Findings BRT 9 -12
BRT9: "Research and Technology in Europe – Austria's Position in the European Environment"; Vienna, Austria; 24 Sep 2003
Multimedia products are mainly produced by small and medium enterprises (SMEs) in Austria. But it becomes increasingly difficult for such organisations to gain advantages in FP6's IST research & development projects for a successful market implementation. The structure of the IST programme has been identified by the panellists as increasingly incompatible with the needs of small enterprises. It privileges the big research networks and the big players. Instruments like the ‘Networks of Excellence’ are not targeting multimedia companies and producers and very few of the programme lines tendered are suitable for Small and Medium Enterprises.
SMEs are confronted with various difficulties to fulfil the requirements of participation as well to gain satisfactory synergies and advantages in programmes as defined in FP 6. Since FP6 is considered as not very ‘SME friendly’ by the experts, FP7 should therefore specially include and consider small but real innovative companies by creating a parallel (special) programme with focus on the integration of SMEs, which is defining clear conditions for the participation of big players in cooperation with small companies and enabling that practical working and orientated companies (SMEs) get higher significance and importance within projects.
Market relevance of EC funded research & development projects should be taken in even closer consideration and business orientation should be seen as essential for the development and competitiveness of Europe’s industries and companies. Despite the causality of success is not always obvious at first sight in research and development projects there should be made strong efforts to create a kind of balance sheet of project results.
Panellist Mr. Tscheligi stated that he has already participated in 11 EC projects so far with varying levels and outputs of success. In his point of view the benefit and value of each participation is the cooperation within the consortium on the European level (beyond the national market) and to gain insight in the latest developments in the field of research as well the market side.
In panellist Mr. Holle’s opinion theoretical and practical needs do not meet and the majority of EC funded projects are too theoretical orientated with a lack of practical impact. Real innovation is often realised by small enterprises in cooperation with strong players. His conclusion: EC projects should include and consider a higher level of practical and real life aspects and the project character should be more business orientated. He recommends that SMEs run such projects complementary (some but not too many) as an addition to their normal portfolio. A clever balancing of the normal projects with EC funded projects seem to be desirable.
Panellist Dr. Ross King stated that the time to the market of innovative developments should be shortened by effective co-operations (in EC project terms by effective consortia) ranging from basic research to ‘rapid prototyping’ by companies and the industry. He further emphasises that EC projects gain synergies beyond pure financial interests.
Conclusion: In most of the cases it is probably not very wise to start a EC project predominantly out of financial aspects. Rather one should be aware of the difficulties that might arise. It is well advisable to carefully search for the additional aspects and synergies the participation in a project may create.
Lessons Learned |
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With a size of EUR 3,6 Billion the 4 years IST budget (out of 17.5 Billion Euros for all European research activities) it is a key measure for the competitiveness of Europe in the global business arena.
SMEs should run EC funded projects complementary (some but not too many) as an addition to their normal business portfolio. A clever balancing of the normal projects with EC funded projects seem to be desirable.
FP6 is not addressing the needs of SMEs and appears to the experts as inadequate. This has partly to do with the requirements for building integrated networks but also with the self-dynamic created, when large companies search for collaborators: They will only choose companies they know and have cooperated with over some time. This makes it twice complicated for young and small companies to get into EC funded contracts.
Over 93% of the European companies have less than 10 employees according to EUROSTAT and are therefore micro-companies. This large number of micro-companies account for about 1/3 of the European work places. In many of the European countries is a tendency for a new entrepreneurship, resulting in an increased growth rate in that sector.
The hope that FP7 will be different by addressing the needs of micro-companies resp. avoiding the topics mentioned above.
