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Mobile Payments Latin America Summit 2014

02/12/2014 - 03/12/2014, Miami

Enhance the adoption of mobile payments by creating value, leveraging appropriate technology, and driving scale and investment.

Mobile disruption of broadcast TV: Picking the right fight, part I

In the first of a two-part series, Steve Friess reports on the many ways mobile threatens to disrupt broadcast television and how broadcasters are beginning to adapt and fight back.

When people, in decades to come, think back on the 2014 Oscars telecast, they may remember the movies and performances that won statuettes or the part when John Travolta mangled a Broadway singer’s name.

But more than anything else, the 86th Academy Awards will be remembered as a historic moment when host Ellen DeGeneres gathered a bevy of some of the world’s most famous people together for a selfie and then successfully exhorted viewers to turn it into the most retweeted picture ever.

Everything about that moment reflected a new reality in which mobile has forced itself upon and then begun conquering broadcast television.

The most obvious example of that, of course, was that conspicuous white Samsung Galaxy Note that Bradley Cooper held out to snap the photo of himself, DeGeneres, Meryl Streep, Julia Roberts, Brad Pitt, Kevin Spacey and several others.

But beyond that, the gimmick only worked because DeGeneres and the show’s producers knew that millions of TV viewers would be watching live and that they would have at least one other device – collectively known as the second screen – at the ready.

The day after, Twitter announced that 37 million Americans interacted in some way with Oscar-related tweets, an impressive number because, according to the Nielsen ratings service, 43.7 million watched the show. By mid-March, the DeGeneres selfie had close to 3.4 million retweets.

“The sheer velocity and reach of Ellen’s celebrity selfie pic demonstrates that an on-air mention can move millions of people at a time to pay attention to that second screen,” writes Steve Smith in Mobile Marketing Daily.

Mobile disruption

The response to the DeGeneres selfie is just one of many examples of how mobile technology is changing TV, inside and out.

From its importance as a complement and inducement for traditional viewing to its ability to deliver streaming video, mobile has never had a more prominent role and the world’s most popular and trusted visual medium has never been so threatened because of it.

“Predicting the future is virtually impossible, and that’s what’s so exciting,” says Charles Warner, media management professor at The New School for Public Engagement in New York and the “Media Curmudgeon” columnist for Forbes.com. “We don’t know who’s going to jump in and do what. Who would have predicted that Google would lay fiber optics in Kansas City? Nobody. Google’s in the search business. The idea that they might get into giving broadband to a city, nobody would have predicted.”

Rick Herman, chief strategy officer at MobiTV, a British company that provides software to enable cable and telecom systems to keep tabs on viewers’ usage across platforms, agrees.

“The media landscape has changed more in a short amount of time than ever before, and the big catalyst has been the explosive growth in mobile and the introduction of the tablet, which has triggered a revolution in the TV space,” he says. “Where TV was once locked in the living room, it’s now truly versatile – as it should be in a converged world – offering a personal, relevant and engaging user experience in and outside the living room, across many screens.”

Taking on Aereo

It is clear that broadcasters are rattled by changes in the industry and their inability to decipher what these changes might portend.

Last year, at the National Association of Broadcasters convention in Las Vegas, News Corp. chief operating officer Chase Carey proclaimed that if the U.S. Supreme Court upholds the legality of a nascent mobile TV service called Aereo, his company may stop providing Fox over the air.

Three weeks later, CBS CEO Leslie Moonves made the same threat in a talk at the Milken Institute Global Conference in Beverly Hills, Calif., saying that if CBS wanted to, it could move America’s most popular broadcast network to cable “in a few days.” 

In early March 2014, Moonves reiterated that plan at an investor conference in New York. “If Aereo should work, if they should win, which we don’t think will happen, we can go [over-the-top] with CBS,” he said. “If people want to steal our signal, if the government wants to give them permission to steal our signal, then we will come up with some other way to get them our content and still get paid for it.”

Aereo is an $8-per-month service in 10 major cities so far, and it provides HD-quality local broadcast TV streaming and time-shifting via a mobile phone app. Founded by former Fox CEO Barry Diller, the company pulls local broadcast signals from the air via antennae, stores the live transmissions in the Cloud and distributes them on demand to subscribers, arguing that it doesn’t have to pay retransmission fees.

In a flurry of litigation in recent years, Aereo won several cases in federal court but, in late February, lost one when a Utah court issued an injunction citing violation of the Copyright Act. That has set up the coming Supreme Court battle, with arguments before the justices scheduled for April 22.

Embracing Dyle TV

In addition to trying to shut down Aereo, a dozen major broadcast groups or companies including Fox, NBC, Pearl Mobile DTV and ION, have gone in together on Dyle TV.

