Internet and Mobile TV – How Are They Doing?

James Myring, associate director at Continental Research, casts his eye over the burgeoning IPTV market, breaking down customer satisfaction levels to reveal a generally positive picture for the future of the format…

With the launch of services such as BT Vision the internet offers an alternative platform for watching TV. Industry after industry has been transformed by the internet and there is reason to believe that TV could be next.

The number watching TV programmes live via the internet in the past 12 months has increased steadily from 1.9 million (7% of internet users) in 2006 to 2.9 million (10% of internet users) in 2007.

Satisfaction amongst those viewing TV online is also respectable, with just 12% not satisfied with the service overall. There is some substantial dissatisfaction with the choice of programmes to watch, but this looks sure to improve in the relatively near future with the launch of the BBC iPlayer giving internet users more options regarding the type of programmes to watch online. A greater presence by the BBC online can only help serve to boost the popularity of internet TV.

However, the areas where there are greatest dissatisfaction relate to the size and quality of the picture. In a world where many homes are equipped with wide screen TVs offering almost cinema style viewing in a comfortable environment, people have high expectations regarding the quality of the viewing experience. When assessing the potential of alternative viewing platforms this needs to be taken into account.

Even more than for internet TV, screen size issues are a barrier to the growth of mobile TV. The ability to watch selected TV services via mobile phone has been around for over two years, and has been the focus of significant marketing efforts by the networks. Despite this it had only been used by 1% of mobile phone owners in the past 12 months. Just 3% of those that hadn’t already used it said they were likely to do so in the following 12 months.

It therefore appears that paid-for mobile TV services are unlikely to provide a significant income stream for the networks in the immediate future. There remain substantial barriers to overcome if mobile TV is to be a widespread success. Although mobile phone screens are continuing to grow in size, they are always going to be limited due to the desire to keep most mobile phones as small and as compact a possible. This naturally limits the type of TV content suitable for mobiles. News, sporting clips and music videos are much more likely to appeal than big budget movies or wildlife documentaries, where visual impact is key to the appeal of the programme. One reason given by someone not planning to use mobile TV illustrates this: “A mobile is too small to see things properly on the screen. You can’t really see what’s going on” (25-34-year-old mobile phone owner).

Another significant barrier is that a 3G signal is required to receive the transmissions, therefore the quality and strength of the signal can be inconsistent, meaning that TV reception can cut out in the middle of a program or cannot be received at all. This particularly impacts upon what could be key opportunities for using mobile TV, such as when travelling by coach or train, where varying signal quality as the user travels around, could affect their viewing experience. “The phone network is too patchy in signals around here to work properly” (35-44-year-old mobile phone owner).

Another issue affecting take up is technical problems amongst those that actually do try to use the service. One user that was tempted to sign up to a free trial on his network’s mobile TV service said: “I tried to get it working three times, but each time they [the network] told me I’d now be able to watch the TV services – I couldn’t. And then after I cancelled the service they continued to charge me for three months, even though it had never worked!”

If those that do initially attempt to use the service experience difficulties, they are likely to generate poor word-or-mouth putting off other potential users, further contributing to slow take-up of the service.

If we are to see significant growth in mobile TV usage then these barriers to growth, namely screen size, reception and technical problems need to be overcome. Also the service needs to be targeted at the younger age groups that are most receptive to this service – nearly one in ten (9%) of 16-24s say they are likely to use mobile TV in next year.