When looking at the success rate of the Austrian participation, it turned out that the average success rate of proposed projects is 25,6%, the Austrian Industry is above this average with rate of 29,3%. The programmes with the highest level of Austrian companies (industry) in successful projects are:
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"Growth" |
61% |
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"Energy" |
56% |
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"IST" |
39% |
If looking on the Austrian Results in GROWTH in detail it turns out that the successful states were Vienna, Styria and Upper Austria. Burgenland and Salzburg are the least successful states. |
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BRT 9 |
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Date: |
24 Sep 2003 |
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Topic: |
Research and Technology in Europe – Austria's Position in the European Environment |
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Category: |
EC Centric Issue |
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Location: |
Techgate Technology Center in Vienna, Austria |
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Organizer: |
Christian Bauer, ICNM |
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Host: |
EC Austria Conference Series |
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Panellists |
· Dr. Manfred Tscheligi (Cure)
· Mag. Beatrice Verdino (PXP Österreich)
· Mag. Oliver Holle (SYSIS Interactive; Winner of the Austrian Multimedia Award 2001)
· Dr. Ross King (ARC Seibersdorf Research GmbH, Research Studios Austria)
· Moderator: Christian Bauer (ICNM - International Center for New Media, Salzburg) |
Germany currently has 61 Mio users of cellular phone networks. Worldwide altogether 1,3 billion people use cellular phones. These are more users than fixed networks ever had. For 2008 it is estimated that the 2 billion barrier will be broken through, with a highly flourishing zone in Asia. Market researcher Frost & Sullivan have estimated in their recent study that the revenue in Europe for mobiles games up until 2006 will be 6,3 billion Euro. In comparison: in 2002 this market in Europe was just 720 Mio Euro.
In the following the importance of content in terms of revenues in west of Europe is listed:
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Content |
Turnover 2006 in
billion Euro |
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Games |
5,00 |
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News |
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Music |
2,70 |
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Youth fun |
2,10 |
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Edutainment |
1,70 |
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Finances |
1,60 |
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Adult entertainment |
1,30 |
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Directories |
0,70 |
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Transport |
0,06 |
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TOTAL |
18,86 |
During the BRT four trends in mobile content were identified:
1) Audio has passed, vision is on its advance
The European multimedia market currently transits from text-based to picture-based communication: Voice – Text - Still images, MMS - Video clips, streaming - ???. With this shift from mainly voice-oriented usage to multimedia, data-dense services comes a side-effect beneficial for carriers: networks are used to full capacity. Vodafone expects a redistribution in the following way:
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2004 |
2008 |
2020? |
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Data Services: 20% |
Data Services (web, IMS): 40% |
Data services: 100% |
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Voice Services: 80% |
Voices Services: 60% |
What this means in terms of revenues has been researched by SOREON Research in their recent study “From SMS to videoclip: Dynamic impulse by mobile data application” (autumn 2003). They estimate that in Germany in 2007 11,4 billion Euro revenues will be made with data application.
Besides of these grand expectations, the actual turnover by data services is far less than i.e. the sending of short messages. Customers are not yet hooked on to the use of mobile email or MMS as much as to SMS due to
(1) slow transfer rate
(2) expensive rates
(3) lack of cost transparency
So it comes as no surprise that no more than 3 Mio of altogether 65 Mio cellular phone users in Germany make use of the new multimedia portals like Vodafone live, t-zones, I-mode (E-Plus) and O2 Active.
Although in the first half of 2003 more camera phones have been sold than digital cameras, this boom is explicable due to high sells in Japan and Korea. In Europe the shift from audio to vision is predicted by visionaries from industry though the users have not clearly committed themselves.
2) Emailing via the mobile internet
A mobile content study by the market research company PbS AG from Munich illustrates that although the private stationary internet usage as well as the mobile phone usage has increased, the combination of both in form of GPRS, WLAN or HSCSD has not gained weight the same way. 11% of the interviewed people are interested in mobile internet. Especially high is the interest in Wireless-LAN (33%) although the actual usage lack much behind (14%). When interviewed people were asked why they would start using Wireless-LAN the most often given answer was to send and receive emails, followed by accessing the Internet when being on the move and accessing dates and address details. Similarly, the interest in UMTS is high though actual activities on the side of the customers are still missing. Mobile devices such as PDA, Communicator, MDA/XDA or Blackberry are rarely used.
3) Content is king - and costly
As the trend from audio to vision indicates, cellular phones are used as more than simply a telephony tool. Mailbox, SMS but also offline games and downloading ring tones have established as common use. Favourite content services are news, weather, sports and the schedule of public transport. The will to pay for content is significant: even today, nearly half of the users pay for the information services. In particular they are prepared to pay for traffic news, arrival times of public transports, sport information as well as information on hospitals.
