LAS VEGAS-With more than 6 million users already on board in the United States and year-over-year growth of 188 percent last year, according to Telephia, mobile television is a force to be reckoned with-so much so that it got its own standout show at the National Association of Broadcasters convention in Las Vegas.
Many in the industry are trumpeting the fact that mobile TV has already attracted millions of users (2.7 percent of all U.S. wireless subscribers) despite its embryonic state, but more devices that are capable of playing video must hit the shelves before the industry reaches its targeted penetration of around 30 percent within the next five years. As of now, only 15 percent of all mobile devices are video capable.
Show me the money
Still, that says nothing of mobile television’s arrival as a revenue generator.
“As of today mobile video is actually generating more revenue than mobile games at a lower penetration rate,” Levi Shapiro, an analyst at Telephia, told an audience of about 500 at the Mobile TV and Video Summit.
One panel of programmers and broadcasters was almost evenly split in forecasting widespread adoption
within two years or three to five years.
A year to experiment
“We’ve been regarding this as the experimental phase,” HBO executive Bob Zitter said. “We think that portable video is going to be one of the larger opportunities for those of us in the entertainment business.” Zitter added that HBO does not believe broadcast mobile TV is going to live up to the hype. “When a consumer has the ability to watch television when they want to . over 70 percent of their viewing is on-demand,” he said, adding that “nobody really wants to turn on a show and watch it” midstream.
“If you’re going to push things and capture it on a broadcast model on a phone, someone has to plan that in advance,” Zitter said.
Jeffery Brown, an executive at Qualcomm Inc.’s MediaFLO division, said the challenges the industry faces are simply reflective of the size and scale of the American TV industry and all of its intricacies. “This is an ideal market,” he said.
“The trends are young and early-adopter. The brands that are successful correlate that way,” said Robin Chan, associate director of entertainment programming at Verizon Wireless. “We’re looking at broadcast and on-demand as completely complementary.”
Joe Zaller, VP of marketing at Snell and Wilcox, concurred: “We see potentially a hybrid evolving between the broadcasters and unicasters.”
Advertising to subsidize growth
Regardless, analysts and executives alike predict big things on the advertising front to come to fruition much quicker for mobile TV than it did in the early days of the Internet. Some believe advertiser-supported video could catapult mobile TV onto the devices of millions who wouldn’t otherwise seek out the service.
“I think this year is about exploring,” Ericsson Inc. executive Fredrik Borgstrom said. “It’s just a question of how far you can go before it’s intrusive.”
Roger Wood, an executive at Amobee, said the creation of an orderly marketplace would lead to innovation in mobile advertising. “I believe the nature of the experience, the aspect ratio of the screen . lends itself to a completely different mentality about advertising,” he said.
A word from Qualcomm
In his keynote, Qualcomm Inc. CEO Paul Jacobs touched on the company’s recently launched MediaFLO USA Inc. mobile TV service, but also took his presentation beyond the fast-changing pace of mobile television and hinted at the array of applications that he expects the wireless industry to still fulfill on mobile.
As Qualcomm pursues further innovation on the technology, it’s equally committed to developing applications in the wireless space that bring more convenience and ability to the palm of users’ hands in a mobile device, he said.
“People are used to interacting with their phone. . Already people are predisposed to interact with their phone,” he said. MediaFLO technology will quickly evolve to allow the local insertion of targeted advertising and cross-promote programming with relevant online properties.
“We’re not here to ram technology down people’s throats,” Jacobs said. “Qualcomm is about supporting multiple wireless technologies.”
Heart-rate monitors, tagging and sharing favorite restaurants or locations with friends, personal identification, a digital wallet for mobile commerce and enhanced media centers that connect with other in-home devices through Wi-Fi were just some of the ideas Jacobs put to the audience.
“In terms of the size of this market, it is the largest consumer electronics market,” he said, adding that at least one-third of the world has a cellphone and more than 430 million people are already subscribed to 3G networks, which trumps the 350 million people subscribed to cable television.
