Italians Jump Ahead In the Mobile-TV Game

(c) MocoNews from Wall Street Journal article.

The Wall Street Journal has a detailed account of the Italian mobile TV sector, with a suggestion that this could be a good model to follow in other countries because the broadcaster and (two) operators are working together. Of course, it requires that the respective companies be willing to do what the Italian companies did…
“Mediaset, controlled by former Italian Prime Minister Silvio Berlusconi, owns the frequencies over which Italy’s DVB-H signals are transmitted. The company leases a portion of the network to Telecom Italia and Vodafone. More importantly, Mediaset provides a broad menu of cellphone-formatted video channels that the mobile operators can offer their customers. Operators have the option of finding their own content as well…The model enables both sides to retain their most important assets: The operators still have their relationship with their cellphone customers; the broadcaster still is the main source for content and keeps its relationship with its advertisers.”
Mediaset spent €250 million ($321.7 million) rolling out its DVB-H network (I don’t know how much was paid for the spectrum, or whether that is included in the figure), and leases 25% of the network for €75 million for a five-year lease, an offer taken up by Telecom Italia and Vodafone. That’s slightly more than the cost of the network, but assumes that Mediaset has plans to utilize the other half in some way. In contrast, Hutchison decided to build its own network to launch mobile TV, arguing that it had to differentiate itself from its two bigger competitors. Hutch spent €220 million on the network and supplying its own content could cost it another €10 million a year — but it will launch first. Hutch loves that first mover advantage. The need to provide its own content explains the purchase of a TV station at the end of last year.
As a sidenote, Orange found that users of its mobile video service “snack” on the content, watching 2-3 minutes at a time, whereas trials with DVB-H technology showed that users stayed tuned for an average of 16 minutes.

Technorati tags: Mobile TV, DVB-H, Telecom Italia, Vodafone, Silvio Berlusconi