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TV Networks Targeting Growing Smartphone Market

Feb 8, 2009  •  Post A Comment

The frequent use of Apple’s iPhone to view mobile video is spurring television networks to develop new programs, services and features for Internet-enabled cell phones, or “smartphones.”
BlackBerry
NBC Universal and MTV Networks are among the media companies that are working to capitalize on the iPhone-stoked demand by optimizing Web sites for cell-phone viewing and developing new offerings for the iPhone application store (as well as for BlackBerry’s copycat store coming soon).
More than a third of iPhone users watch video on their phones, 10 times the average mobile user, Nielsen Mobile reported last month. Nielsen Mobile also reported that 10.3 million mobile customers watched video on their cell phones in the third quarter of 2008, a 14% jump from the previous quarter. Many are watching video from Web sites like YouTube and NBC.com on their mobile devices.
“People spend more time on the Internet on the iPhone, more people go to mobile sites, and because of that more people are watching video, doing their banking, checking weather,” said Greg Clayman, executive VP of digital distribution for MTV Networks. “Across the board, mobile usage is rising, and with it mobile video usage is rising.”
That has spurred MTV Networks to tweak its Web sites to make them iPhone- and smartphone-friendly, he said. MTV also plans to launch more applications on iPhones, such as the $1.99 “SpongeBob Tickler,” an animated version of the popular character that users can shake, poke or tickle, Mr. Clayman said.
The iPhone store registered 300 million downloads of applications in its first 150 days on the market last year. Programmers get 70% of the revenue from downloads, with Apple keeping the rest, so networks are hunting for new applications to add to the store.
BlackBerry wants a piece of that action and is launching its application store in the coming months.
That’s good news for networks.
“From a programmer’s perspective, people who have a smartphone tend to use content more than people who don’t,” said Salil Dalvi, senior VP of mobile platform development for NBC Universal. NBC reported last week that 60% of the views for NBC mobile content originated from smartphones, even though only 10% of cell phones on the market are smartphones, Mr. Dalvi said.
Given that skew, NBC Universal is devoting more resources to optimizing its Web sites for smartphones. “It needs to look better, have more detailed photos, more information on the shows and an overall package around the videos,” he said.
The iPhone likely will drive purchases of competitors’ smartphones, said Craig Vaughan, a senior executive in business development at talent agency Creative Artists Agency. “If I’m a handset-maker I need an appropriately priced handset in the market around $150 to $200 that has features like the iPhone, a screen for video and a fast connection.”
Programmers can make money on smartphones through license fees for content, by revenue sharing on feature downloads and via additional video views of their ad-supported TV shows.
Carriers are poised to make money, too, because consumers need data plans to access the mobile Web; most cost about $30 a month, Mr. Vaughan said.
Look for more experimentation in mobile video programming this year, said Tom Guida, a new-media attorney with Loeb & Loeb. “You have enough of an audience now to test content. The iPhone is a living, breathing proof of concept,” he said.
Next year, mobile video likely will include interactive features. At the recent NATPE conference, mobile TV service MobiTV demonstrated an interactive version of “Mad Men” that lets users watch the show and click on a character to jump into his or her backstory, said Jack Hallahan, VP of advertising and brand partnerships at MobiTV. That technology will roll out sometime next year, he said.
(10:20 a.m.: Corrected statistic in 9th paragraph)

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