Just because TV is on cell phones, doesn’t mean people want it…yet

At last year's NATPE Mobile Forum, cell phone content was trumpeted to television producers and marketers as a market with incredible, and perhaps unlimited, potential. Unlike with other mobile devices, this scheme would put entertainment programming immediately, and wirelessly, on the handhelds that 44% of Canadians already own. Yet as TV networks and content aggregators ramped up efforts to get on-the-go product such as downloadable video and live TV available on handhelds in the past year, the entertainment market for the smallest screen hit a speed bump in both Canada and the United States. With investment dollars riding on its success, content providers and carriers are now slowing down, backing up and making sure consumers are along for the ride. Chris Houston, president at Amp'd Canada says carriers on both sides of the border are changing their marketing approach to educate consumers about mobile video possibilities, but he's still surprised by the large segment of people who are shocked that cell phones can be watched like a television. Helio, an American mobile virtual network operator (MVNO), uses the catch phrase "Don't call it a phone" to advertise its Hero handset. Meanwhile in Canada, Rogers Communications Inc. and Telus Corp. are ramping up marketing efforts to highlight live TV network programming. Fred DiBlasio, VP of content and enhanced services at Telus, says promoting the content ont he device rather than phone technology itself speaks to a wider segment of the population. It will, he adds, help drive its adoption as video capabilities start to be built into midrange phones over the next 18 months. Despite the new marketing push, mobile video uptake is proving a little slower than anticipated. The Yankee Group's US Digital Home Entertainment Study showed only 7% of mobile users are interested in subscribing to a mobile service. Seattle's M:Metrics reported that 3G phone owners south of the border were more likely than the current crop of 2.5G owners to fork over an extra US$10 to US$15 per month for added features such as video. Yet the penetration rate for these technologically advanced phones was in the single digits a year after their launch, and has yet to reach mass consumption until early 2008. Here in Canada, it's difficult to pin down adoption rates for the extra services offered with 3G and the newly introduced 3.5G (HSPDA) phones. When these high-tech phones cost about $600 two years ago, Raja Khanna, co-founder and COO at QuickPlay Media, says the top video downloads of sports and "babes" reflected the then-prevalent male, early adopter demographic. Today, popular content is shifting to news and information-based clips thanks in part to video-capable handset prices coming down to about $99 if purchased with a three-year plan. Yet Jeff Leiper, director of consumer research at the Yankee Group's Canadian office, says the number of people who have mobile video/TV subscriptions in Canada is so low that it falls within the margin of error. Khanna admits a wider adoption of new phone technology doesn't mean video usage is widespread. "We're still in the early adopter phase, but we're beyond the hard core early adopter," he says.The challenge is to make video an appealing feature for the average mobile phone user, and Nathan Rosenberg, VP of brand management at Virgin Mobile Canada, says that will take some convincing. "For a while, the mindset has been why would I bother to download a video to my phone when I can just use my PC, which I'm in front of more of the time anyway," he says. When 500 Canadian adults aged 18 and older were asked last May and June what five cell phone services they would purchase if they had additional money to spend each month, only 4% of Yankee Group's respondents indicated mobile video or television would be an attractive option. "What we're seeing is the mobile phone is still very much about communication, voice, email, SMS, personal video and picture messaging, and those purposes are still between users," Leiper says, adding carriers and content aggregators will need to break through this perception in order for mobile video to surge ahead. Rosenberg says many of his young adult target demographic find adding $15 a month for video services just too expensive, especially when they're already paying $40 just for wireless services. Offering a package deal with cheaper or unlimited voice prices may help spur a wider interest in mobile video, as it has done in Japan and in the United States. "The big question we still get from the bulk of consumers is how much are voice rates," he says.

Just because TV is on cell phones, doesn’t mean people want it…yet

News | 01/11/2007 5:00 am EST

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