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Drew Hull, Research Director for Mobile Content at The NPD Group, has written this article about mobile video, coming to the conclusion that mobile carriers will be the main players in the mobile video/TV industry. He covers the major players in the US and where he expects the market to head in the next few years.
The mobile video market generates a tremendous amount of excitement, hype and promise of things to come. With everybody’s eye on the future, however, it’s easy to forget that this business is a reality today. Though accounting for less than one percent penetration of US wireless subscribers, several key players have begun to entice customers into actually using these types of services.
Still in its infancy, the mobile video market is already fragmented, with regard to the many competing delivery options, and myriad viewing, pricing and content offerings; yet the market is poised for rapid evolution over the next few years, due primarily to advancements in technology and content availability.
Today’s Mobile Video Landscape
A few key players lead today’s mobile video market in the U.S. But they are all taking different approaches to achieve their ends.
Apple threw its hat in the mobile video ring in October 2005 with the launch of the Video iPod. They offer consumers the ability to purchase, download and play music videos — and a limited number of TV shows and short films — for $1.99 each through iTunes. In addition, TiVo will support the transfer of recorded programming to the Video iPod and Sony PSP, allowing consumers with a TiVo box to record, transfer and watch the entire world of cable programming on their devices. Due to the lack of device connectivity, videos must first be downloaded to a PC and then transferred to the Video iPod through a cable. While Apple is currently the only company to provide a turnkey system for content purchasing, downloading, and playback, other device manufacturers are sure to follow with similar solutions. Sony’s PSP, for example, is well positioned to offer an end-to-end solution with enhanced connectivity using Wi-Fi.
Idetic provides technology to deliver video over a 2.5G network as well as aggregating video content. Their flagship product, MobiTV, is a Java application that streams live broadcast TV at approximately two to three frames per second (fps) directly to wireless handsets – and all for $9.99 per month. MobiTV offers an impressive collection of major TV channels, including MSNBC, ABC News, CNN, Fox Sports, ESPN 3G, The Weather Channel, Discovery, and TLC. Today, it is only available to Sprint, Cingular and Midwest Wireless customers in the U.S.
As the first US carrier to offer MobiTV, Sprint led the way into the mobile video frontier. The launch of its Sprint TV service soon followed in August 2004. Sprint’s service is a mix of streaming video clips, continuous loop programming and live broadcast TV over both 1xRTT and EV-DO networks. Sprint customers can purchase the Sprint TV channel bundled with a data plan for $25 per month or purchase Sprint TV and about 30 other channels a la carte for prices ranging from $3.95 to $9.95 per month for unlimited access. Sprint’s content lineup includes CNN, The Weather Channel, Fox Sports, E!, Cartoon Network, Sirius Music, Rhapsody Radio and Music Choice, Fun Little Movies, Varsity Mobile and Pure Phat.
Verizon’s VCAST offers a mix of clip-based streaming and download-and-play video content over the EV-DO network. For $15 per month, customers get unlimited access to the basic video clips and can purchase additional clips to download and play anytime. While VCAST doesn’t offer as many channels as Sprint’s service, it does include the such well-known names as NBC, Market Watch, The Weather Channel, E!, Comedy Central, Nickelodeon, Fox Sports, ESPN and Nascar to Go, as well as a catalog of music videos and movie trailers.
Major Changes on the Horizon
Two major advancements will change the face of the mobile video market. First we can expect a major shift in mobile video delivery technology: DVB-H and MediaFLO will change today’s one-to-one delivery technology to one-to-many, or multicasting. This advancement in technology will drive a significant reduction in the cost to deliver video content to mobile phones – both in terms of network capital expenditures and operating expenses. In addition, multicasting should allow for a much more compelling user experience by improving frame rates, electronic program guides (EPGs) and faster channel changes.
The second advancement is the steady increase in the volume of content available for mobile video. Cable operators are already getting involved in the wireless industry, and as these partnerships develop, the entire world of cable programming will eventually be available for viewing through mobile phones. Media companies will also become more sophisticated in optimizing this video content and creating original programming for mobile devices.
Shifting from Market Trials to Legitimate Businesses
Given where there industry stands today – and squinting at changes on the horizon – we can expect to see many changes in the market, as follows:
- There will be more clarity between the different segments within the market;
- Network connectivity will be the prerequisite for “mobile video”, while the solutions that lack connectivity will be defined as “portable video”;
- Apple and other device manufacturers will find their niche in the portable video market; and,
- Consumers will use these services similar to how they currently purchase and watch DVDs in their homes.
Finally, the economic benefits of multicasting technology will allow carriers to offer pricing models that the mass market will be willing to adopt, and their network connectivity will allow them to deliver content to consumers when they want it. This improved connectivity, combined with the advancements in technology, will allow carriers to fulfill the consumer demand for live TV programming on their mobile phones. For all of these reasons, wireless carriers are best positioned to drive the large majority of usage and revenue in the mobile video market of tomorrow.
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