Why Mobile Video Should Be Free

Mobile video has been getting a hyped run lately — which includes those determined to run counter to the hype, of course — and the biggest debate is not over whether mobile video/TV will be successful but what the business model will be. Steve Smith at Mobile Insider makes an excellent argument that “free” is the only way mobile video will take off, because that’s how people are used to consuming video. He argues people don’t view cable fees as being charged for content, but for access — my first instinct was to disagree, but on reflection I agree with him. I’d be willing to pay for mobile video, but not $5 per channel (to use an example from Sprint). Carriers have the ability to make micro-payments, but that doesn’t mean people will pay them — and carriers are used to charging incrementally, but people view telecommunications differently to media. This is backed up with the example of Rhythm, which signed up a quarter of 3UK’s customer base (1 million viewers) to its mobile video service, which is ad-supported and free…even data charges are covered.

Rhythm explained why it thinks mobile video is so good: “Frequency capping is another strength of mobile, he argues, because TV buys tend to carpet-bomb viewers for effectiveness, and as mobile presents a total share of voice in an uncluttered environment where people are actively looking for video. And of course, there is no DVR-effect on mobile. You can’t fast-forward past an ad, and unlike the Web, there is no room to do what I usually do during pre-rolls, click away to another open window or do an email check until the pitch is over. Kohli says that as a result of all these advantages over TV and even the Web, “our CPMs average five times television and more than two and a half times the Internet, and with a much smaller screen.” Naturally, the number of actual viewers is important, but at the moment those arguments for mobile ads being more effective per ad seem to add up.

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