More smartphones means more online shopping... once the payment schemes are ready

We love our smartphones and the one thing they're able to provide is a more computer-like internet experience.  We can read news, check email, view video, and go shopping.  Sure, we can shop all day, but can we pay for the items we want?

Well, that's been difficult. For most of us, the default payment method for online purchases has been a credit card.  Sometimes we can make purchases from places where we have our credit card information stored but in other cases we want something from a new vendor. So you're stuck entering name, address, shipping information and credit card numbers time and again... not as easy as when we're typing on a full-sized keyboard.

That's where mobile payments come in.  There are several approaches and a couple are actually being launched in the US.

The biggest and most successful deployment of mobile payments is in Japan, where all the mobile operators are using something called osaifu-keitei (wallet phone). A chip in the handset allows users to wave their phone near receivers on vending machines, in convenience stores and to pay subway fares. It works well, but there are a million reasons that success won't necessarily be replicated outside Japan. (The chip technology is called "Near Field Communication" or NFC).

In the US, both Sprint and AT&T announced their own versions of mobile payments.

AT&T, working with several vendors, is focusing on digital goods you can buy with your phone... downloaded music, games and other content you use on your phone.  The charges would show up on your mobile phone bill.

Sprint's approach, called Mobile Wallet, is a bit more inclusive.  Its downloadable application (from partner Cardinal Commerce) sets up a place to store credit card data that is then accessible through a PIN. When you find an item you want to purchase online from a vendor that participates in Cardinal Commerce or Sprint Mobile Wallet, you can complete the transaction by just entering your PIN.

Both methods have limitations... with AT&T, you're buying digital goods. With Sprint, you can only use it at participating merchants. However, both are good first steps. The market potential is there and, I believe, the cellphone could replace the leather wallet in the near future. We'll keep an eye on mobile payments in this blog as well.

I'm interested in Mobile DTV, but how can I get it?

I'm so glad you asked that.  Because I wasn't even certain how and where to get started with Mobile DTV, myself.  All you have to do is two simple things:

1. Buy a compatible receiver.  It's not hard to find something if you go onto amazon.com and search for "Mobile DTV." There are a variety of devices already available. MyGoTV.com also has handheld Mobile DTV receivers but seems to be sold out. 
2. Move to a city where there local broadcasters have deployed Mobile DTV using the ATSC M/H standard. It's not every city yet.  Here is a pretty good list of cities from RabbitEars.com. Look for the green logo that indicates the service has launched. 

For a receiver, you could choose a complete Mobile DTV player from LG. Or, if you just wanted to add the reception capability to your laptop computer, you could get a USB receiver from Coby.

Of course, you have to be in a place where you can get a signal.  You're can pick from five different Mobile DTV stations if  you're in New York City or Charlotte, NC.  Los Angeles or Philadelphia have three stations each and you'd hit the jackpot in Washington, DC, where there are seven televisions offering 16 channels including Fox News, PBS, MTV and Nickelodeon. In all, 14 of the top 20 markets have operating Mobile DTV stations today.

For me, I'd have to move to some other city.  Not only are there no mobile DTV stations in operation, there aren't even any on the drawing board, according to the RabbitEars.com list.

The Other Mobile Video Network

I erroneously left out an important mobile video delivery network not only in my blog posts but in my thinking as well: Wi-Fi.  A recent report from Rhythm New Media (.pdf), a firm that provides mobile video advertising to smartphones, finds that, overall, 53% of video delivered to phones was over the 3G network, with the remainder via Wi-Fi.  It's significant that nearly half the high-bandwidth streaming content does not come over the wide area public networks but, rather over smaller, faster, and (most likely) more reliable systems.

Rhythm New Media also indicates there is a spike in Wi-Fi usage at about 10pm, so I think it's fairly safe to assume people are using these devices at home rather than at coffee shop hotspots.

