Mobile TV is Waste of Money Say Strategy Analytics

Strategy Analytics have announced that investing in Mobile TV might not be such a good bet, which I’ve been saying for a while. Still, it’s nice when the pro’s agree.

I tend to look at simple stuff like if people will use it and, as importantly, pay to use it. It’s not going to be cheap and the user experience is going to be pretty poor. This is not what mobile phones have been designed to do. Most successful mobile applications tend to be about two way communication, not broadcast.

So, once users get over the novelty factor, it’ll slowly die. It’s like when I first got my first mobile phone. I stood in a field and phoned my Mum and said “Hey, guess where I am – in the middle of a field??!!” (Note: it was a long time ago when mobiles were the size of bricks and phoning from fields was rather unbelievable).

Anyway, once she had recovered from the shock of talking to someone in a field and I had got over my delight, I never did it again. So it’ll be with mobile TV.

Anyway, the pro’s also say:

ÏBeyond the basic business case and potential cannibalization factors, mobile TV faces four key challenges: The technology roadmap is far from stable; regulation and low spectrum availability may also act to slow the spread of services; beyond the technophile segment there is slow diffusion of media-enabled devices; and uncertain revenue models and value chain reconciliation will deter content industry participation.Ó

But the amazing thing to me is that investors in this sector are forecasting ROI within 2 to 4 years. Sorry, but that’ll just never happen.

The trouble with this type of investment though is that management are faced with very tough choices, which actually favour poor decision making.

Let’s take the scenario that everyone in a sector is rushing to invest in say, pork bellies. As a management team, you can either follow the herd or stand your ground.

If you don’t follow the herd and pork bellies are a good investment, you’ve lost a brilliant opportunity and your shareholders will crucify you.

If pork bellies don’t come good, you’ve kind of won, but not many brownie points accrue from NOT doing something.

If you do follow the herd and pork bellies succeed, you’ve done the right thing. And if they don’t and you loose a packet, the whole industry was wrong, so how can you be blamed?

So, is it really surprising that when an industry has a big idea, even if it’s transparently the wrong thing to do, that everyone piles in?

That’s exactly what’s happening here. Mobile TV won’t pay back. It’s as simple as that.

Disagree? Leave a comment, though that’s very slooow (and being fixed). But drop me an email russell at mobhappy dot com and I’ll post it for you.

Story source: Moco News

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