Imagine you have 10 minutes of time to kill while waiting in line. You flip open your mobile and scan live snapshots of four 24/7 reality programs, reviewing info about the broadcaster, the show, and the number of current viewers. You choose one and get a live streaming video of the show with a scroll of the text chat interaction underneath.

Welcome to mobile BlogTV, a service introduced by Israeli mobile operators Cellcom and Hutchison’s Orange. The service is based on the technology of Tapuz People, a local company specializing in chat, mobile chat, blogs, and blog TV.

Andy Warhol would have loved it. Some “actors” sing or dance, some just talk or do funny sketches. But all of the channels star real people who use webcams or third-generation (3G) phones to create their own live TV show and beam it to the mobile network, creating a new revenue stream for the mobile operators and giving everyone their shot at—if not 15 minutes—at least 15 seconds of fame. More than 20,000 new blog TV entries are aired in Israel each month, says Dan Chen, head of Tapuz Mobile, a division of Tapuz People, which is in talks with European operators about expanding the service.

But BlogTV, like most existing commercial services, uses 3G mobile networks that are not equipped to handle mass-market demand. In fact, if only half of mobile phone users watch even a few minutes of television a day, analysts say 3G networks would quickly clog. Also, when comparing costs of capacity, mobile TV broadcast is cheaper than cellular alternatives. So, before we all start starring on mobile TV, the industry needs to move to broadcast technology.

To do that, issues involving standards, business models, handset battery limitations, content rights, regulations, and spectrum need to be resolved.

Sales Growth

If all these barriers can be overcome, pundits say, mobile TV will be big enough to improve profits for handset manufacturers and mobile operators alike. Broadcast-ready mobile handset sales will mushroom from 0.13 million in 2005 to perhaps 155.5 million by 2010, U.K. consultancy Eureka Research reckons, representing a €13.5-billion ($16.4-billion) market opportunity for handset manufacturers.

Informa Telecoms & Media predicts there will be close to 125 million broadcast mobile TV users worldwide by 2010, up from 130,000 in 2005.

Content providers are expected to reap bigger subscription and advertising revenues by tapping into a healthy percentage of the just over 2 billion mobile customers worldwide. Mobile operators will generate more revenues from their 3G networks, which will be used in combination with broadcast to allow consumers to interact with programming. Tickers and hyperlinks running at the bottom of the programming will also serve as a way for mobile operators to entice consumers to use their 3G portals. Broadcasters will take their cut of the business and market opportunities will abound for startups providing everything from chips for broadcast handsets to content creation and repurposing (see Nine Mobile TV Companies to Watch).

Nine Mobile TV Companies to Watch

It is little wonder, then, that mobile TV is expected to be a hot topic at the 3GSM mobile exhibition, February 13 to 16 in Barcelona.

“Mobile operators have multiple options in the mobile TV race, and the choices made now will determine who will cash in four years from now when the industry generates billions in revenues,” says wireless analyst David McQueen, author of Informa’s 2005 Mobile TV strategic report.

Why We’ll All Be Watching Mobile TV

But wasn’t 3G supposed to sell more phones and get users excited about mobile data? Operators spent millions and in some cases billions of euros and most got little in return. Why will mobile TV, which requires yet another infrastructure and is sparking yet another standards war, be any different?

Unlike 3G, mobile TV is not a technology looking for a killer application. Television is an application that most everybody already uses and understands. In fact, mobile TV is expected to be the seventh mass medium after print, recordings, cinema, radio, TV, and the Internet, says Tomi T. Ahonen, a London-based independent wireless consultant and author of a number of books, including the recently released Communities Dominate Brands.

Broadcast media eventually dominated slower media like print and recordings, and interactive media in the form of the Internet trumped all the others. Mobile TV could be even bigger, because it combines broadcast, multimedia, and interactive, giving it all the required elements to dominate lesser media, says Mr. Ahonen, a former head of Nokia’s 3G research center and its 3G business consultancy department.

Mobile TV has three unique benefits not available on any other media, he says. First, mobile telecom networks have a built-in payment mechanism. The Internet may be interactive, but if you want to buy something you have to give your credit card number or purchase e-cash on a system like PayPal. But on mobile telecom networks, payments can be built in at a click. Click-to-pay does not exist on any other mass media.