In some ways, this is almost identical to households having both a cellular and landline telephone.  There's a great deal of value in the convenience in mobility, but there are also times when the lower cost, more reliable, better quality connection is preferable when mobility isn't required

(Yes, yes, I know many people in the mobile world would argue vehemently with the suggestion that landlines are better quality and more reliable than cellular... I wouldn't disagree with them, either. Let's not consider this from the perspective of the mature cellular networks of 2010 but, perhaps, those of 1995, when mobile voice networks were just getting established and traffic was starting to build.  That's probably a better analogy to the heavy data loads on 3G networks today and, from that perspective, the landline vs. cellular analogy makes more sense)

If there's a single message that can be gleaned from Rhythm New Media's data on Wi-Fi it is that consumers prefer a clean, uninterrupted video stream, which today's 3G networks can't necessarily provide at peak hours.  It also suggests consumers know the value of offloading their data traffic from 3G to an alternative, which could also bode well for in-home femtocells.

Mobile DTV Deployment "Too Good to Be True?"

A recent article in Broadcast and Cable described the deployment of Mobile Digital Television (Mobile DTV) as being surprisingly easy. The article, written by George Winslow, said:

"It's been an almost too good to be true kind of experience," notes Ardell Hill, president of broadcast operations at Media General. "From the day we issued the purchase order to the folks at Harris Corp. to the day we went on the air was inside two months. To have a new technology like this, installed, turned on, tested and on the air in six or seven weeks is a pretty significant accomplishment. 

Combine that with the fact that the cost of deployment is fairly low -- said to be in the neighborhood of $100,000 -- and you have the ingredients for a quick rollout.

There have been some Mobile DTV rollout announcements lately. WGBH in Boston announced its system is operation and Media General announced it had launched MDTV in Columbus, Ohio as well.

Now all we need are enough devices to get a measurable audience.

Finally! Mobile Video Becoming Important

During the controversial runup to deploying third-generation (3G) networks, several infrastructure vendors were touting mobile video as the reason to upgrade from GPRS to UMTS. You have to remember, this was 1999, and the Palm Treo was almost two years away.  I was pretty astounded by the projections that subscribers -- particularly those in Europe -- would be willing to increase their monthly spending by US$12 for the privilege of watching video on their phones.  That was an increase, by the way, of about 50%. Pretty ambitious, huh?

Today, Microsoft rolled out several new Windows 7 models with AT&T, T-Mobile and others.

The HTC HD7 was rolled out by T-Mobile (along with several other Windows 7 handsets).  As with other recent HTC phones, this one is oriented toward video with an extra-large screen and the kickstand that premiered on Sprint's 4G EVO (also a product of HTC)

What we're really seeing here is -- finally -- all the pieces coming together. No, it's not 1999 or even 2005, but by 2010, we're finally seeing phones and networks that are ready for video. But are people paying $12 for mobile video?  No, not in most cases.  But here in the US at least, they are paying for access to a number of mobile data applications, including video. And, ultimately, it's more than $12/month.

Maybe those projections weren't so wild after all. Just premature.

RIP MediaFLO? One Man's Experience

Having been a part of the mobile research and advisory industry for more than 10 years, I was lucky enough to get some cellphones to test when they were announced by the mobile operators.  AT&T was the most generous and I had the chance to use both a LG VU and a Samsung Eternity, both of which were equipped with MediaFLO receivers. These were both great phones (the Eternity is still in loving use) and the mobile TV function was something I needed to try out so I could have a clear understanding of how it worked from the consumer's perspective.

The relatively low frequencies used by the MediaFLO TV signal (UHF 52-54) gave it pretty good range and building penetration, so I could watch good TV even inside the house.

But the real test came when I was taking a train to my old family home in Michigan. Snow on the tracks had delayed the Amtrak Wolverine Express for several hours (Snow? In Michigan? In December? How could Amtrak have anticipated that?!) So I whipped out my LG VU to start watching TV programming.

And I watched.... er... well. Nothing that I really wanted to. I'm bored out of my mind, I have THE best technology to chase my boredom away and there's nothing. Deep inside Chicago's Union Station, the signal was weak. Once we started clickety-clacking through the Chicago suburbs, though, the signal was strong.

