Mobile Sees Slow Growth

Nov 16, 2008  •  Post A Comment

Mobile video was the hot new thing just a few years ago, but the medium hasn’t ignited consumer interest as expected since then.

Experts urge patience, however, and say mobile video consumption and usage are growing by small steps every day. Nielsen reports that 15 million mobile users subscribed to a mobile video service as of second quarter 2008, up 25% from the year before.

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That number should increase by a bigger percentage in the year ahead due to new video pricing plans from carriers such as Sprint and the pressure the technologically advanced iPhone has placed on competitive handset makers, who will roll out souped-up cell phones in the coming months. In addition, programmers including Discovery are beefing up their mobile lineups, while the mobile video service MediaFLO expects to offer a nationwide footprint in February.

These developments should give mobile video an additional boost next year, as will the increased availability of news and sports on mobile phones. “One thing that consistently drives viewership is immediacy,” said Frank Barbieri, CEO of Transpera, a mobile video technology company. “When video is timely and relevant, viewership climbs and viewers come back. This is why news, weather and sports do very well.”

Both the general election and the primary races, as well as sporting events such as golf tournaments and live college football games from CBS, ESPN and Fox, fared well on mobile phones, said Jonathan Barzilay, senior VP of programming and advertising with MediaFLO.

“We need to continue to build out programming so we have robust offerings in news and sports to attract consumers who want to be connected,” he said.

Those categories may get consumers in the door, but mobile video users also are checking out other programming genres once they have mobile video. Music videos, comedy clips and kids programs attract audiences on mobile handsets, said Greg Clayman, executive VP of digital distribution and business development at MTV Networks.

With content in those categories from MTV, Comedy Central and Nickelodeon, MTV Networks is delivering more than 10 million mobile streams per month, up 130% from a year ago. “I attribute that to there being more mobile video subscribers and more handsets having video capabilities,” Mr. Clayman said.

For now, consumers don’t rely on mobile video as a replacement for traditional viewing. They’re mostly using the phone to watch and share clips immediately, Mr. Clayman said. “It’s still a small screen, but if you want to show something to someone or you want to kill time, it works.”

Discovery has seen a growth in unique users and minutes during the past year, with the audience doubling specifically for streamed Discovery programming on mobile phones, said Doug Craig, senior VP of programming for digital media at Discovery Communications.

But don’t expect scale in 2009, he warned. The number of people consuming mobile video is still small, so the year ahead will be about growing the audience and improving advertising opportunities in mobile video. Later this month, Discovery plans to launch video on its mobile Web sites for networks including Discovery Channel, TLC, Animal Planet, Planet Green and Discovery Health.

Growth will come as well from the social media experience of phones, said Craig Vaughan, senior executive in business development at Creative Artists Agency. While premium content will attract ad dollars, users will likely pass around user-generated video across social networks on phones, he said.

That will drive adoption just as consumer-created content drove interest in Web video. “[User-generated video] could also be the catalyst for mobile video,” said Ryan Burke, managing director with research firm Compete.

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