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Mobile video profits will follow wise wireless operator promotion

Mobile video is the gold ring wireless operators want to grab, but fewer than half of all video-capable mobile phone users have ever seen it. Operators need to promote it wisely if they want to see the money.

In the saturated U.S. market, where the number of new mobile subscribers is leveling off, wireless service providers are looking for new sources of revenue, and video could be the solution. But there's a catch. According to a recent Parks Associates study, 56% of video-capable cell phone users have never used the service for mobile video.

...56 percent of video-capable cell phone users have never used the service for mobile video.

Parks Associates
So to make it work, the wireless industry must promote it successfully.

"The largest reason we find [that people aren't watching mobile video] is that the notion of watching video is incompatible with most people's traditional mobile use," said Tom Nolle, president of CIMI Corp., a telecommunications consulting firm.

The key to promotion is in the demographics, according to Nolle. He splits video-capable phone users into two categories: the empowered and the unempowered. The empowered include business professionals who need smartphones for remote access to their email, calendars and intranet; the unempowered include teenagers who are interested in the latest technology.

The unempowered, from Nolle's perspective, engage in what he calls "supervision avoidance," meaning they enjoy socializing with their peers without parental intervention. It is precisely this demographic that mobile video developers should target, he believes. "[But] if you're socially unempowered, the problem you'll run into is that watching video on a small screen is an anti-social activity."

Mobile video checklist
  • Identify viewer target market
  • Offer immediate and familiar content
  • Partner to create a better user experience
  • Develop pricing strategy that allows customers to test the waters

Therein lies the problem: The socially empowered don't have enough time to watch mobile video, while the unempowered are more inclined to be in social situations than watch videos on their phones, which is an individual experience.

"The wildcard of mobile video is the social networks," Nolle said. "If they can find a way to create a social experience around video, that would create more market penetration."

For mobile providers trying to reach out to the socially empowered, sports are the common denominator. "Sports broadcasts are probably the No. 1 opportunity for mobile video, in that if you aren't somewhere that you can watch it live, then mobile live makes more sense," Nolle said. "If you're going to try to promote on the basis of material, you've got to work on the things where there is an immediate value to watching it mobile."

Content for the empowered

This realization has not escaped mobile operators. Sprint Nextel offers NFL Mobile Live, which allows customers to watch, and listen to, streaming feeds of NFL games. The goal of the service is not to leave fans glued to their cell phones; it's to give users the opportunity to check in with their favorite teams wherever they are.

"We don't expect people to sit around and watch a full NFL broadcast on their phone," said Dave Mellin, PR manager at Sprint Nextel. "But, for people who are out and about, it's a great way for them to be able to follow games. Whether they decide to consume it in bits and pieces or in lengthy chunks, the content is there."

Aside from sports, the daily news could provide another inroad for mobile providers. "You're never going to watch Batman for the first time on your phone. There are some things you just want to experience in the theater," said John Barrett, a Parks Associates researcher. "The weather forecast, on the other hand, you might watch that on your phone because the forecast doesn't matter tomorrow and the screen quality doesn't matter; you just want to know if it's going to rain."

Barrett also contends that familiar video clips are more appealing content created specifically for mobile viewing. "People want familiar content," he said. "They don't want the Today Show Mobile, they want the Today show. They want to see the same people doing the same things they've done before. People say the camera angles don't work for mobile TV or that the camera pans too much, but all of that is outweighed by familiarity."

Free video now = profit later?

Even when content is available, however, mobile providers are tasked with making video profitable. "The issue for the operator is not so much how do I promote this, but how do I identify a promotion strategy that's profitable for me," Nolle said, adding that it's important to create a pricing strategy that allows consumers to test the waters rather than creating a barrier of adoption for new users.

To do this, telecom companies need to make mobile video attractive. "There's got to be something done to raise the perceived value of video," Nolle said. "There's less of a barrier to adopting something if it doesn't cost you anything. The only way that they'll be able to jump-start this on their own is if they make a certain amount of video available at no charge, then make other content available for an incidental fee, rather than subscription."

Sprint Nextel has had success in bundling video content with its data package, however, charging a flat rate for access to NFL Mobile Live and other mobile content. "It continues to be an important thing that we offer, and our subscribers not only ask for it, but they use it," Mellin said, adding that Sprint Nextel is offering full-game broadcasts this year and is expecting people to watch them.

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