Reference no: EM131293151

Moving images
From tomorrow, Japanese commuters will be able to put away their newspapers and music players and tune in to the world's first commercial multimedia broadcasting service for customers on the move. The service, called Mobaho!, will broadcast seven video channels and 30 music and audio channels from satellite, allowing consumers to watch live video broadcasts on a train, bus or boat. It will charge customers a mix of subscription bundles and à la carte payments.

This is no ordinary start-up. Mobaho! has been launched by the Mobile Broadcasting Corporation (MBCO), which is backed by 85 investors, including some of the giants of the country's consumer electronics and telecommunications sectors - Sharp, Toshiba, Tokyo FM Broadcasting and Nippon Television Network. The Mobaho! service covers all of Japan bar a few outlying islands - although as the signal will not be accessible under tunnels, commuters on Japan's extensive underground system will be unable to use the service. Hardware for the service is already in the market. Toshiba offers a portable AV device with built-in satellite antenna and LCD screen to receive the channels and next month Sharp launches its version.

The handsets retail for just under £400. Sharp's device can also be used as an MP3 player, electronic photo album and electronic book reader. Other countries will be watching the Japanese launch closely as they trial their own television-on-the-move services. In the UK, Nokia, O2, NTL and Sony are testing a service from next spring. But the Japanese platform is the first to go live on such a scale. Its target is to sign up 1.5m customers in three years. One unknown is the level of demand for such offerings and how well Mobaho!'s choice of payment models and content (which does not include any advertising at launch) goes down in Japan.

The country already has a sophisticated mobile services market thanks to the launch of 3G, the success of NTT DoCoMo's i-mode interactive service and some 77m mobile phone users. Mobaho! will offer a bundle of six video channels covering news, sport, entertainment, business, children and music, while a seventh channel, a premium offering, will cover live sports events. The music and audio channels include news, special genre channels (such as jazz and 1980s music), content from US stations, English-language news and English conversation lessons. About 350,000 music tracks will be on the air each month on a 24-hour basis.

There will also be 60 data services offering news, business and cultural information, beamed direct to the portable devices. If the service signs up 1m customers, it believes that it would be realistic to tailor advertising to its customers. After an initial registration fee of Y2500 (£13), consumers can opt for a package that includes audio, video and data services (excluding the premium channel) at Y2080 per month, or opt for audio-only services for Y1380 per month. Opting for video and data services alone costs the same amount. The premium sports channel is an extra Y1260 per month. Owners of the new portable AV devices will also be able to use them as home video players.

A number of TV sets in Japan can record programmes on to memory cards, and viewers will be able to slip a memory card into their portable AV device and watch the recorded programme. Worldwide sales of portable video products such as personal DVD players have generally been disappointing. ‘I have to admit that I was initially sceptical about whether anyone would want to watch video when they're out of the home, but I've changed my mind,' says Ashley Norris, publisher of Tech-Digest, a consumer electronics information website. ‘Video downloading on a mobile phone is a growing activity and you can imagine times when you'd like to watch, say, a live football match when you're on a train.' But even if there turns out to be a viable market for video on the move, the broadcasters will not able to colonise it. Competition from mobile phone companies looking to increase their revenues and their customer base is likely to be strong. Japanese consumers can already buy mobile phones with built-in analogue TV tuners.

Further, the Japanese digital terrestrial television service has allocated part of the spectrum for mobile television services to mobile phones and other portable devices. Public broadcaster NHK will next year begin mobile TV broadcasts, and Sanyo and NTT DoCoMo have both shown prototype mobile phone handsets with built-in digital tuners at trade shows in Japan. NTT DoCoMo's handset includes a docking station with a 20GB hard drive that can store up to 80 hours of television programmes. Mobaho! will not be available for mobile phones, because receiving video services from satellite requires a lot of battery power and today's mobiles would soon run out of juice.

However, a new generation of mobile phones that can receive video broadcasts via satellite are under development and are expected to hit the market within the next two years. If watching video on the move proves as popular as listening to music, expect broadcasters, advertisers and sponsors to pile into this sector. Source: George Cole (2004) Financial Times, 19 October. Reprinted with permission.

Question

1. Indicate the kind of marketing research that you think might be undertaken before deciding to launch this product into a particular international market.