Mobile TV: It’s Got Everything But a CRM Strategy

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In August 2006, Virgin announced the launch of its broadcast mobile TV offering. Slated for next October, it would use British Telecom’s Movio technology, based on the nationwide Digital Audio Broadcast (DAB) network, to deliver mobile digital TV and radio services. Reportedly, 85 percent of the U.K. population would be able to sign up for the service.

Chances are most of them won’t.

Today, marketers are lamenting over the demise of mass television and buzzing over the rise of mobile TV. Unlike the TV set, mobile devices are both ubiquitous and closest to our heart—a vital means to achieve reach and frequency in mass markets. Yet, I have seen from experience that, in the absence of an appropriate CRM strategy, success will prove elusive.

Yogi wisdom
Consider Virgin. According to the company, users will be given an HTC Lobster 700 device when they sign up on a contract worth £25 or more. Prepay users will have to shell out £199 for the phone and three months of free service before a £5-per-month charge is assessed.

But here’s the problem: The offering does not include such features as news, which are highly popular among mobile TV users. The phone is expensive.

In the late 1990s, Western European operators and vendors were hyping up a new mobile technology, WAP (wireless application protocol), that was expected to mobilize the Internet. It flopped. In the mobile business, it is the classic example of how a new technology can’t succeed in the market if attractive services are absent.

It is customer relationship strategy that makes or breaks the new media.

With mobile TV, to paraphrase the Yankee baseball legend Yogi Berra, it’s déjà vu all over again.

A report from analyst firm Juniper Research predicts that broadcast mobile TV will reach $11.7 billion in worldwide revenue by 2011. Japan is predicted to lead the market with $2.9 billion in revenue, followed closely by the United States, with $1.8 billion. The United Kingdom is also predicted to be a key market, at $989 million.

However, there is still skepticism in the degree of success for broadcast mobile TV. The success of the new media, note industry observers, will depend on many factors including the type of content, content rights, security, spectrum availability, business models, regulation and quality of indoor coverage.

The most critical driver of success, however, is often ignored. It is customer relationship strategy that makes or breaks the new media.

No idols
The sprint to mobile TV has been on for several years now. In October 2003, Nokia announced its first media category device. At the same time, the rise of mobile on-demand video has heralded the coming of mobile TV. Take, for instance, Verizon Wireless’s “Get It” offerings in early 2005.

Until recently, SMS was the only way to enhance broadcasting with interactive mobile communications.

In 2003, American Idol’s wireless TV tie-in launched with SMS voting, which is credited for rocketing text messaging into American pop culture. At the same time, Nickelodeon adopted texting for the Kid’s Choice Awards, the tween clone of Hollywood’s Oscars.

In China—the Middle Kingdom of SMS messaging—the Supergirl show was the hottest American Idol-style contest on Chinese television in 2005, when the interplay of SMS and broadcasting became a national pastime.

Mobile TV subscribers in China will grow to 94 million by 2009, forecasts In-Stat, while the Chinese government is pushing for widespread mobile TV availability for the 2008 Olympics.

Snack TV
Mobile TV is a channel with a difference. Unlike any other existing media, it relies on great reach (3 billion mobile users by 2008) and even greater intimacy (direct access to the end-user).

According to pilots, content is king on mobile TV. Popular favorites comprise familiar program offerings, particularly news and sports. In the Finnish pilot tests, mobile TV users spent 20 minutes a day watching mobile TV and heavy users, 30 to 40 minutes per session.

Like any new and complex media, mobile TV requires a simple, convenient and affordable marketing mix. Success is predicated on mobile content that is suitable for short and occasional viewing. In China, observers call the new medium “snack TV.”

Traditional TV is for primetime; mobile TV is for users on the move. It complements traditional viewing and can boost primetime audiences.

Success
A few years ago, mobile TV services were not possible. Today, the new infrastructure, high-performance devices and sophisticated services are emerging.

But new technology alone does not create a new media. SMS was created in the early 1990s; the success of SMS in broadcasting followed only a decade later. Some emerging markets promise but never deliver.

With mobile TV, successful takeoff requires CRM strategy. The transition from a promising niche to a thriving mass market requires an effective marketing mix, particularly attractive services and affordable pricing, which ensures a rapidly-growing customer base. Differentiated segments optimize offerings, while new, interactive mobile multimedia services boost loyalty.

Mass TV makes possible reach. Mobile TV enables intimacy. Through the stages of critical mass, differentiation and interactivity, CRM strategy can achieve customized offerings that take advantage of the full potential of mobile TV.

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