Dyle is a $100 device that enables mobile devices in its vicinity to stream local broadcast television without tapping the user’s Internet or mobile data plans. RCA, in fact, recently brought to market an 8-inch, $150 “Mobile TV Tablet” that is Dyle-enabled. More than 150 TV stations in more than 40 markets across the United States are now carried live via Dyle.

“We want to be on as many on-the-go devices as the kids and the younger folks are watching on,” says Dennis Wharton, spokesman for the National Association of Broadcasters, referring to Dyle, as well as broadcast networks’ smartphone apps and other innovations. “That means in the backseats of cars, on iPads, on smartphones. All the mobile devices. This can’t be your father’s television business. We have to be part of the mobile society. We want you to be able to walk around the house or into a football stadium watching local broadcast channels 24/7 if you want to.”

LTE Broadcast to displace both Aereo and Dyle?

Yet Marc Price, CTO for the Americas at Openet, an Ireland-based company whose software helps cable operators keep tabs on and send customized advertising to mobile-device viewers, says broadcasters are waging the wrong fights as both Aereo and Dyle will be replaced fairly soon by high-speed, high-definition, wireless digital delivery to any device orchestrated by cable operators and wireless carriers.

In particular, he cites the coming adaptation of LTE Broadcast, otherwise known as Evolved Multimedia Broadcast Multicast Service, or eMBMS, as a promising concept.

In LTE Broadcast, cable operators – who are increasingly becoming the largest Internet service providers, too – will cache the most popular, live and recorded shows and then broadcast them to devices, be they portable or not. Doing so will allow users to receive the programming faster and create far less data traffic that so often slows down wireless Internet systems.

Telecom giants Telstra in Australia, Verizon in the United States and KT in South Korea have all tested it out in recent months, with Telstra saying that a cricket broadcast that usually required 2GB of data per user to stream took up just 6GB for the entire broadcast to all viewers.

That, Telstra executive Mike Wright said in a press statement, “clearly demonstrates an efficient use of spectrum."

“Aereo is an interesting experiment and so is Dyle, but I think local broadcasters are going to have a hard time being relevant in this new world anyway because the content will be most easily delivered in an àla carte fashion,” Price says. “There will be certain content that needs to be delivered live – sports, awards shows, news events – but when LTE Broadcast is predominantly deployed for live events and the majority of long-tail content is available on demand, that doesn’t set up a world where the local broadcast channels are relevant anymore. In a few years, we’re not going to be talking about” Aereo or Dyle.

(For more on LTE Broadcast, see LTE Broadcast and the future of mobile television.)

Cable companies strengthen in wireless

Cable companies appear to have received the message loud and clear.

By becoming major players in wireless delivery – witness the pending acquisition of Time Warner Cable by Comcast and the expansion of Comcast’s already huge control over the U.S. broadband wireless market – they are ensuring their viability in a post-broadcast world, Warner says.

“The broadcasters are not content creators, they’re packagers,” he says. “But I can curate my own viewing now. I don’t need CBS to curate it for me. As the consumer is able to self-package what they watch, the power of the broadcast networks will be diminished. The networks’ competition on mobile is not just the cable but YouTube. As the stuff that’s available on FunnyOrDie or some other YouTube channels gets more popular, that’s going to hurt the networks.”

The demand is ever increasing, as seen during the 2014 Winter Olympics in Sochi, Russia.

The time-zone differences meant that millions at work took in events live via mobile devices – almost entirely via digital, not broadcast, transmission, according to Herman.

“Our customers are not trying to deliver over legacy fiber systems, they’re trying to leverage their national broadband systems,”Herman says, adding his clients include T-Mobile, Sprint, AT&T and BT. “When you have compelling live content taking place in odd time zones and you have a die-hard fan, that user is going to be watching it on a non-traditional screen. I loved the ski racing. I didn’t want to wait for the 8 p.m. replay, so I was watching it on my phone, PC and tablet while it was happening live.”

(For more on the role of mobile in sports broadcasting, see Using mobile to convert young sports fans, part I and Using mobile to convert young sports fans, part II.)

Steve Friess is a regular contributor to Open Mobile Media. 

For all the latest mobile trends, check out Mobile Payments and VAS Europe on May 6-7 in London, The Open Mobile Summit on May 19-20 in London, Telematics Detroit 2014 on June 4-5 in Novi, Michigan, Wallet Wars USA on June 19-20 in New York, Mobile Enterprise Summit USA 2014 on Sept. 23-24 in San Francisco, Connected Healthcare 2014 in October in San Diego and The Open Mobile Summit and Appcelerate in November in San Francisco.  

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Mobile Payments Latin America Summit 2014

02/12/2014 - 03/12/2014, Miami

Enhance the adoption of mobile payments by creating value, leveraging appropriate technology, and driving scale and investment.