Hurdles to mobile video
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Despite the increased bandwidth and improved capabilities of the mobile-phone networks in the U.S., relatively few people use their cell phones to watch video -- according to analyst Mark Donovan of M:Metrics, less than 2 million people watched programmed TV on their mobiles. Donovan offered that stat at the iHollywood Forum’s Mobile Entertainment Summit this morning, and several other speakers opined on what’s holding up the market. The consensus: advertiser-supported programming is the way to go, but carriers and content providers haven’t agreed yet on a way to do it.
John Smelzer, senior vice president and general manager for mobile at Fox Interactive Media, offered a typical comment. Advertising dollars are shifting from old to new media, and advertisers are poised to try to reach mobile phone users, he said, then added, ‘We haven’t shown the advertisers that we have a valid model....We in the industry are leaving money on the table right now.’
The problems with the current model start with the lack of a standard way across mobile-phone carriers to measure and report the number of people who see an advertisement, several speakers said. In other words, there’s no equivalent of an Nielsen for mobile video. There are a number of companies working on the issue -- witness the announcement today from Rentrak and Hiwire to conduct a trial of mobile TV audience measurement -- but much work remains to be done.
The measurement problems deter advertisers from throwing the kind of dollars into mobile video programming that they’re starting to do with broadband video. The shortage of dollars also makes it hard for carriers and content providers to agree on how to split that revenue, said Erik Smith, vice president of content and programming for Metacafe. In effect, the two sides are fighting over crumbs.
At the same time, several speakers at the conference said carriers had been handicapping the market by charging too much for mobile video services. Chandra Hill, executive director for mobile business operations at Fox Interactive Media, said some of the early offerings were 40% to 50% of the price of the typical mobile voice service. She praised Sprint for starting to include a handful of video channels -- including Fox Sports -- in its standard, $15-a-month data service.
Sam Matheny, general manager for News Over Wireless (it aggregates and delivers local TV stations’ news programs to cell phones), said the business-model issues were just part of the problem. Other hurdles include bandwidth, the supply of video-capable handsets, the programming that’s available, and consumers’ lack of awareness. There’s also the issue of finding what’s available, said Helene Henriksson, a vice president at Ericsson. It’s too hard for users to locate and sign up for mobile video services.
All complaints aside, the panels were upbeat about the future prospects for mobile video. The vibe was similar to the buzz in the late 1990s for video over the Net, which, as things turned out, was a few years ahead of its time. As Fox’s Smelzer put it, even though the consumer proposition hasn’t been worked out yet, ‘I’m very bullish on mobile TV.’