Thursday, March 23, 2006

The New MTV

The New MTV

MARCH 23, 2006

Some call it the third screen. Some call it the small screen. Others simply call it mobile television (MTV). But everyone agrees, it represents a huge opportunity.

2006 is the year that carriers, content providers and marketers are sitting up, taking notice and starting to experiment and invest in mobile television initiatives.

"eMarketer looked at the various global trials, carrier and content provider announcements and concluded that there will be well over 100 million active users of paid or sponsored mobile broadcast video services globally by the end of 2009," says John du Pre Gauntt, eMarketer Senior Analyst and author of the new report, Mobile Television for Marketers: Monetizing the Smallest Screen. "Of course, that number is easily swallowed by forecasts of well over 2.5 billion mobile users in the same time period."

 

The demographics, income and spending patterns of early and near-term adopters will be crucial for marketers trying to determine whether mobile TV represents a sub-market or the next huge mass market for mobile services.

"Everybody's basically putting their toe in the water," Leslie Moonves, chief executive of CBS told The New York Times. "We're all aware how hugely significant this is going to become both culturally and financially in the next couple of years."

From a technical point-of-view, the two pivot points for mobile TV are growth in smartphones and growth of advanced 3G networks. These are table stakes to move mobile TV past the pilot stage toward critical mass and finally mass-market penetration.

Estimates of global subscriber numbers on 3G networks showed wide disparity. ABI Research reported 2005 global figures to be 42 million.

 

Informa Telecoms & Media put the 2005 figure over 70 million.

 

"Hand-in-hand with technical obstacles, mobile TV players must work the commercial side of the equation," says Mr. Gauntt. "Marketers shouldn't believe for a minute that either the mobile carriers or the content providers have cracked the business model, let alone the digital rights issues that will be crucial to migrate mobile TV from one market stage to the next."

Carriers are hard at work on the problem, however.

The most extensive consumer trials of mobile TV have been in Europe, with one pilot in France, another in Finland, two in the UK and another in Spain. The general results show willingness on the part of participants to purchase mobile TV services, typically with a low flat-rate fee. Users also demonstrated viewing habits roughly in line with expectations (eg preference for familiar and/or short program offers centered around sports, news and entertainment; viewing during non-peak hours; viewing during both the commute and at home).

 

"Perhaps most importantly, customer surveys consistently show reticence on the part of consumers to pay more than $5 - 10 extra per month for mobile data services in general," says Mr. Gauntt. "With all the hype about $0.99 news pieces, $1.99 episodes of broadcast television or all-you-can-eat monthly subscriptions, the danger of users receiving phone bills as thick as phone books is very real."

Learn about opportunities, and where the problem lie, read the new eMarketer report, Mobile Television for Marketers: Monetizing the

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