This week I’ve been enjoying a private e-mail exchange with someone working in the Mobile DTV technology space. And since I’ve invested some time into shaping my thoughts, I wanted to include everyone in the conversation.
Of course, this is only my side of the discussion, as I don’t have permission to post the full thread.
In short, I was pitched on some points of why I’ve been wrong about Mobile DTV so far. Needless to say, I haven’t changed my opinions. But I have fleshed them out a bit…
On Spectrum Efficiency
Mobile DTV is often touted as being highly spectrum-efficient when compared to delivering video via the web and 3G/4G wireless networks, and technically I agree it is. But consumers don’t care. And carriers don’t care. Indeed, carriers would rather consumers “waste” their spectrum than allow usage to shift to broadcast spectrum — which is beyond their balance sheets. Better to build out spectrum capacity and charge for it than allow free over-the-air broadcasts if you’re AT&T or Verizon or Sprint and so forth. The spectrum argument is attractive to engineers and engineering-minded bureaucrats. But it’s a non-starter in the broader market.
On Consumer Usage Patterns
Consumers use video in a fairly limited way when mobile — they consume it in little bites here and there, they don’t generally watch whole shows. You won’t watch a full episode of Judge Judy standing in line at the bank (hopefully!). To effectively serve that narrow niche, broadcasters would have to engineer new niche program streams separate from their core broadcast services. But local broadcasters don’t know how to do that efficiently and I would argue the business models of niche markets are so different they can’t do it. National third parties could do programming and distribute it, but they can do that via the Internet already, so why negotiate with hundreds of cranky terrestrial broadcast corporations already losing money? Bite-sized program streams and content snippets are tailor-made for web economics and direct distribution.
On Technology Changes
Broadcast companies are setup around long-term business models — buy your transmitter and run it for 20 or 30 years. When I worked in public TV in Alaska I discovered this problem: the business leaders and engineers were repeatedly upset by the fact that they had to buy and re-buy equipment, software and services endlessly as the DTV and HD systems came in the door and were upgraded / replaced as fast as every 2-3 years (because those systems were built on rapidly-changing IT gear). Sure, those engineers are learning to cycle faster, but the balance sheets of these corporations likely aren’t keeping pace. Mobile DTV would be yet another rapidly-cycling technology cost depressing profits.
Furthermore, mobile devices are undergoing incredibly rapid development. The arrival of the iPad, the new iPhone (presumably in June), constantly-improving Android devices and so forth are changing the game far too rapidly for Mobile DTV — a niche technology — to keep up. Chipsets would have to change too fast, software would have to change too fast and that would affect both users and broadcasters. Consider the problem of adding H.264 to the ATSC standard — when will that reach consumers?
When there are already perfectly good ways to deliver video online to millions of users, making the argument for yet another layer of complexity and cost for manufacturers, carriers, software developers, broadcasters and users just doesn’t make sense. Mobile DTV is an awesome buggy whip for an age when cars are rapidly taking hold.
My correspondent suggested Mobile DTV 2.0 (the next revision, not the current one) could bring interactivity to the mix. Stop right there — I’ve heard this before! It was one of many hyped ideas in standard DTV and it has never come true. In an age of the web — the ultimate interactive platform — the notion that Mobile DTV can out-web the web is delusional. That’s what a salesman from a Mobile DTV vendor will tell you: “Wait until version 2!” I’d give up on the interactivity notion right away because that platform is already built. It’s called the Internet (and you’re soaking in it!).
On Killer Devices and Use Cases
If Mobile DTV is to be useful to a mass audience, it’s likely to be as a supplement to the in-car DVD player we see today, assuming the chipset is cheap enough to add to these devices. (HD Radio / iBiquity made a huge mistake by charging upwards of $50 per device for licensing, thus stunting adoption to this day.) But if you can get “TV” on your in-car DVD player, that would make sense to me. A combined DTV / Mobile DTV chipset would be ideal, to allow for stationary and mobile viewing. For an RV user, that would be great.
