Ex-ante simulation of mobile TV market based on consumers' preference data

Abstract

Subscribers to mobile TV are able to watch programming via a mobile telecommunications network. While expectations for mobile TV are promising, it is at present a fledgling industry, and deployments of mobile TV networks have been driven largely by system implementation concerns rather than consumer demand and market considerations. In South Korea, mobile TV offerings are based on two competing standards: satellite digital multimedia broadcasting (S-DMB) and terrestrial digital multimedia broadcasting (T-DMB). Beginning with stated preference data drawn from a conjoint survey administered before the launch of commercial mobile TV services in South Korea, the authors use Bayesian estimation to investigate the effect of consumer preferences on the mobile TV market. Results indicate that consumers view subscription cost and media quality as the two most important attributes of mobile TV and that T-DMB-based service should presently occupy roughly 75% of the market. Moreover, the authors model the effects of varying the core attributes of the services on market share as well as the market share elasticity of each type of service. The authors test their modeled results against actual subscription data, and the model fairs well, leading to the conclusion that mobile TV broadcasters and policymakers alike will find use for the study's findings and the model itself.