2007: The year of mobile TV
Providers are scrambling to let consumers take the boob tube to go - but are we willing to pay up for the privilege?
(Business 2.0 Magazine) -- Will 2007 be the year American consumers can finally watch live football wherever and however they want? Judging by the onslaught of mobile TV-related announcements and demos (the majority of which made reference to the current football season) at this week's Consumer Electronics Show, the answer is a resounding "Yes."
But just how much will even the most hard-core football fans - or even just your average TV addict - be willing to pay to carry their content with them wherever they go?
One of the biggest CES announcements, made last Sunday, was that Verizon Wireless (Charts) would soon launch live, full-length television programming, including hits such as Fox's "24" and Comedy Central's "The Daily Show" on cell phones. Verizon's calling the service, powered by Qualcomm's MediaFLO technology, V Cast Mobile TV.
The company won't say just how much they will charge for the new offering, but subscribers to Verizon's current V Cast service, which offers access to videos and music, already pay $15 a month, on top of the price of a voice plan. And it's not clear just how much more they'd be willing to shell out.
"You've got a bit of a disconnect between the current pricing of these services and the fact that this is still an early phase in the market, and there is somewhat of an unwillingness to pay up on the consumers' end," says Linda Barrabee, an analyst with the Yankee Group. "The mobile market is still primarily about voice, then messaging."
According to Barrabee, an estimated 5.3 million wireless users - a mere 2.5 percent of total subscribers - currently subscribe to video services. Of course, that number will probably grow, but just how much will depend on what mobile TV services cost and how easy they are to use.
"It all comes down to form factor and price point," Barrabee says. "Unless it's easy for the consumer to use, mobile TV will continue to be an experience for early adopters only."
But companies like Verizon are hoping to reach far beyond the early adopters.
One way they may be able to do that, says Barrabee, is by letting subscribers test a service before they commit, and by offering them several ways to pay up.
Verizon's already done that by recently launching pay-by-the-day access to V Cast videos and music. The service costs just $3 a day, and users don't have to commit beyond a single day. This approach could work especially well with the youth market - the type of TV-loving, yet cost-conscious customers that V Cast Mobile TV is likely to attract.
Another way around the pricing problem is an ad-supported, or at least partially ad-funded, model. That could be what mobile television service provider MobiTV has in mind: Monday at CES, the Emeryville, Calif. based company announced it will soon add an interactive advertising component to its mobile television technology, which powers the mobile TV services for Sprint Nextel (Charts) and Cingular Wireless (Charts).
MobiTV will enable advertisers to send out promotional coupons, WAP-based surveys and contests, and deliver localized ads based on users' zip codes. The company says it currently has over one million paying users. And if advertisers start snapping up interactive ad space on MobiTV's service, that could provide Sprint and Cingular some additional revenues, lowering mobile TV subscription fees for users.
Samsung also jumped on the mobile TV bandwagon at CES, announcing on Sunday its new mobile television standard, dubbed A-VSB. The Korea-based company says that the new technology will enable local broadcasters to transmit a mobile digital TV signal on the same frequency they now use for standard broadcasting, meaning they won't have to buy up additional spectrum.
By transmitting the signal that way, consumers will be able to watch live, local broadcasting on any A-VSB compatible mobile devices (which Samsung intends to sell soon as the new standard is adopted), even while traveling at high speeds.
"You could say we're liberating the couch potato," said John Godfrey, vice president of government and public affairs at Samsung, moments after the company unveiled the new technology in Las Vegas.
But just how badly does the couch potato want to be liberated? And at what price?
In places like Korea, where Samsung is based and where mobile TV has already taken off, nearly 14 percent cell phones support Digital Mobile Broadcast television, according to ABI Research. That's a high number, compared to most other countries, except maybe Japan.
But ABI Research expects mobile TV will be someday be a cash cow globally as well. According to the firm's forecasts, there will be half a billion mobile video subscribers by 2011. What was a $50 million industry back in 2005 will be worth several hundred billion dollars by 2011. And ABI believes advertising revenues from broadcast mobile video will dwarf subscription revenues from these services.click here.