A handful of mobile players are trying to cram the silver screen onto the third screen. But whether there’s a business case to be made for mobile movies is far from clear.
The first wireless films came online for U.S. consumers in December 2005 with a less than stellar cast: Sprint PCS (at the time) teamed with the Silicon Valley startup mSpot to launch a feature-length film service that spotlighted second-rate films such as “Short Circuit 2,” John Wayne’s “Angel and the Badman” and Bing Crosby and Bob Hope in “Road to Bali.”
Sprint Nextel Corp. has since built substantially on its initial offering, launching a wide variety of recent blockbusters, and mSpot now powers a similar service for Bell Canada. Meanwhile, plenty of others have made noise – while not necessarily making money – in the space. Blockbuster Inc. last year entered talks with all the major handset manufacturers to make it easier for consumers to watch
films on their phones, according to news reports. Motorola Inc. made headlines earlier this year with rumors that it will offer full-length movies pre-formatted for its multimedia devices, France Telecom unveiled plans to offer hundreds of flicks across the Web, cable and mobile phones, and MTV last year aired the feature film “Super Sweet 16: The Movie” on mobile before the film appeared on cable TV.
Mobile constraints
But in this era of instant gratification and wide-screen plasma set-top boxes, are people really watching 90-minute films on their handsets? Well, yes. Kind of.
“We’ve seen double-digit growth month-over-month since launch,” said Bill Gaudreau, who oversees mSpot’s movie programs and serves as director of business development. “It does very well for us. And as the studios sign up for the service, every single one has come back and said how surprised they were at how well it’s done.”
It’s worth noting, though, that other North American operators haven’t exactly stampeded to deploy mobile movie offerings. AT&T Mobility’s new video offering, which is powered by Qualcomm Inc.’s MediaFLO network, includes a channel dedicated to current films from Sony Pictures, and several carriers in Europe and Asia have toyed with long-form video. For the most part, though, operators are opting to focus on music, games and other types of video content – not the kind that requires a 90-minute investment from users.
And the challenges in long-form mobile video go beyond obvious constraints like limited battery life and tiny screens. Because studios typically use boilerplate cable pay-per-view agreements in mobile, the viewing window can be as short as 24 hours – which is a major headache for users trying to consume an entire movie in 10-minute bites, as many mSpot viewers do. More importantly, the business isn’t the most lucrative space in mobile entertainment, Gaudreau said.
“It’s a tough game, to be really with honest with you, with the margins involved with the carriers and the studios,” Gaudreau said. “I don’t see the carriers budging, and I don’t see the studios budging.”
Potential shown
There are a few reasons for optimism, however. A Yankee Group study found that one-fourth of U.S. adults are interested in watching full-length films on their handsets, and a surprising 45% of teens want to watch mobile movies. Those figures are sure to increase as more “iPhone killers” come to market, boasting bigger screens, increased processing power and longer battery life. WiMAX and other next-generation networks will deliver higher quality content, and users will slowly learn to sideload content onto phones for on-the-go consumption later.
Also, evolving viewing habits are likely to drive growth in all sorts of mobile video including mobile movies, according to Neil Sharma, SVP of Strategic Initiatives for PacketVideo, which develops technology for mobile multimedia offerings. While older consumers are sometimes still tied to the idea of watching specific programs at broadcast times, younger viewers are used to watching what they want, when they want. And, increasingly, where they want.
“There’s an evolutionary path,” Sharma observed. “We once saw everybody huddled around the TV, then you saw the ability to purchase that content, then rentals, pay-per-view and on-demand. . I feel that the generations are going to start to creep into each other. You have the older who can understand live TV, and the younger who are on-demand driven. As the platforms start to converge, you’ll see people starting to consume the content how they want.”
Intense competition for time
Regardless of what form it’s in – downloaded or streaming, long-form or short-form – mobile video will vie for users’ attention against a host of other mobile offerings, according to Screen Digest analyst Julien Theys. Perhaps the most important question in mobile movies – and in wireless entertainment as a whole – is how much demand for solitary, passive applications such as mobile movies vs. more interactive offerings that include community features.
“Movie watching on mobile will compete with other mobile activities that are expected to fare very well (i.e. social networks, content upload),” Theys said via e-mail. “Whether younger users will prefer participating or watching remains to be seen; one thing is sure though: if mobile movie watching does not become easy and competitive with online offers, younger users will have even more time to spend on socializing and sharing their own content with the mobile.”
