The services, business model & challenges of broadcast network operator. The German Perspective.

Transcription

1 The services, business model & challenges of broadcast network operator. The German Perspective Mobile TV & Broadcast Transmission International Conference

2 The Technological Challenge In a world turning mobile, today s technologies force television audiences into immobility or to pay a very high price. 2.5G/3G Mobile Satellite DVB-T Mature Technology with excellent performance Cheap Devices Pros Established network platform, ready for interactivity Considered truly mobile by consumers Economic attractiveness to MNOs Large amounts of pay and free to air contents Established satellite platforms applicable Large foot print Comparatively large no. of channels Cons IP Networks are inefficient in delivering mass market broadcast content Little attractiveness to consumers due to high network costs limit acceptance High cost for mobile reception Terrestrial support network needed for urban and indoor coverage High costs of dedicated space segment High bandwidth requirements due to MPEG2 compression High energy consumption of mobile devices due to computing power needed A different type of network is required to free television from its current constr Seite 1

3 Alternative Technical Solutions. Bandwidth and mobile network integration put DVB-H ahead, but business models and spectrum availability create potential for DMB DVB-H Higher Bandwidth per channel Smaller Number of transmitters Interface to Mobile Network IP Integration Device Scarce manufacturer VHF/UHF-spectrum support resources Higher transmitter performance needed DMB VHF and L-Band L-Band spectrum availability Lower transmitter performance First mover advantage in some markets possible Lack of Mobile Network interface, thus no interactivity, (still R&D) Low Bandwidth per channel Relatively higher number of transmitters required Both technologies offer comparable technical performance Management decision making needs to reflect: Requirements from MNO s and broadcasters business models Availability of frequencies

4 The Market and Regulatory Challenge Technological obstacles to mobile TV have been removed, but in many markets business models and -owners are still subject to discussion. Short attention Ad funded periods require Broadcasters specific mobile question revenue content formats potential Content Producers reluctant to innovate Content Producer Broadcast Network Revenue Sharing? Content Packaging/ Transaction Platform Investment in network infrastructure and device subsidies Mobile Network Operator Broadcast Network Operator Content Aggregation is regulatory innovation in broadcasting, free access requirement from public broadcasters Value Proposition requires access protection and strategic bouquet management Seite 3

5 Crucial Player s Roles: MNOs Mobile TV is a viable escape from the limited strategic options available in MNOs home market. Mobile Network Operators Use consumer demand for mobile TV (UK: Willingness to pay $ 200+) to force consumer transition to 3G phones Tap into revenue streams from access (CA required!), interactivity and on demand services Differentiate and lock in consumers via exclusive TV content deals Develop cash generating add on services for TV broadc.

6 Crucial Player s Roles: Broadcasters Mobile TV has the potential to be a major source of nonadvertisement based revenues and also taps into new advertisement markets. Mobile Network Operators Use consumer demand for mobile TV (UK: Willingness to pay $ 200+) to force consumer transition to 3G phones Tap into revenue streams from access (CA required!), interactivity and on demand services Differentiate and lock in consumers via exclusive TV content deals Develop cash generating add on services for TV broadc. Broadcasters/Content Owners Exploit non-advertisement based revenue potentials by participating in revenue sharing, interactive revenues and paid content offerings Conquer off limits media time budgets held by radio, books, newspaper (Commuters) Gain significant audience reach for marketers through a potentially fast growing base of subscribers to mobile TV

7 Crucial Player s Roles: Broadcast Network Operators Independence from MNOs and broadcasters, content owner will be key for both the operator itself and regulatory approval of mobile TV. Mobile Network Operators Broadcasters/Content Owners Use consumer demand for mobile TV (UK: Willingness to pay $ 200+) to force consumer transition to 3G phones Tap into revenue streams from access (CA required!), interactivity and on demand services Broadcast Network Operator Exploit non-advertisement based revenue potentials by participating in revenue sharing, interactive revenues and paid content offerings Conquer off limits media time budgets held by radio, book newspaper (Commuters) Gain significant audience reach for Differentiate and lock in consumers via marketers through a potentially fast exclusive growing base of subscribers Foster collaboration TV content deals among competing MNOs, broadcasters to Develop cash generating mobile TV Maintain high degree of independence add on services from all MNOs and broadcasters and achieve 360 acceptance for TV broadc. Integrate into mobile TV value chain by means of services enhancing MNOs and broadcasters potential to built new and compelling services Be the lead innovator in technology and service infrastructure terms

8 Tackling the Going to Market Challenge. Introducing DVB-H based mobile TV to the market goes beyond solving technical issues and requires a comprehensive strategy. Market Making Activity Timeline Germany MNO Consortium Set Up and Regulatory Acceptance Regulatory Framework Definition Post-RRC distribution process Frequency Tender Network Implementation Platform Operator Tender Northern German y FIFA World Cup Show Case in Berlin, Hambur g, Hanover, Munich IFA 2006 Show Case Berlin Joint Lobbying to Media and Telecoms Regulators by MNOs and BNO Negotiation of future positions in Mobile TV value chain (platform, content, sales) Jan Feb Mar Apr MayJun Jul AugSep Oct Nov Dec Jan Feb Mar Apr MayJun Jul Aug Sep Oct Nov Dec Target MNO DVB-H Service Commerc ial Service Introducti on Seite 7

