Mobile Video's Final Frontier

As Internet video becomes synonymous with mobile video, consumers are more willing than ever to watch content on the go. Ask them to fork over cash for it, however, and their tune may change. With multiple successful use cases for unicast, broadcast and even user-generated content on mobile devices, the question is not when mobile video will take off, but how carriers and vendors will make a profit from the coming explosion.

There has long been a debate over the usage model for mobile video — do consumers want to view it in snackable chunks, or will full-length episodes and videos dominate? According to In-Stat, there's room for both. The research firm has been conducting surveys on consumers' attitudes toward mobile video since 2004, but this year — with more handsets, standards and delivery methods — the topic has become more complex. In 2008, 3.8% of consumers are already using a 3G video service — a small number, but a significant rise from 1.1% in 2007. When it came to watching video on YouTube or other fixed Internet Web sites, 54.6% had done so in 2008 versus 41.3% in 2007.

“This is a group of people who are spending a lot on video, and at least half of them have juggled their appointments so they could watch TV,” said David Chamberlain, principal analyst with In-Stat. “That is pretty important. That's a pretty good size sample right there. What I think we've got here is people love their video. They are starting to watch it at more times and in more places. Now you've just got to find a way to hook a business model to a usage model, and that's the final frontier.”

When the industry heard its first rumblings of mobile video, most were looking toward Qualcomm's MediaFLO and other multicast TV platforms to take off, but that hasn't been the case. Now that nearly every feature phone is equipped with a video player, consumers have turned their attention to unicast content. Yet this content — pulled free from the Internet — hasn't proved to be a revenue generator, either. But that could change. MultiMedia Intelligence estimates that the worldwide revenue for mobile TV and video will exceed $15 billion by 2012, based on a combination of direct pay and advertising. Today, direct pay through subscription dominates, but it is not attracting a large user base — a necessary criterion for advertisers to want in.