The programming, however, was weak. A movie that was halfway over. Spongebob Squarepants. Something about football. I kept flipping the channels, thinking "15 channels and nothing to watch." I finally settled on a news documentary about some woman who had killed her child (not my customary viewing).

Luckily, or not, once we got outside Chicago and neared Gary, Indiana, the signal sputtered and vanished. No more FLOTV for me for the rest of the trip.

I was deeply unsatisfied and, not only that, I was getting the signals for free! Because I was an industry analyst with a test unit, I wasn't even paying the $15/month charge.

I felt let down. And I remembered my visit to the huge, elaborate network operations center QUALCOMM had built in San Diego. They said proudly that they had the most advanced NOC anywhere... even the major networks didn't have operations like this.

15 channels and nothing to watch.

It was pretty clear MediaFLO was about to die a slow death.  There's no doubt that the technology worked, and worked really well. But the programming and the cost doomed US operations of MediaFLO from the start. Good try, great proof-of-technology. Business case? Not so much...

The failure of one business plan does not represent the failure of the industry

The website Paid Content and others are shoveling dirt onto Qualcomm's MediaFLO grave after employees were apparently told the operation would be shutting down by the end of the year.

What's important to understand is that the failure of MediaFLO's business plan in the US does NOT represent a failure of mobile video, particularly Mobile DTV.  I count myself among those who foresaw the demise of MediaFLO years ago because of its awkward business model:

• It had  to be on a cellphone
• It had to cost $15 per month so MediaFLO USA, the mobile operator and content owner could make enough money on it
• Consumers had to be  satisfied with 12 channels or so of content you could find anywhere
• Spotty coverage limited the places you could  view MediaFLO. Downtown was fine, but in the suburbs? Not so much.

MediaFLO's ambitious business plan had so many elements that were working at cross purposes that it's sometime amazing that it worked at all.  Handset vendors, MediaFLO, mobile operators, content owners and, of course, consumers, were expected to do their parts. Some did, most didn't. There weren't many compatible handsets, there was very little marketing support from the operators and as far as content goes.... 14 hours a day of Spongebob Squarepants just didn't do it for me. And apparently, consumers didn't do their part, which was to have been rushing out and snapping up handsets and signing up for a service that would increase their monthly cellular bill  by about 25%. 

However, don't use this setback to paint a dismal picture for the entire industry.  In particular, Mobile DTV seems to be ready to fill the place of MediaFLO, without the complex value chain and, more important without the monthly charge.  If consumers can get mobile television in the way they've been receiving commercial broadcasting for the past 80+ years, it's possible there will be some success in the future.

Mobile DTV a step closer as market test concludes

Mobile Digital Television (Mobile DTV) underwent a trial in Washington D.C. for the past six months and consumers seem to really like it.  In fact, a survey by the Open Mobile Video Coalition found that most consumers didn't want to turn their test devices back in.

In a press release (.pdf), the OMVC also found:

• The most popular mobile program is local news. Mobile DTV is primarily watched during the work week, and local news leads viewing by number of episodes and total unique viewers. 
• Viewers reported increased TV watching outside of the home, including while commuting on public transportation, during lunch breaks in the middle of the day, and while waiting at the doctor’s office or supermarket. 
• They also watched at home when others were watching the family big-screen TV 
• Viewers didn’t want to relinquish their Mobile DTV devices when their portion of the trial had come to a close.

Unfortunately, the test was conducted using cellphones equipped with Mobile DTV receivers, which reinforces that (incorrect) assumption that mobile TV is somehow associated with mobile phones... it's not.  The OMVC should start encouraging further testing with dedicated portable TV devices, external receiver "dongles" for notebook computers and automotive devices wherever possible to get a better view of the potential consumer behavior.

Better yet, let's just get this show on the road and start make the deployment of commercial Mobile DTV a priority.