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Mobile TV Makes Mark

Oct 9, 2006  •  Post A Comment

The mobile TV business may be in its infancy, but it’s growing fast.

That’s the conclusion of a recent report from Telephia, a mobile video research firm that reported last month that the mobile TV audience grew to 3.7 million subscribers in the second quarter of this year, an increase of 45 percent from the first quarter.

“Mobile TV just launched not so long ago, and it already has 3.7 million users and is growing fast,” said Kanishka Agarwal, VP of new products for Telephia.

This research suggests that mobile TV is on track to be the big business that most media companies will bet on. However, there’s other research indicating that mobile TV is merely a niche market at best. For instance, a recent Frank N. Magid Associates study on the behavior of “Millenials,” that all-important age group from 10 to 29, ranks video at the bottom of “must have” capabilities of a cellphone, with only 2 percent saying video is necessary compared to 48 percent who deem text messaging a “must have.” The same study also found that about 60 percent of users in this age group have cellphone video capability but don’t use it.

That’s why some executives suggest privately that the hubbub over cellphone video is much ado about nothing and that TV companies are placing bets on cellphone video only out of fear of missing a possible boat. Indeed, the Magid research indicates that the early-adopter generation is much more keen on laptops for video and cellphones for communication instead. In addition, ESPN Mobile shuttered its service last week after logging less than 30,000 customers for it, another sign that mobile TV is a tough nut to crack.

Instill Demand

But that’s partly a marketing issue, said Adam Guy, managing partner of research firm Compete, who oversees wireless research. Cellphone video may not hold much interest now for the mass market, “but they can be trained to want to if the marketing messages are right,” he said. “It isn’t a question of demand, but one of marketing savvy.”

Cellular carriers are big spenders on advertising and TV executives expect providers will flex their marketing muscle in the cellphone video space next year. Programmers are doing their part by developing cellphone video content and strategies.

“We expect a very big audience, so the implications are `Think across the three screens,”‘ Mr. Agarwal said. “Programmers need to think about the mobile screen too and tailor content for the 2-by-3-inch viewing experience,” he said.

That’s what networks say, too. The ideal cellphone experience works in conjunction with and converges with the TV, said Cyriac Roeding, VP of wireless for CBS. For instance, CBS offered a subscription voting application for its most recent season of “Big Brother” that let users voice their opinion on who should stay or go. “You should make wireless part of a larger experience,” he said.

Additive to TV

While the business does face technical challenges, such as limited battery life and time-consuming downloads, those will get worked out over time, said Clint Stinchcomb, executive VP of New Media and HDTV for Discovery, which launched a mobile phone service this summer. “When you think about what will drive viewers to mobile content, it’s similar to platforms of the past. What will drive them to it is compelling quality and a variety of content. That’s what drove cable adoption,” he said.

Mr. Agarwal likens cellphone video to bottled water. While consumers have tap water for free, they’re often still willing to pay for bottled water at grocery stores, restaurants and hotels. “I believe it’s a complement, not a substitute,” he said.

Telephia’s studies also revealed other interesting findings about the usage of cellphone video today. The research found that cellphone video prime time is between noon and 8 p.m., with about 61 percent of usage occurring between those hours. That makes mobile TV a commuter experience and something people dip into as a break from work.

The data also revealed that mobile video usage is not being driven only by youth. About 50 percent of mobile video users today are ages 25 to 36, compared with 24 percent of the total mobile population. The group is ethnically diverse; about 16 percent of mobile video users are African American and 27 percent Hispanic. About 70 percent of mobile video users are men.

Today’s consumers are also watching in ways that are surprising. About 82 percent of mobile TV users watch for more than five minutes at a pop, longer than expected. When the cellphone video business started, the conventional wisdom was that mobile phone viewers like to get in and get out, consuming 30-second snippets of news or information here and there. But that’s not the case so far.

“People tend to watch mobile video on the phones longer than expected,” Mr. Agarwal said.