STL Partners

Telco 2.0 Growth & Innovation

Mobile TV: going 'Round The Side' of telco networks?

Summary: Dyle TV, a new mobile TV broadcast network (supported by Fox), was presented at the Silicon Valley Brainstorm against the backdrop of Cisco's VNI (Visual Networking Index) research on forecast growth in mobile video traffic. It was argued that Dyle's model can both take the pressure off mobile operator data capacity by taking video traffic ‘round the side’ and make good use of TV Broadcasters’ spectrum. Could this model work, not only in the US but elsewhere around the world? (May 2012, Executive Briefing Service)

Dyle Mobile TV Image Telco 2.0

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Below is an extract from this 19 page Telco 2.0 Report that can be downloaded in full in PDF format by members of the Telco 2.0 Executive Briefing service here. Non-members can subscribe here, buy a Single User license for this report online here for £595 (+VAT for UK buyers), or for multi-user licenses or other enquiries, please email contact@telco2.net / call +44 (0) 207 247 5003. We'll also be discussing our findings at the London (12-13 June) New Digital Economics Brainstorm.

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Background

This is an extract of the analysis of a session at the Digital Entertainment 2.0 stream of the Silicon Valley New Digital Economics Executive Brainstorm, that took place on the 28th March, 2012. Using a widely acclaimed interactive format called ‘Mindshare’, the Digital Entertainment 2.0 stream enabled specially-invited senior executives from across the communications, entertainment and technology sectors to discuss and explore key strategic issues on the theme of ‘New Business Models in a multi-screen, 3D/HD, mobile world’. Presentations from the event can be found here and further STL Partners research on entertainment and content can be found here.

Mobile Video: How to Reduce Complexity

The hypothesis explored at this session (one of three) was that content owners and carriers want to deliver live video content to their customers but face significant barriers: hundreds of device types, various network conditions, bandwidth congestion, hundreds of simultaneous sessions, and a painful workflow.

Key questions:

  • How are new devices, formats and enabling technologies improving the situation?
  • What use cases are most compelling – for different markets, in different geographies?
  • What are the viable cost models? 
 
Presenters and Panellists:
  • Chris Osika, Senior Director IBSG, Cisco Systems presented an overview of Cisco’s VNI study of the future impact of video on communications networks;
  • Erik Moreno, SVP, Corporate Development, Fox Networks Group, presented on Dyle TV, a new innovation in Mobile TV in the US market; 
  • Andre James, Partner, Media Practice, Bain, also joined the panel.

The session was hosted and moderated by Andrew Collinson, Research Director, STL Partners. This Briefing summarises some of the high-level findings and includes the verbatim output of the brainstorm.

Stimulus presentations

Cisco’s VNI Study

Opening the session, Chris Osika, Senior Director IBSG, Cisco Systems, gave some background to mobile broadband data growth and especially video traffic, citing Cisco’s own VNI (Visual Networking Index) forecasts. As well as a summary of top-level findings below, here is a video of his presentation in full.

 

He covered changing end-user behaviours and business models in the TV and video sectors, citing tablets, multi-tasking and “TV Everywhere” services as catalysts of change, and you can see a video of this presentation below.

Figure 1 - Cisco VNI forecast growth of mobile data traffic

Mobile TV 'Round the Side' Telco 2.0 image

Source: Cisco
[Note: STL Partners will shortly be issuing its own analysis of the new Cisco VNI mobile data forecasts]

Counter-intuitively, he disagreed with part of the central notion of “Social TV”, stating that while consumers might use two devices simultaneously, it will likely be for two different experiences, not a single converged one. He also touched on the risks of video “breaking the network”, and subtly introduced the idea of using WiFi for offload, suggesting that this might be part of a service provider’s arsenal (rather than driven by the user, as is currently typical).

