Fall in Viewer Retention Overshadows 36% Mobile TV Growth

February 13, 2008

This article is included in these additional categories:

Europe & Middle East | Media & Entertainment | Out-of-Home | Television

The number of former mobile TV users increased 68% in 2007, outpacing the 36% growth of the total market (January to November 2007), according to an M:Metrics study commissioned by Tellabs.

The survey of mobile subscribers in Europe and North America highlights a $270 million* opportunity – but only if operators meet user demands for quality and reliability improvements in the coming 12 months, Tellabs said.

Former users point to weaknesses in mobile TV services:

  • After price, former mobile users still cite quality and reliability as the second most important reason for their disenchantment.
  • Yet ex-users grant operators a clear window of opportunity: 60% would pay to watch mobile TV again if service quality and reliability significantly improved in the coming year.

By regaining just half the potential market lost due to quality and reliability issues, operators could secure that $270 million revenue projection, Tellabs said.

Year-over-Year Country Comparisons

The Tellabs-commissioned research on mobile TV users’ attitudes was conducted by M:Metrics in the United Kingdom, Germany, Italy, France, Spain and the United States:

tellabs-mobile-tv-ex-user-growth-us-uk-spain-germany-italy-france-20071.jpg

  • The UK had the highest ratio of ex-users citing quality and reliability as reasons for not watching mobile TV.
  • The United States has the lowest ratio of ex-users to users, at 1.3. Yet the attitudes of U. ex-users with regards to quality and reliability are very much in line with their European counterparts.
  • Overall mobile TV penetration in the United States lags behind all European markets but Germany.
  • Germany showed a staggering 159% growth in ex-users, while Italy has the highest percentage of mobile TV viewers.

“It’s tempting to celebrate the 36% growth in audience for mobile TV,” said Paul Goode, senior analyst, M:Metrics. “Yet operators will be disappointed; while the marketing dollars invested in this nascent industry appear to be working, the trend in ex-user growth is undoing all of this good work.”

“The challenge and opportunity for 2008 is to win former users back with better network quality and reliability – while getting it right with new users first time around,” Goode said.

High-bandwidth services such as mobile TV, combined with the increasing number of mobile users cause strain on backhaul networks. This capacity crunch can directly affect the quality and reliability of 3G services.

* The estimate of $270 million revenue is derived from the assumption of retrieving a potential 932,000 ex-users who were disenchanted due to quality and reliability issues, plus gaining an additional 3,151,000 first time viewers currently held back by the same issues. Assuming half of these (2,000,000) subscribed for a year with an average monthly fee of $11.30, this alone would result in an 54% increase in audience and an estimated $270 million extra in revenue.

About the study: The M:Metrics Survey of British, German, French, Spanish, Italian and US mobile subscribers age 13 and above was conducted in October 2007; n=34,675. US n=10,943.

Chart-Library-Ad-1

Explore More Articles.

Marketing Charts Logo

Stay on the cutting edge of marketing.

Sign up for our free newsletter.

You have Successfully Subscribed!

Pin It on Pinterest

Share This