As for uses, anything real-time is ideal. Traffic, weather, news alerts, sports, etc. Sadly, traffic updates are already available on GPS devices, which is where they’re more useful anyway (though some have suggested GPS and Mobile DTV functions could be merged in one device). And weather would be nice, but it’s not critical because it’s rare that real-time weather alerts are all that important. News alerts would be good, but that’s available via news radio programming, so you have built-in competition there. Sports is okay, but again, there’s radio. Finally, at some point you’ll have a computer in the car hooked to the Internet that will gather and share ALL that information and more via voice command and display.
So while we can imagine some applications for Mobile DTV, the use-cases proposed are either too narrowly-defined to be market-relevant or are duplicated via web-based functionality.
Mobile DTV has been heavily promoted as an add-on chipset and feature for smartphones. The resolution of Mobile DTV is so low (less than 480p currently) that’s not an issue. Indeed, the latest Android devices and the next iPhone have very high resolution screens, making native Mobile DTV images small enough to fit in a “window” on these devices! Indeed, on the next (rumored) iPhone you’ll be able to both shoot and watch HD video (720p) on an HD-capable screen (960×640).
For Mobile DTV to even approach viability for broadcasters and users, it will have to be ubiquitous in smartphones — the soon-to-be-dominant interactive platform for the next 10 years. But to really catch on, Mobile DTV broadcasters and programming would have to be ready on Day 1 across most of the U.S. (highly unlikely). Even assuming that feat were accomplished, just compare the coverage patterns of terrestrial TV and 4G/3G/2G wireless. I think we can already see the Internet will beat local terrestrial broadcast for smartphones.
My own predictions in the mobile space related to Mobile DTV:
- Smartphone devices (from iPhone-size to iPad-size) will be the central interactive communications platforms for a majority of the U.S. as laptop and desktop PCs begin to decline (Apple already knows this, HP just recently figured this out). Mobile media creation and consumption will be centered on these highly mobile devices. They will trend toward being smart devices hooked to data pipes with increasingly smart traffic management, prioritization and multicasting to profitably manage traffic growth.
- In-car entertainment will remain dominated by radio (not HD Radio) for 10-15 years, but will have strong growth in 3G/4G-based Internet application platforms (Pandora, etc.) as car manufacturers spread those devices and subsidized connections (a la OnStar) to more car models. Entertaining kids in the car will be done via DVD and/or stored video on smartphone-lite devices (iPod Touch, iPad) because parents want control over what the kids watch and broadcast doesn’t offer that control.
- Any other devices that gain wide adoption will be single-purpose simple devices that prove their value on their own, not in combination with other devices. Smartphones will be the primary multi-function devices (convergence devices). Everything else has to stand alone (divergence devices).
- Satellite radio will survive, but will never be as dominant as terrestrial radio.
- Internet radio — via mobile devices — will grow, but will not surpass terrestrial radio for 10-15 years and may never surpass terrestrial radio if programming evolves appropriately.
- Mobile DTV will not gain significant traction with broadcasters (engineers love it, business people don’t) or users (the use-cases are too weak). At best it can hope for penetration rates similar to HD Radio.
- Mobile interactivity (or interactivity in general) will be more important than mobile passive media consumption. That is, people would rather interact with social networks than passively consume media while mobile.
I have nothing technically against Mobile DTV. It’s a significant achievement in that sense. But I can’t see how it makes it big in this mediasphere. The stars are aligned against it. It’s Dead On Arrival.
Our TV engineering friends shouldn’t feel bad, though. Even the brilliant engineering minds working at Google make amazing technologies that just don’t catch on (Knol, Buzz, Wave, Profiles, Voice, Chat, etc.).