Figure 2 - Adoption of tablets & other examples of new consumer behaviour

Mobile TV 'Round the Side' Telco 2.0 image Fig 2

Source: Cisco

Dyle TV

Next, Erik Moreno, SVP Corporate Development, Fox Networks Group, introduced Dyle, a new partnership for mobile TV which Fox is working on with partners such as Comcast/xfinity. (Currently, five out of the top 7 US broadcast networks are participating – excluding ABC and CBS at present). It intends to use existing broadcasting technology to provide live TV onto mobile devices (including tablets & automotive screens). In essence, this is another attempt to create a mobilised version of broadcast (this technology is called ATSC-MH), complete with new chipsets to be included into handsets, and apps to decrypt and play back content. 

Figure 3 - An introduction to the Dyle mobile TV business model & technology

Mobile TV 'Round the Side' Telco 2.0 image Fig 3

Source: Fox Networks

However, unlike previous misadventures in mobile TV (think DVB-H in Europe, and Qualcomm’s MediaFlo network in the US), this time Dyle might be able to exploit a changing consumer behaviour mindset about on-the-go content (e.g. on tablets), coupled with different economics to 3G/4G usage – i.e. no data caps – as well as smarter and more user-friendly devices. Also, initially Dyle will be free-to-air, rather than demanding upfront monthly subscriptions, which has proven a major obstacle for occasional users.

He discussed the complexities of getting the service to market, juggling 11 different partnerships, cutting deals with content publishers, obtaining the first ATSC-MH integrated handset (from Samsung), starting build-out in 32 initial markets, gaining a distribution deal with MetroPCS and outlining its future roadmap such as an iPad antenna accessory from Belkin.

Figure 4 - Dyle mobile TV form-factors

Mobile TV 'Round the Side' Telco 2.0 image Fig 4

Source: Dyle

He sees four potential future revenue streams

  • Direct to consumer, which he thinks is “hard”
  • Wrapped up into MVPD services from cable companies wanting to offer TV Everywhere propositions
  • Targeted advertising – potentially location-based as well as individualised.
  • Distributed as an add-on to telcos’ voice and data plans

Figure 5 - Dyle has multiple business & distribution models

Mobile TV 'Round the Side' Telco 2.0 image Fig 5

Source: Fox Networks

Mr Moreno said that for mobile, “IP networks don’t scale” – especially for multiple viewers of live TV in the same location.

As part of the business rationale for Dyle, STL Partners thinks that it could help the TV industry justify continued ownership of spectrum in the face of a concerted effort by the telecoms industry to push regulators to repurpose it for mobile broadband.

To read this report in full, including...

  • Background
  • Mobile Video: How to Reduce Complexity
  • Stimulus presentations
  • Cisco’s VNI Study
  • Dyle TV
  • Panel Discussion & Delegate Input
  • Audience Q&As on presentations
  • Panel Discussion
  • Will Dyle work in the US and elsewhere? (Votes by region)
  • Verbatim delegate questions
  • What are the compelling mobile device video use cases? 
  • Conclusions and next steps
  • Key takeaways
  • Next steps

... and the following figures....

  • Figure 1 - Cisco VNI forecast growth of mobile data traffic
  • Figure 2 - Adoption of tablets & other examples of new consumer behaviour
  • Figure 3 - An introduction to the Dyle mobile TV business model & technology
  • Figure 4 - Dyle mobile TV form-factors
  • Figure 5 - Dyle has multiple business & distribution models
  • Figure 6 - Vote on Dyle model in the US
  • Figure 7 - Vote on Dyle model in Europe
  • Figure 8 - Vote on Dyle model in Asia

...Members of the Telco 2.0 Executive Briefing Subscription Service can download the full 24 page report in PDF format hereNon-Members, please subscribe here, buy a Single User license for this report online here for £595 (+VAT for UK buyers), or for multi-user licenses or other enquiries, please email contact@telco2.net / call +44 (0) 207 247 5003.

Key terms referenced: Cisco, Dyle. Mobile TV, mobile operators, telcos, US, Europe, Asia, MediaFlo, VNI.