Making (or Breaking) Mobile Movies

The focus of the cover story for our first issue of 2005 is mobile video, a service that was thrust quickly into the spotlight in 2004 and one we expect to continue gathering momentum throughout this year. That kind of sudden ascent is not new to wireless. This industry has a long-standing tradition of elevating new technologies and services to near legendary status before they even have a chance to prove themselves. Some do prove themselves, and some end up on the scrap heap before we even have a chance to commit their acronyms to memory.

The challenge for proponents of mobile video will, therefore, be similar to the challenges faced by those who got behind so many wireless phenomena before them: how to live up to the promise that precedes them. In the case of mobile video in particular, it will be the wireless service providers — the entities responsible for translating technological capability and wow-factor into actual revenue that creates a substantial return on their investments.

That brings us to another standard convention of the mobile sector: wireless service providers' long-standing challenge to effectively market services and position them in appropriate customer sectors. Picture messaging was almost an accidental wireless success, thanks to a contingency of (mostly younger) consumers who like the novelty of a camera phone — to the point that an integrated digital camera is fast becoming a standard feature in mobile devices. But the service providers helping to subsidize those cameras are still challenged with trying to convince consumers to send photos over their networks, which is the only way the carriers make any money from the application.

Apply that scenario to wireless video, and what do you get? For one thing, costly wireless handsets — still at least partially subsidized by service providers — equipped with the necessary capabilities to support mobile video. For another, expensive network upgrades — or pricey partnerships with purveyors of expensive video-capable networks — that allow them to offer mobile video as a service option to customers who may or may not use it.

As ever, the introduction of network, device and service enhancement is all about cost — both the cost of building in the capability to do it, and the cost of selling it in a profitable way. As this month's cover story explores, various sectors of the wireless community are making significant progress addressing the capability aspects. The next — and arguably even more critical and challenging step — is for wireless service providers to figure out how they're going to position the resulting applications in a way that guarantees them a significant and sustainable revenue uptick.