In the following the importance of content in terms of revenues in west of Europe is listed:
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Content |
Turnover 2006 in
billion Euro |
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Games |
5,00 |
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News |
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Music |
2,70 |
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Youth fun |
2,10 |
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Edutainment |
1,70 |
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Finances |
1,60 |
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Adult entertainment |
1,30 |
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Directories |
0,70 |
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Transport |
0,06 |
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TOTAL |
18,86 |
The ring tone market is flourishing and for the next years it is predicted that this won’t change. For 2004 it is assumed that Europe-wide 150 billion downloads will be done, costing between 1 and 3 Euro. In 2003 in the UK there have been more ring tones downloaded than CD singles bought.
In the long-term, quality and quantity of the data on offer will be crucial. “Content is king”, meaning that whoever is not paying their content provider a fair share will lead behind and will be left with low quality data.
4) Zapping on the mobile phone
UMTS might be a solution to some obstacles like speed and size, but two problems will remain: with the point-to-point transmission (one piece of information is sent to one recipient) high costs are created and capacity shortages are still for sure because many users in one UMTS square download video streams even the UMTS network will perform badly!
Because of this the digital video broadcasting terrestrial mode (DVB-T) is indispensable for future mobile phone TV. The advantages are obvious: digital TV is on its fore (in Germany the whole of Berlin and Brandenburg is fed with digital TV), plus the DVB-T mode is making mobile transmission possible even if the receiving end is moving fast. However, an optimised DVB version for handhelds is necessary due to the high electric power consumption. A European expert group is currently working on the mode DVB-H ("handheld") which is expected to come up with final specifications in March this year. A reduced electric power consumption is achieved by an optimised data rate for a display sized 360 times 288 pixel and improved compression method.
Whereas DVB-T is free of charge for the recipient (apart from public TV fees), DVB-H is not. For carriers who have spent extensive amounts of money for the purchasse of UMTS licenses it would be a nightmare to see customers buy subsidised TV-mobile phones with which they watch TV nearly for free. Therefore the big players in the cellular communication network are already working on scenarios in which digital TV gets linked to interactive services. Nokia, for example has designed the "Server IP Datacasting". This mode bundles advantages from GSM, UMTS and DV-broadcasting. As a result, a restricted program is offered free of charge with additional interactive services to be paid for. This allows for offering individual packages similar to what the pay-channel "Premiere" does. The integration of GSM and UMTS makes it possible for customers to use the feedback channel and access services like info sites, e-commerce or sport betting. Beyond doubt, carriers urgently need the revenues made out of this.
Whatever way digital-TV finds its way onto the mobile phone, it is clear that in 2004 pilot projects will be run. Mobile phone-TV is likely to become a prominent topic at the Cebit 2005.
Lessons Learned |
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1. Mobile phones potentially satisfy the archaic needs of human beings, that is, the seamless possibility to communicate and socialize.
2. Services and content for mobile devices cannot simply be transferred onto a new technical platform but need to be handled differently.
3. The personalisation of content ranks high as customer’s benefit and should thus be focus for further research and future products.
4. Much work needs to be done to demonstrate to users the added value they gain when investing in mobile devices. Users’ acceptance can be increased by work on branding.
5. More user-friendly design of mobile devices is needed (more flexible terminal equipment and bigger displays).
6. Prices are a key incentive for customers to get hooked up to the next generation phones. Carriers need to reduce the costs charged for (i.e. offer reasonable flat rates).
7. Content providers who have traditionally worked in completely separate domains might become competitors (i.e. local newspapers with regional competence and corporate groups like Max Cityguide).
8. The sector is not waiting until UMTS has started but develops services which work on any standard. That is one of the most important rules right now for the sector: future devices have to deal with all mobile network standards, from GSM to WLAN up to UMTS.
9. Since the killer application has not been established yet for MMS – and the experts of the BRT doubt that there will be such a killer application like SMS for the wider mobile multimedia sector – users’ needs cover a wide range which needs to be technically supported.
10. Although experts agree in that it is not likely to have just one single application succeeding it is the benefit of location-based services which they see as most important. |
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