Changing Channels

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It was a little after noon in oxford, England, last Thursday when Gina Policelli got the news by phone. No, no one called her up; she tuned in her mobile phone to bbc News 24 and caught the latest reports of the Liberal Democrat party conference, then flipped over to Sky News, all while standing on the Oxford University campus. "This is really impressive," gushed Policelli, 25, who works at the National Library for Health at the university. Welcome to the world of mobile television, where broadcasters, mobile operators and handset makers are trying to bring traditional TV to the planet's mobile-phone users.

Policelli was taking part in a trial launched by British mobile operator O2 and broadcaster Arqiva to deliver 16 channels — including bbc One, bbc Two, bbc News 24 and Sky News — to phones supplied by Finnish handset giant Nokia. For the last five years, mobile companies have been dressing up phones with colorful screens, cameras, Internet access and music players, but Policelli is part of an experiment to take the device another step further by transmitting images over broadcast airwaves rather than mobile-phone networks.

The TV industry has already recognized the growing importance of mobile content; earlier this month, the U.S. Academy of Television Arts & Sciences gave an Emmy for technical achievement to telecom Sprint and tech company MobiTV for funneling shows over cellular networks. With 2 billion mobile phones in the world and TV viewing a ubiquitous part of modern life, the commercial potential of marrying the two is enormous. TV on the phone could even help win back the eyeballs of a younger generation of gadget-oriented entertainment buffs who are spending more time with the Web, mobiles and MP3 players than they are in front of a living-room set.

The O2 trial is one of dozens around the world, from Helsinki to Pittsburgh to Seoul, to test the feasibility of broadcasting TV programs to mobile phones. Lots of companies would like to see the trials succeed. Handset firms like Nokia stand to sell more — and more expensive — gadgets, after seeing sales of more ordinary phones slow recently; broadcasters could enjoy a spike in viewers and advertising revenue; and mobile operators, at least initially, could boost their turnovers, too. London research firm Informa Telecoms & Media estimates that by 2010 the market for mobile entertainment — which includes TV as well as games and music — will reach $42 billion. Dermot Nolan, an analyst who has written a report on mobile TV for London consultancy Screen Digest, notes that in Britain alone there are 55 million mobile users. "Even if you get 10-15% penetration, that's big bucks," he says. And he predicts that by 2012 some 256 million mobile-TV handsets will be shipped, up from essentially zero this year.

Traditional broadcasters seem eager to rev up this new way of reaching viewers, in part because they can do it over the normal broadcast airwaves they already control rather than over mobile networks. The O2 trial, for example, taps into TV towers owned by Arqiva that emit a signal picked up by the Nokia handset. But mobile operators are pushing their networks, too; earlier this year, Fox TV launched a special, trimmed-down version of the hit drama 24 over Vodafone's cellular grid. U.S. sports giant espn and Extreme Group, which produces "extreme-sports" shows, are even starting their own mobile-phone services, in part to distribute video. "This gives us a chance to drive the content," says Vladimir Edelman, director of wireless for espn Mobile. espn claims an audience of 97 million sports nuts; hooking at least some of them on a mobile service could open up fresh subscription and advertising revenues.