It will be years before the hype generated by cellphone TV and other mobile video will be matched by its financial payoff. But the biggest mistake media companies could make is hesitating until the market fully develops.
That’s the consensus of industry executives speaking at Natpemobile, a mini-conference held in Las Vegas Monday in advance of the NATPE programming convention there.
The conference featured a mix of executives from major media players, technology companies, and small programmers trying to aggregate content from both large and small players.
One revelation is that there is immediate revenue involved.
Verizon Wireless has coaxed 700,000 subscribers to pay $15 monthly for its VCast service. MobiTV -- a syndicator packaging primarily cable networks for cellphones -- has secured more than 500,000 customers paying $10 a month. That's not massive, but it is equivalent to a top-20 cable operator. Carriers are generally splitting revenue 50-50 with programmers or syndicators like MobiTV or GoTV. Syndicators then split their take with the programmer.
Programmers emphasize that cellphone TV helps extend both their networks' brands and their business. But it's not easy for programmers to transport the TV experience to other platforms.
Ross Levinson, president of Fox Interactive Media, says that rights issues make life complicated for even major players. The immediacy of sports makes Fox Sports an eager player for wireless. Fox broadcast and cable networks license professional baseball, football and basketball games, but they can't actually deliver those games to cellphones. The leagues reserve the rights and, in the case of the NFL, have sold them to Sprint Nextel.
"At times we find ourselves at odds with the leagues.," says Levinson. "You'd think if we were spending a couple of billion dollars on NFL rights we'd be able to increase our reach." But with the separation, "it's a real challenge for us to build an integrated business."
The executives say that an advertising market will eventually develop as audiences get bigger. Screen size, battery life and the nature of mobility means that short-form video is dominating the game right now.
Advertising "clearly won't be traditional," Levinson says. "I don’t think you can serve a 30-second ad in front of a 30-second clip."
Banners and logos are one opportunity. Another would be sending text messages triggered by viewing a clip.
Levinson recently spent two days meeting with Madison Avenue agencies. "They're dying to get integrated in the new mobile devices," he says.
One major snag is the often painful user experience.
Paging through on-screen menus to find a clip or channel, then connecting to the network, can be terribly slow. Call it the agony of "content discovery."
Raja Khanna, co-founder of QuickPlay Media, calls that a "huge problem." Cellphone TV's focus on short digestible clips makes the process especially frustrating.
"After seven minutes of content discovery, I'd almost rather watch a long thing," Khanna said. "There's more of a payoff."