The Open Mobile Video Coalition (OMVC) – an alliance of more than 800 U.S. commercial and public broadcasters committed to the development of mobile digital TV – has endorsed the results of a study conducted by the National Association of Broadcasters (NAB), which identified potential advertising revenues that would be generated by mobile digital TV services.
The NAB study assumed in its base case that a single mobile digital TV standard will emerge by February 2009, but the association also examined scenarios in which the standardization process would be delayed beyond 2009, and in which a standards war among multiple proponents would occur.
In the base case, advertising on mobile digital TV would generate $2 billion in revenues, of which $1.1 billion would be accrued by broadcasters, providing the industry with an estimated $9.1 billion in incremental market value.
But the study also concluded that each month of delay in determining a single standard would cost broadcasters approximately $50 million in revenues and more than $200 million in valuation. These figures include only cash flows from ad-supported services and do not quantify the value of subscription-based services.
Whether mobile television develops as an ad-supported business, a subscription business, or a combination of both, the OMVC said it agrees strongly with the main conclusions of the NAB study, regarding the potential value offered by mobile digital TV, as well as the costs to the industry from a delay in establishing a standard.
The OMVC also said that a delay in the mobile digital TV standardization process may harm the potential benefit to broadcasters by far more than the $200 million per month estimated by the NAB.
“The NAB study validates the belief among OMVC members that mobile digital television represents an enormous opportunity for broadcasters,” OMVC Chairman Brandon Burgess said. “We believe that the $9.1 billion valuation of advertising-supported services represents only one component of the total potential, and we will work assiduously with other broadcasters, device makers, content companies and service operators to ensure the full potential of mobile digital television is fulfilled.”
The OMVC will be conducting technical trials and consumer trials this year to prepare for a launch of services in February 2009.
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