A webinar put on this morning by BIA Financial Network (The Kelsey Group’s new owner) delved into the main trends that are lining up to make mobile TV a reality.
One enabling factor, for example, has been the growth of mobile broadband such as 3G networks. This is analogous to the broadband penetration that has made online video explode, and to the next generation fiber networks that will bring us IPTV.
“Bandwidth has changed things quite a bit in mobile telephony,” said BIAfn Chief Strategy Officer Rick Ducey. “Television is becoming a wireless medium for the first time.”
Building a Model
Parallel pushes are happening in mobile with better smartphone penetration and device standards (i.e., iPhone) and higher consumer comfort levels — all of which are bringing mobile video closer to reality. Following behind these trends will need to be broadcaster and advertiser adoption.
“The technology infrastructure is in place,” said Ducey. “Business models are aligning and the possibilities for growth in mobile marketing are there.”
BIAfn forecast the opportunity to be $2 billion in annual revenues, based on delivering content to the incremental eyeballs that will view mobile video content. This consists of $900 million for TV networks and syndicators, and the remaining $1.1 billion for local broadcasters.
So far we’ve seen mobile television manifest largely in the content offerings of major carriers such as Verizon’s V Cast and Sprint TV. These have programming arrangements directly with content networks like Fox Sports and CNN — deals that have been necessary to bring this content to market.
But going forward, an interesting dynamic will be led by the Open Mobile Video Coalition, which consists of 800 television stations forming common standards to deliver direct video feeds to not only cellphones but also laptops, portable media devices and in-car systems (projected to be the largest source of nodes among these). The move to digital broadcast standards will enable all this.
“Mobile can be the third leg of a stool in the digital proposition for broadcasters,” said OMVC Executive Director Anne Schelle.
Good Things Come in Threes
Overall, the opportunity comes down to the three-screen strategy we’re hearing more and more about from the likes of AT&T. A continuity of services has the appeal to attract and retain users while creating unique revenue opportunities for carriers that broaden their “ownership” of the network.
“If everything is Internet based, and that’s the way it’s starting to be, can’t we get one subscription across television, mobile and Internet?” posed Ducey. “The technology is there and what’s being developed are the business models and implementation to bring it to the marketplace.”
There will be lots of moving parts such as subscriber revenues and ad support, involving a host of ad networks like AdMob. Another opportunity on the local level will involve the growth expected in mobile local search and location-based services, as we’ve examined and as supported by recent eMarketer data.
But for mobile TV and its opportunity for broadcasters, a key point is that carriers will partner rather than build to obtain the content and distribution channels they need. Their longstanding closed networks have been eroded to some degree by mobile search technologies and the partnerships we’ve seen with the likes of Google (Android) and Apple (iPhone).
A similar dynamic will occur with the development of mobile TV delivery platforms, opening lots of opportunity for broadcasters, and media companies with existing video content and distribution assets.