Source: Flickr user Kojach
If you experience déjà vu when reading headlines like “Mobile TV ready for prime time” and “Mobile TV gains steam in the U.S.,” you’ve probably followed the industry for a while. We were up to our ears in claims like these a few years ago, when players rushed to build out nationwide networks dedicated to bringing video to mobile phones. Thanks to a lack of demand, only Qualcomm’s FLO network saw the light of day, and even that service has gone dark. And while analysts generally agree the market will grow in the coming years, eMarketer predicts only 17.6 percent of the U.S. population will be watching mobile video in 2014.
But this week, at the National Association of Broadcasters’ annual trade show in Las Vegas, the Open Mobile Video Coalition (OMVC), a consortium of broadcasters pursuing mobile, announced that 73 stations in 33 markets are now transmitting mobile DTV signals for on-the-go users. The group, which consists of 900 stations from Fox, PBS and other networks, also claims mobile DTV signals will reach a whopping 61 percent of all U.S. viewers within a year. The group is showcasing an external tuner for the iPhone and iPad, and it hopes to entice manufacturers such as Samsung and LG Electronics to produce handsets that can support the technology.
Such an aggressive build out stems in part from mobile video’s low overhead: The technology for it requires only a transmitter affixed to an existing tower, and can be deployed by TV stations for a one-time fee of less than $100,000, or annual payments of roughly $10,000.
Still, there’s precious little evidence users actually want to watch traditional TV broadcasts on their phones, and even less evidence that they’ll pay for it. (OMVC’s website notes a study indicating only 44.4 percent of U.S. mobile users are even interested in mobile television, regardless of cost.)
But while I’m skeptical of the prospects for the OMVC, I think there are a few things that could finally give mobile TV the push it’s needed for years. Instead of simply cramming TV broadcasts into phones, the industry must find ways to address the shortcomings of mobile and customize services that add value to video content. Rather than trying to resurrect the Sony Watchman, those trying to monetize mobile video need to address some key challenges:
1) Mobile-optimized content and services: That doesn’t just mean repurposing video for the smaller screens of mobile phones (although that’s absolutely necessary); it means on-demand functionality in addition to content that is programmed at specific times like traditional TV. MobiTV has gained an impressive following by coupling on-demand content with live TV and optimizing it for mobile use. (It’s worth noting, though, that while MobiTV claims more than 10 million subscribers, the company has yet to discuss its finances and has taken in a staggering $100 million in funding.)
2) Bigger and better devices: Consumers are increasingly interested in larger phones with big, bright screens of four inches or more that deliver a far-superior viewing experience than smaller handsets. And the emerging tablet market is already stoking our appetite for mobile video, according to Cisco, which recently reported global mobile data traffic increased by a factor of 2.6 last year. Video accounted for roughly 50 percent of that data by the end of 2010, Cisco said, and will account for 66.4 percent in 2015.
3) Improved connectivity: Trying to watch video on 3G networks is sometimes as painful as surfing the Web on a dial-up connection, and Wi-Fi is still far from ubiquitous. Mobile DTV solves the connectivity problem by using a chip embedded on the phone to receive the video signal, but manufacturers have been hesitant to invest in those chips until they see some real demand for mobile DTV. Meanwhile, the OMVC has yet to say when supporting phones may come to market, but mobile DTV phones may require carrier subsidies to defray costs, adding yet another speed bump to the picture. The emergence of LTE networks may lay the technological foundation for carrier video services, but that foundation is only now being built.
4) Advertising dollars: Consumers have historically been loath to pay extra for mobile video, so the key in creating viable business models will be in generating advertising revenues. And for those ads to be truly lucrative, they will have to be highly targeted based on location, time and the type of content being viewed, among other factors.