|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)||
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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.
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.
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.
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
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).
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
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.
He sees four potential future revenue streams
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.
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Key terms referenced: Cisco, Dyle. Mobile TV, mobile operators, telcos, US, Europe, Asia, MediaFlo, VNI.