With the advent of new wireless technologies (such as WCDMA or HSDPA) and new mobile TV technologies(such as MediaFLO, DVB-H, and DMB), consumers can watch videos on their handsets on the go. Recently, two major American wireless operators, AT&T and Verizon, began to provide mobile TV commercial services in the USA. Before the start of the service there had been high promising expectation of a successful business of mobile TV.
However, there are only a few subscribers of the services, although it has been for a while since the start of the services. I would like to argue that the most important thing to have a successful mobile TV service is an appropriate pricing scheme. Mainly there could be two different pricing schemes that is, one is a pricing scheme based on monthly flat subscription fee, and the other one is a free of charge model. There have been several survey papers that show what consumers prefer between the two different models. As you expected, most of consumers' prefer the free model. Actually, several operators in Europe who relied on the monthly subscription model have failed to attract subscribers.
From the operators' point of view, they should consider which model is more profitable to the company in the long run. In case of free price model, it can be supported advertising. At the moment this business model seems more profitable.
Point is simple as below:
- Consumers want free mobile TV services
- Advertising business model can provide free services
- Advertising business model needs as many subscribers as possible
It is time for operators to think which business model is more profitable in the long run.