Second, mobile phones are always with us, unlike any other device. No other mass media is so often at our reach. Finally, mobile phones are now replaced at an average rate of 21 months globally. Consumers don’t replace PCs, TVs, radios, or MP3 players at such rapid rates, says Mr. Ahonen. “So when the Nokias and Motorolas and Samsungs decide to put this feature on our next phones, within only a few years we will all have them,” he says.

Standards War

Consumers will have to make some choices, though, because different mobile broadcast technology standards are competing globally to be adapted and evolved for use in mobile handsets.

South Korea got a head start with Digital Mobile Broadcast (DMB), a system that uses digital audio broadcasting technology to deliver TV, video, CD-quality audio, and data. Commercial services use both terrestrial and satellite technologies to reach nearly 400,000 consumers for mobile TV services. That number will rise to 1 million this year, says Jim O’Reilly, alliance and partner manager for iPark London, a branch of a South Korean government agency that promotes information technology and partnerships.

Proponents of competing standards say DMB will succeed only in South Korea. However, there is already take-up in Norway and Japan—and BT and Virgin Mobile are trialing DMB in the United Kingdom. The technology is also being tested in Germany and will be showcased at soccer’s World Cup this summer. Indeed, Informa predicts there will be 18.11 million terrestrial DMB subscribers and 15.02 million satellite DMB users in Asia, Europe, the Middle East, and Africa by 2010.

But by 2008 DMB could be losing ground to Digital Video Broadcast-Handheld, which is supported by major European and U.S. players. DVB-H adapts digital television for a mobile environment. Many tests going on now across Europe, in fact, are part of the Wing TV project, the European Union’s CELTIC initiative aimed at sustaining Europe’s leadership in mobile multimedia.

DMB supporters say DVB-H will incur higher network investment costs, face unknown spectrum allocation time frames and costs, and deliver inferior service due to time slicing, a burst mode of transmission which transfers data during short periods followed by longer periods of downtime.

Mark Selby, Nokia’s vice president of sales and multimedia, and a strong supporter of DVB-H, dismisses the criticisms and asserts that DVB-H delivers big advantages, including the ability to deliver 30 channels or more and the fact that it is based on an open standard that allows for multiple choices in chipsets and network equipment. And time slicing, as far as he’s concerned, is a plus because it stretches out battery life. Spectrum availability, he adds, is not a problem in Europe, outside the U.K.

Nokia, which does not plan to manufacture DVB-H networking equipment, plans to introduce its first handset, the N92, later this year. The phone will include a 30-second buffer allowing users to replay sports goals and record up to a half-hour of programming, says Mr. Selby.

, which does not plan to manufacture DVB-H networking equipment, plans to introduce its first handset, the N92, later this year. The phone will include a 30-second buffer allowing users to replay sports goals and record up to a half-hour of programming, says Mr. Selby.

Becoming Dominant

DVB-H trials are now being conducted across Europe, Asia, the United States, and South Africa. In January, CrownCastle, a Houston-based cellular tower owner with a nationwide footprint, announced that it will offer a DVB-H mobile television service called Modeo. Crown already owns 10,000 cellular towers that it rents to companies like Cingular and Sprint, so it already has relationships with the carriers. The company recently trialed its service to consumers in Pittsburgh and says it will launch Modeo in select markets later this year, though it would only disclose one, New York City. Crown plans to roll out the service to 30 markets in 2007.

Informa predicts DVB-H will become the dominant format in 2008, with significant presence in European and U.S. markets. By 2010, it says, there will be 74 million DVB-H users, accounting for over 50 percent of all mobile TV handset sales.

A Japanese terrestrial-based system, ISDB-T, is expected to have its first subscribers in 2006 and grow to 17.55 million users, all in Japan, by 2010.

The wild card is MediaFLO, a U.S. proprietary technology developed by Qualcomm. It claims to offer faster channel switching time, low battery power consumption, and the ability to support up to 20 streaming channels. But it requires everyone to have a Qualcomm chip embedded in their phones. Qualcomm says it is spending $800 million to build and operate a U.S.-wide network based on the technology and intends to lease capacity to operators, beginning late this year.