9 From Vision to Technical Reality in three Years. Services- Platform DVB-T / UMTS Laptop/PCMCIA MPEG4 Data Carousel R&D Projects Demo Content Start Infrastructur e - plan - build Operatio n ETSI IFA Testing of services In-House- Provisioni ng DVB-H-Validation DMB In Retail Stores Operation of Infrastructure FIFA World Cup 2006 Quality of Service DVB-H In Retail Stores Services Platform DMB DVB-H / UMTS, DVB-H-Device, MPEG4 (H.264), Data Carousel, Commercial operation, Content Provider, TV Channels, Operations Company Seite 8

10 Flagship Trials. T-Systems offered mobile TV coverage of 2006 FIFA World Cup action in major host cities in co-operation with all German MNOs. Host Venues 2006 FIFA World Cup Germany Cologne Hannover Gelsenkirchen Dortmund DMB Frankfurt Hamburg DVB-H DVB-H Berlin DVB-H DMB Leipzig Service available in major host venues where the championship will be taking place DVB-H / DMB and national HD Radio (DAB) network services provided by T-Systems Mobile network services provided by T-Mobile, Vodafone, O2 and E-Plus Kaiserlautern Nuremburg Stuttgart DMB Munich DVB-H DMB Official Partner Seite 9

11 Mobile TV Platform Key Success Factors. Successful integration of critical platform components was supported by strict standard compliance and best of breed approach. Ingest Sources Contribution Interfaces Overview T-Systems DVB-H Platform Encoder Interaction Encryption Play Out Management Inhouse Solution by Systems Integration M&B /Customization by M&B Inhouse Solution (Third Party Subsystem) IPE ESG Management FLUTE Third Party DVB Broadcast Network MNO Interfaces Key differentiators M&B Best in breed approach to component selection from third parties Scalable and versatile in regard to the integration of alternative components Customization of third party components to suit the requirements of a DVB-H play out In-house solution development as a fall back position used very selectively Successful integration of heterogeneous components into a platform solution In the absence of an out of the box solution the integrative approach proved to be a key success factor in creating a robust and versatile platform infrastructure Fully DVB-H standard compliant Seite 10

12 Mobile TV Device Interoperability. In the absence of a large number of mature and well established DVB-H serivices, creating interoperability was a key goal for the trials. Lessons learned Large number of device manufacturers available in trial Win-win situation for BNO, MNO, device manufacturers Remarkable progress regarding market maturity of devices Synchronized development paths for platform and devices, e.g for encryption Seite 11

13 Overview Mobile Devices.

14 Key Cost Driver: Efficient Network Structure. Mobile TV requires large investments in network infrastructure but innovative planning approaches cut costs considerably. Too expensive for attractive business case Signal quality too bad for good indoor reception Integration of quality of service and financial goals is possible! Seite 13

15 Case Study: T-Systems Lean Coverage DVB-H Qatar. Commercial Launch. 5 High Power Sites 8 Medium Power Sites FOR ILLUSTRATION PURPOSES ONLY Good Indoor 2 Good Indoor 1 Light Indoor 2 Light Indoor 1 95% Indoor Reception Probability: better than 95% better than 90% better than 70% Portable Reception

16 Balancing Digital Terrestrial Broadcast Services. DVB-T and DVB-H share the same frequencies and are hence competitors for a resource that is typically scarce. Goal: Developing a mid-term Perspective for a nationwide DVB-H Layer while maintaining DVB-T perspective Avoiding conflict with GSM network Overview Frequency Potential for DVB-H in Germa Result: A DVB-H layer can become reality over next three years, when Agreements on state level will be reached Analog to digital transition dividend will be earmarked DVB-H A harmonization between DVB-T and DVB-H roll is achieved Channels below 53 are used Source: Ad hoc committee DVB-H Layer BNetzA-Pool-RRC06 Seite 15

17 International Adoption of the T-Systems Approach. The strategy used to develop the T-Systems DVB-H platform proved successful and quickly gained acceptance outside of Germany too. Qatar mobile network operator Qtel ran an international tender for planning and setup of a state of the art DVB-H infrastructure Rayyan Exchange Tx Mod Sports City Tower Tx Mod Content Provider 1 Content Provider n Tx Mod Gharrafah Tx Mod TEC ATM CSB Tx Mod Abu Hamour Playoutcenter (POC) Tx Mod Tx Mod APC Exchange Tx Mod Tx Mod REC Qatar Telecom Headoffice T-Systems and vendor Rohde&Schwarz were awarded with the assignment Customer decision was based on their acknowledgement of T-Systems - network planning experience - open standards based DVB-H platform with unique features and best of breed components approach selected over proprietary solutions offered by competition - proven ability to provide for interoperability of its platform with the leading handset manufacturers devices Contract to operation in less than six month

18 Lessons Learned Our experience in plan, built and run of terrestrial broadcast networks was premier foundation for being able to provide mature carrier grade infrastructure right from the beginning Direct involvement in DVB-H standardization process secured valuable influence / first hand insight Getting out of the ivory tower of the lab at an early stage is mandatory to find out of the box innovative approaches to the Mobile TV challenges Early involvement in several long term trials (e.g. BMCO, T-Systems Berlin Trial) secured first mover position with mobile network operators Digital DVB-H Platform development at an early stage of the process supported early market trials and test bed for device manufacturers Strict DVB-H standard compliance and best in breed approach fostered neutral position in the Mobile TV value chain very much appreciated by third parties

19 Head of Strategy & Business Development T-Systems International GmbH Media&Broadcast Phone Seite 18