Getting Ready for Primetime: 2006 Mobile Video Year in Review

CBS Sportsline took a different approach than ESPN. It launched a series of specific applications users can download to their cell phones, requiring far less investment than launching an MVNO. For example, Verizon partnered with CBS Sportsline to offer the CBS Sportsline Fantasy Football Companion, a mobile version of the site’s web-based fantasy football game, for $4.99 per month. It’s obviously a valuable tool for sports-obsessed fans managing their fantasy teams from wherever they happen to be.

Social Networking On the Go
Many also attribute consumers’ lack of enthusiasm for mobile video to the fact that it isn’t a shared experience like television or even the web. "I think an interesting trend to watch is not the broadcast distribution model, but more of a bi-directional communication between a publisher and a participant," says Cunningham. For example, Verizon started organizing moderated chats between Boston Red Sox fans and the dugout at Fenway in April. Kangaroo Media, developer of mobile TV technology, signed a six-year agreement to provide fans at all Formula One races with access to live race video, audio, and data through the company’s handheld devices.

By far the biggest news in terms of mobile video and social networking is Verizon’s partnership with YouTube. V Cast subscribers will be able to access a selection of the most popular videos on YouTube. "Most times it’s not about seeking out YouTube-like video, but rather it’s about finding video in your local community and social network," says Johansson. YouTube understands this as well. They introduced a new feature to let users upload videos directly from their cell phones and PDAs to the site, using any carrier. According to Telephia, 8 million Americans are using their cell phones to capture video.

Mobile Video Advertising Realities
"Mobile video will eventually be big, but I don’t think that is the low-hanging fruit for mobile right now," says Gene Keenan. According to the Yankee Group, 7% of revenue for wireless carriers in 2005 came from entertainment-related services. Even in Japan where mobile video is more widely adopted, profits have been elusive.

Matt Crowley, senior product manager of multimedia at Palm, believes traditional broadcast ad models will be carried over to mobile video in the near term: "Ads will just be like radio and TV. Those models are so ingrained in everyone’s head."

Small audiences and a lack of standards for measurement are key challenges facing broadcast ad models on mobile devices. The Cable Television Ad Bureau released a study showing mobile users would tolerate a nine-second ad compared with their 42-second attention span for TV advertising. Nielsen announced in 2006 that it will expand its ratings system to web and mobile devices called "Anytime Anywhere Media Measurement" or A2/M2. They plan on launching it in all local markets by 2011.

There is strong evidence that consumers welcome ad-supported models if it means access to "free" content. According to the Yankee Group, 40% of 18- to 35-year-olds say they are open to mobile advertising if it subsidized their content options. "Over the next six months you are going to see more and more ad-supported services for wireless," says Johansson. MSNBC is partnering with Action Engine to launch an ad-supported mobile news service, so users can experience MSNBC.com without incurring another subscription fee.

There is also a growing debate about how much, if any, demographic information carriers should share with advertisers. Sprint launched a new targeted mobile advertising service this past fall. They are delivering targeted ads on the mobile web based on age, gender, and past spending behavior. None of the demographic information is shared with advertisers. Carriers want to protect their customers’ privacy, but advertisers argue that more demographic information helps them better target their ads, making them feel less intrusive to the user.

What to Expect in 2007
Many of the trends that shaped mobile video in 2006—like the morphing of devices, experimentation with subscription and ad models, and made-for-mobile programming—will be amplified in 2007.

By far one of the most anticipated announcements in 2007 is the launch of Apple’s "iPhone." "Apple has the opportunity to change everything, the same way that iTunes did," says Wiltgen.