across

all funct ional areas of traditional media companies. What we

may also see intensify is the batt le between tradit ional media

giants, new media companies that didnt even exist a few years

ago and telecom operators all vying for their share of this

surging, emerging market opportunity. The likely winners will be

the enterprises that can deploy these enhanced technological

capabilit ies to make their programming and associated

advertising more att ractive and accessible to consumers and

thus more valuable to advertisers, gett ing the most f rom this

distribution platform and its shape-shifting audience. The

challenge now is how to priori tize.


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Contacts

Telephone Email

Global Media and Entertainment Center

John Nendick, Global Sector leader (Los Angeles, US) + 1 213 977 3188 [email protected]

Sylv ia Ahi Vosloo, Associate Director, Market ing (Los Angeles, US) + 1 213 977 4371 sylv [email protected]

Karen Angel, Global Implementat ion Director (Los Angeles, US) + 1 213 977 5809 [email protected]

Beth Bemis, Global Markets leader (Los Angeles, US) + 1 213 977 3208 [email protected]

Heat her Briggs, M&E Senior Manager (Los Angeles, US) + 1 213 977 4219 heat [email protected]

Mike Fischer, M&E leader (New York, US) + 1 212 773 7553 [email protected]

Yooli Ryoo, Knowledge Manager (Los Angeles, US) + 1 213 977 4218 [email protected]

Peri Shamsai, M&E Senior Manager (New York, US) + 1 212 773 9172 [email protected]

Pam Walker, Events Coordinator (Los Angeles, US) + 1 213 977 3046 [email protected]

Global Area Leaders and Advisory Panel Members

Farokh T. Balsara (Mumbai, India) + 91 22 4035 6550 [email protected]

Mark Besca (New York, US) + 1 212 773 3423 [email protected]

Neal Clarance (Vancouver, Canada) + 1 604 648 3601 [email protected]

Noriharu Fujita (Tokyo, Japan) + 813 3503 1355 [email protected]

David McGregor (Melbourne, Aust ralia) + 613 9288 8491 [email protected]

Gerhard Mueller (Munich, Germany) + 49 891 4331 13108 [email protected]

Bruno Perrin (Paris, France) + 33 1 46 93 6543 [email protected]

Michael Rudberg (London, England) + 44 207 951 2370 [email protected]

Global Service Line Leaders and Advisory Panel Members

Thomas J. Connolly, Global M&E Transaction Advisory Services leader + 1 212 773 7146 [email protected]

Alan Luchs, Global M&E Tax leader + 1 212 773 4380 alan.luchs @ey.com

Paul Macaluso, Global M&E Transact ion Advisory Services leader + 1 213 240 7040 [email protected] Pimlott , Global M&E Tax leader + 1 213 977 7721 [email protected]

Gregg Suther land, Global M&E Business Advisory Services leader + 1 720 931 4435 gregg.suther [email protected]

Advisory Panel Members

Howard Bass + 1 212 773 4841 [email protected]

Glenn Burr + 1 213 977 3378 [email protected]

Vincent de La Bacheler ie, Global Telecommunicat ions leader + 33 1 46 93 6205 vincent .de.la.bacheler ie@f r.ey.com

Rick Fezell, Global Technology leader + 1 408 947 6568 [email protected]

Bud McDonald + 1 203 674 3510 [email protected]

Tim Teagle + 1 213 977 3216 t [email protected]

Ken Walker + 1 805 778 7018 [email protected]

17


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of which is a separate legal entity. Ernst & Young

Global Limited, a UK company limited by guarantee,

does not provide services to clients.

2009 EYGM Limited.

All Rights Reserved.

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This publication contains information in summary form and is

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judgment. Neither EYGM Limited nor any other member of the global

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should be made to the appropr iate advisor.

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