There's been a lot of furor over Mobile Video right now, and everyone seems to be running around trying to make sense of how the market is going to organize itself, what's going to be big, what's going to sell, etc... At least in the US, the pieces are falling into place, as the carriers continue to expand the reach of their 3G Networks, and the media companies are lining up to offer prime content to their carrier(s) of choice, occasionally through exclusive offers.
With the buzz and excitement, there's also a lot of skepticism. A lot of pundits out there are skeptical. Just how much free time, they say, will consumers have to watch these videos? Aren't we making a big deal out of something that will remain a niche way of consuming media? It certainly is niche today, with some 3 Million users in the US experimenting with some form of Mobile Video -- probably mostly through offers from Verizon's VCast or Sprint's MobiTV.
According to TDG, only about 31.9% of cell phone users were interested in Mobile Video (This is consistent with Jupiter, which reports that 32% of users would be interested in local weather reports, while other types of video offering, such as Comedy clips and Movie Trailers score about 11% and 9% respectively). Trusting instinct, these statistics are obviously higher when you focus on younger audiences, lead users who have made YouTube and MySpace part of our lexicon. Younger consumers have always introduced new ways to consume media, and this will be no different. As younger consumers grow older, and have more disposable income, would paying for Mobile content become more widely accepted?
I was thinking about the various ways Mobile Video services would probably organize itself several years down the road. What services would the Carriers provide? How would Media companies monetize wireless media content? How would users consume Video content in the Mobile environment?
Here are some ideas about how the archetypes of these business models would be... The first two relate to Content Snacking, which has to do with watching on-the-go short-form videos (3-5 minute videos) widely associated with the Mobile Lifestyle.
(a) Video Clips are purchased online and side-loaded into the mobile device, or purchased completely over-the-air (OTA).
These Video Clips may be taken from existing shows, or could be made-for-mobile Mobisodes. It's hard to justify paying for content in the Online world, where users have gotten used to receiving content for free due to the Web's openness (if I don't want to buy your content, I can just look harder to find something that's free). This is not necessarily true in the mobile world, where the Mobile Internet is still small, and the pipelines are gated by the carriers. Also, because there is no history of free content in the Wireless world, are users more willing to pay for downloadable, bite-sized premium content that will make that 5 minute wait for the bus go faster?
Exclusive made-for-mobile content (Mobisodes) seem to be the most likely candidate for this type of model. As a big "Heroes" fan, I could picture myself downloading side-stories, short documentaries and other related content related to the series, watching them as I'm waiting in line at Starbucks.
There is also a growing market for Video-enabled ringtones, ringbacks and other specific uses of short-form content that consumers will pay for. Most of the a la carte offerings are Music Videos offered by carriers Cingular and MVNO Helio, though the other carriers as well do a combination of subscription and an additional a la carte download fee.
(b) Video Clips can be organized into Channels and offered for subscription
A series of Video clips is streamed into the mobile in 12-15 minute segments (or more). Once enough video clip content is being produced on a daily basis, it makes sense to organize content into larger chunks, to reduce search costs (and risks) from buying one-off Video Clips. These channels could even represent Season Passes for exclusive Mobisode series. Various features can be built in. Carriers could stream videos and cache them in the cell phone to ensure that it contains 4-5 new video clips at any given point in time. Personalization options could be offered in order to "intelligently" upload content that the users would like.
These subscription services will obviously eat into the a la carte Video Clip pie. A number of analysts predict (and I agree) that the a la carte market will plateau as subscription services become more prominent. Verizon's V-Cast is probably the most well-known example of this offering, offered at a per-day or per-month paid service.
Long-form videos would also have similar service models -- a la carte and subscription-based. Watching long-form video, if it does become popular, will likely develop after the market for short-form video is a bit more mature. Handset and network technologies also need to ramp up to be able to meet the demands of long-form. The next three deal with long-form content mobile services:
(c) Individual TV shows or Movies could be purchased online or OTA and side-loaded into the mobile device a la carte.
Everyone is focusing on Video Clip snacking right now, but one could argue that long-form video content will also become more prevalent once consumers get accustomed to watching Video on the phone. It's easy enough to imagine pausing a 60 minute show and watching 10-15 minute segments of it during people's down-times throughout the workday. Shows could also be captured through a home media server (TiVo, SlingBox, Apple TV, ...) for FREE from regular broadcasts, and streamed/side-loaded into my device, but this would likely be offered through a subscription service.
Of course, this service already exists: anyone who has bought a TV show on I-Tunes, sideloaded it into their I-Pod and watched the show on-the-go. I've always used this to "sample" shows I've not seen before, watched the show while flying (which is superior to the laptop experience in Economy class, unless you sit in business class of United's Economy Plus) and bought the DVD if I liked it. I just wished it was more effortless (content could get sideloaded OTA automatically (maybe through a Netflix-like TV show download queue on the phone) and get stored on the phone without passing through my laptop, so I don't have to deal with the hassle of freeing up space or using external hard drives)
Most carriers and MVNOs are starting to offer this for a limited number of channels.
(d) Subscription-based services are permitted to access TV shows or Movies "on-demand"
This type of service would be ideal for cell phone users who are heave entertainment consumers. Long-form video content is streamed into the mobile phone, ideally during off-peak hours. A side-loading model that uses other digital sources would also be possible if these subscription services are extended to those mediums.
The content providers will likely decide how these subscription services are offered. Subscriptions could bundle a number of shows and movies associated with the channel together. Advertising could be included to create added revenue. As with Video Clips, a subscription-based model would eat into the a la carte long-form video service described in (c). Full length shows are offered through Cingular's HBO Mobile on a $4.99/month subscription model.
(e) Terrestrial TV channels can be made viewable on the mobile either free (ad-based) or thru paid subscription.
All the previous models assume an active or semi-active involvement from the consumer. Of course, there is still room for the completely passive, "let's see what's on TV" consumption of mobile video entertainment. Your mobile phone effectively becomes a device that reads whatever is being broadcasted. MobiTV offerings from Cingular and Sprint are offering this, as well as Verizon's V-Cast Mobile TV service through Qualcomm's network.
Perhaps there are other ways Video content would be consumed on the Mobile environment, but I've not been able to think of what they are. Everything I've thought of seems to be variations of the above. These variations would be jockeying for their share of the pie, but they would be more like substitutes rather than complements of each other.
I guess the closest analogy would be to think of what exists today. We've obviously got regular TV, with their slate of new shows and syndicated reruns. We've got DVDs of our favorite shows. Sometimes we rent them (or subscribe via Netflix), sometimes we see them on VOD. We go to YouTube, and even the major CPs are putting short-form clips and skits from shows like Saturday Night Live. Some users have organized their favorite user-generated content into channels, which they update on a regular basis, and it makes finding quality content in YouTube a lot easier.
It's not a hard stretch to imagine that we would be consuming Mobile Video in a similar way once the market and the technology reaches prime time.
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