Sadly, this is getting to be a pattern in the TV world… DTV was a great idea 15 years before it was finally implemented. Now it’s mostly irrelevant because the vast majority of mainstream America is already on cable/satellite and has been for years. Mobile DTV is just a weaker echo of DTV: too little, too late.
Given this analysis, all I can do is hope public TV people out there avoid spending too much time or money on this distraction.
That said, if lobbyists get to Congress and force-feed you Mobile DTV via “free” CPB appropriations (that won’t cost you later), take the money and run! Hell, HD Radio was similarly “free” to most public radio stations in recent years — no harm done there (but no realization of HD Radio’s promise, either).
Of course, pull out this post and rub my nose in it 5 years from now if I’m wrong. I could easily be wrong. Wouldn’t be the first time.
4 thoughts on “Why Mobile DTV is DOA”
Specifically with respect to ‘On Technology Changes’, it is interesting that the Board and senior management were very aware of the impact to the business model based on the decision to go digital – which was not optional – but failed to reflect the impact both in budget and staffing changes required to meet the new requirements. Most media companies operate with razor thin margins, so I expect this experience is not particular to public broadcasting. This points out why industry change is driven by new market entrants, where the entire business model including distribution is not anchored to a legacy capital/asset base.
Agreed. I think there was some recognition that the new technologies were different, and maybe would be replaced faster, but the speed with which systems had to be replaced was breathtaking to folks not accustomed to cycle times in the general business IT world.
A key example was the massive AVID-based HD-capable video editing system bought ahead of the DTV transition. It was deeply obsolete in 3 years, outmoded by smaller, faster systems that cost less and offered far more storage capacity. Though grants paid for its acquisition, no one sought grants for replacement that quickly. Indeed, equipment bought on many federal grants must be held for at least 10 years — during which time the bulk of the value of the acquired gear has long been gone.
The companies that fared best were those that delayed purchases and installation of HD and DTV gear until the last possible second. Which is always true in IT, but for folks accustomed to buying transmitters and analog sound boards, this was a novel concept. And PBS engineers nationwide have always taken great pride in pushing the technology envelope with broadcast, so the temptation to join early was built-in.
Ummm…nitpicky, I know…but iBiquity doesn’t charge $50 per device for licensing the technology. That’d be kinda tough when the cheapest HD Radio out there costs only $40. (the portable Best Buy / Insignia FM radio). IIRC the licensing fee was always less than $5, and today it’s more like $1.50.
iBiquity does charge a hefty premium on the licensing fee for a TRANSMITTER. This is true…it’s several thousand dollars and if you’re an FM station *AND* you have multicast channels, you get charged a percentage of the revenue earned off the multicast channel. (there’s no percentage or ongoing fees for just having a digital version of your analog channel)
But for the radios themselves, the licensing fee is minimal.
What’s killed HD Radio is its inability to get widespread adoption in cars as original factory equipment. And the reason for that is largely because HD Radio has no one major company promoting it the way XM and Sirius did. So satellite companies were able to effectively stymie HD adoption by automakers because of contracts that forbade it, and more just that satradio looked a lot more promising thanks to a huge blitz of ad dollars. That stalled things to the point where mobile internet is now looking like the next big thing and that perception (wrong as it is – the internet has nowhere near the data capacity needed to surpass AM/FM) is going to hurt HD Radio adoption even more.
Do you know if licensing rates are posted anywhere? I’d love to see them.
And I have to wonder if the licensing is really closer to $5 for the receivers, because I just bought a new car stereo a couple months ago and it had every feature under the sun EXCEPT HD Radio.
That suggests a combined licensing and chipset cost of perhaps $15+ because margins on electronics are fairly thin. I was shocked to get iPod/USB functionality, a remote, CD, radio and so forth and only get “HD Radio Ready” with this new stereo.
And worse yet, to actually buy the HD Radio upgrade and get it installed would have been $50-100.
This is why both Bluetooth and HD Radio have had such a hard time with market penetration: they’re too expensive.
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