It’s a phone, not a TV

With the announcements of the video iPod and EchoStar’s PocketDish, there’s been more attention on mobile video in the past week than ever before. The mobile phone carriers should be disappointed. They’ve been in this space for some time with very little to show for it.

From the NY Times Oct. 17, 2005, “Now Playing on a Tiny Screen”

Ms. Barrabee [Yankee Group analyst] places the number of mobile video viewers at about 500,000 in the United States, a tiny number given that there are 193.6 million mobile phone subscribers. To watch video now, consumers must own a phone with video capabilities and pay a service fee to receive broadcasts. A Yankee Group survey found that only 1 percent of those who subscribe to video service on their cellphones watch it monthly.

Those aren’t very encouraging numbers. Since MobiTV claims 300,000 subscribers, that leaves 200,000 for the superior V Cast service from Verizon. Of course superiority to MobiTV doesn’t mean much. It’s like how a Packard was superior to an Edsel.

What should really scare the carriers is the 1% number. A customer lays out a couple of hundred bucks more for a video capable phone, pays $15 or so per month for a video service, then ignores it. How long before the 99% who don’t even check in once a month decide to spend their $15 elsewhere? What do the carriers think that these subscribers are telling their friends about mobile video?

By December 26, just about six weeks after its announcement, video iPods will significantly outnumber mobile video phones in the US. The demographic likely to watch mobile video is the iPod demographic. So carriers need to be creative in crafting mobile video offerings if they are to stay in the video game. Where does this put media companies like Fox?

Fox has been creating “mobisodes” based on its 24 series and made them available for $0.99 to mobile phone users. According to the same NY Times article Fox says it’s spent $500,000 for these mobisodes. To break even Fox has to sell 500,000 of these things, but mobile phone video only provides a potential total market of 500,000. Many would argue that these mobisodes should not be viewed as a profit center. They are a promotional tool for the broadcast version 24. That sounds plausible, until you hear what folks at Fox have to say about it in the same article:

“24: Conspiracy” did not feature “24’s” cast or story line. Instead, Fox hired nonunion actors to keep the cost for the serial under $500,000. “With television, one of the things you have to deal with is the guild and union issues, and we said, ‘Go ahead and do this nonunion and on the cheap,’ ” said Joel Surnow, a producer of “24.” “It is not a ’24’ thing.”Mr. Surnow said he was not concerned that the mobisodes might hurt the “24” brand name. “In a minute, how bad could it be?” he said.

So if it can’t hurt the real 24, how can it help? If these mobisodes can’t fly on their own there’s no point in making them. Why not offer them through iTunes? It’s a bigger market with a better demographic for Fox. When the video content providers jump, where will it leave the carriers’ mobile video offerings?

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