Qualcomm says Verizon Wireless will launch real-time mobile TV services over the MediaFLO network in approximately half of the markets already covered by the U.S. operator’s mobile broadband network. In Japan, Qualcomm has already formed a joint venture with Japanese carrier KDDI to explore the deployment of MediaFLO services in the country, according to Jeff Lorbeck, senior vice president and general manager of Qualcomm MediaFLO. Mr. Lorbeck says that Qualcomm will also target Europe but won’t say when. Qualcomm won’t buy spectrum or build networks outside the U.S.; instead, says Mr. Lorbeck, it is “encouraging appropriate wireless organizations to consider MediaFLO USA as a business model for mobile media delivery in their respective regions.”

New Business Models, New Players

Delivery of mobile TV service could have Disney, Time Warner, and Sony Entertainment competing with the telecom and broadcast industries—or fomenting new partnerships and marriages. “The difference with mobile broadcast TV is that it will not necessarily be the operators who own and build the TV network,” says Informa’s Mr. McQueen. “This will be left to others such as Qualcomm, CrownCastle, and cable operators like NTL, with the operators leasing service and capacity from them.

“This is a much better proposition for the operators as there’s no massive [capital expenditure], as there was with 3G, but it would depend on the business model implemented and revenue share or cost with the mobile TV broadcast network owners,” he adds.

The mobile operators’ strengths are providing networks for distribution, a return channel for interactivity, and relationships with the end user—taking care of service provisioning, billing, location-based services, and customer care.

But their future role is unclear. Informa’s report sees different models emerging. Mobile operators could choose to provide TV services over their own cellular networks, with no broadcast network interaction; operators could add overlay technologies called multimedia broadcast multicast service or broadcast and multicast service that enhance 3G services for broadcasting content; operators could be bypassed altogether by broadcast network operators for mobile broadcast TV, providing only an uplink; the mobile operators could take a leading role in broadcast TV, including some level of interaction with broadcast network services; or mobile operators and broadcasters could team as equal partners to take full advantage of the complementary nature of cellular and broadcast networks.

Trials and Tribulations

Operators are still trying to figure out what consumers want. French mobile operators Orange and SFR launched mobile TV services offering content from Jetix France—the new name for the Fox Kids channel taken over by Disney—and Jetix cartoons aimed at 10- to 12-year-olds turned out to be the most-watched programs on mobile TV. British operator 02’s trials in Oxford showed that adults also want the service: Most users averaged three hours of mobile TV per week, with some watching as much as five, says Mike Short, vice president of 02’s research and development arm. Findings from a six-month mobile TV trial from BT and Virgin Mobile were less encouraging: Many participants said they preferred to listen to digital radio rather than watch TV on their mobiles.

How much will consumers be willing to pay for all the fun? 02 thinks consumers will spend £8 to £10 ($14 to $17) per month on mobile TV, says Mr. Short. But in the U.S., only one in eight respondents to an IDC Research survey said they would be willing to pay for mobile video.

Then there are big doubts about mobile TV’s prospects if providers just squeeze current TV content into tiny screens, especially given the short blocks most consumers can spend watching a phone. “We need radical innovation,” says Mr. Ahonen. The real opportunity, he says, is creating personalized services that leverage interactive services and click-to-pay with the always-in-reach availability of mobile phones.

For example, a digital TV signal could have a hotlink embedded in a program and displayed on screen; a viewer would then click on the link to initiate an action such as popping a browser window or sending an email to order a product.

But battery technology and power management will also have to improve if the phone is to have enough energy to make calls and send emails after an hour of TV watching.

Rights issues on programs and other regulatory hurdles could also slow market growth. Operator 02, for instance, was surprised when bureaucrats said only people who paid a license fee to watch TV at home could participate in its trials, making people wonder if the government was contemplating a separate fee or tax for mobile TV.

Spectrum poses another problem: Frequencies aren’t yet available for DVB-H or MediaFLO in some European countries. In the U.K. the wait could be six years. And unless somebody steps in to coordinate, different European authorities could allocate different frequencies for DVB-H and hamper roaming.

Stay tuned—if you can find a frequency.