Mobile Video: Will Consumers Bite?

Buzz continues to grow around the prospect of watching television, movies and other valuable video programming on mobile phones and personal handheld devices, but it is still too soon to tell whether a solid marketplace will emerge for these services, considering the small screen size, bandwidth needs and likely costs involved.

Although no one really knows exactly how, when and if mobile video will take off, hopeful firms consistently roll out news on the subject -- like UK wireless firm O2, which this week announced plans to kick off customer trials.

Hopeful Players

O2 claimed there is a "clear consumer demand" for mobile TV, based on its trial with Nokia smartphones that enabled customers to watch more than 15 TV channels -- including BBC, Cartoon Network and Sky News -- on their handsets.

Eight of 10 customers participating in the trial were satisfied with the service, O2 said, and three-fourths of them -- particularly commuters -- indicated they would like to continue the service.

In the midst of its acquisition by Telefonica, O2 would want to paint a positive picture of the market, Yankee Group senior analyst Mike Goodman pointed out. The key to demand lies in what is on the screen -- whatever size it is, he maintained.

"I don't think there's anyone out there saying, 'I want my mobile TV,' because you don't buy technology," he told TechNewsWorld. "I don't think there's a huge market, initially. Like anything, it's going to be driven by content."

Cost and Content

The cost of mobile video may partly explain why services such as Verizon's V-Cast have been a disappointment, Goodman suggested.

The content has been "lackluster," in his view. Content owners, such as TV networks and movie studios, are the real drivers of successful video to go, he said.

Shorter bursts of video -- including music videos and movie clips -- may draw the interest of some mobile users, but consumers may be unwilling to pay for limited offerings.

"It's still a drop in the bucket of what's available," Goodman said. "It's so limited across the board. We're still in the very early infancy [of the industry]."

Stay Tuned

Apple (Nasdaq: AAPL) was successful with its rollout of iTunes and iPod video, largely because the company partnered with ABC, NBC and other content holders, according to Jupiter Research vice president Michael Gartenberg.

"The challenge is to provide good and legal content in places consumers want it," he said.

There is clearly a market for mobile video, but how much consumers are willing to pay for it remains largely unknown, Gartenberg told TechNewsWorld.

For now, the available content just isn't enough, he said. The vehicles for mobile video content, however, are abundant.

"From [the providers'] perspective, they have the phone, the PDA, the PC -- all of which are places for mobile video. It will be interesting to see what happens," he said.