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Study Predicts Mobile Media Uptake in U.S.

IDC expects about 24 million U.S. cellular subscribers and customers will be paying for some form of TV/video content and services on their mobile devices by 2010, up from about 7 million this year.

This growth presents new revenue opportunities for carriers, handset developers, and content providers. IDC expects mobile commercial video and television content and services to emerge as a key component of U.S. carrier data services if delivered and priced appropriately.

"Although our research found penetration of these services isn't likely to exceed 10 percent of all subscribers by 2010, video/TV services are poised to become a significant contributor to carrier data ARPU while emerging as a hotbed for community-oriented interaction and interesting advertising experiments," says Lewis Ward, research manager in IDC's Wireless and Mobile Communications program. "Broadband adoption of video/TV services is emerging as the cornerstone of growth in this market."

Overall, blended cellular TV video/TV content and service ARPU is expected to settle in at about $6.50. This metric is comprised of three elements: a la carte content purchases, narrowband (i.e. "2.5G") subscriptions, and broadband (i.e. "3G") subscriptions. Within this mix, broadband video/TV services should grow from less than half of all revenues last year to about 85 percent of the total in 2010, with a substantially above average ARPU. Survey data suggest that a mix of on-demand clips and live streaming content is the most appealing to all consumers.

However, uneven operator broadband network deployments, handset limitations, business model complexities, and indirect competition will continue to hamper adoption and growth of these services. Thus, while this market is receiving an amazing amount of interest from media companies and consumer brands, it will likely be several years before the opportunity to leverage mobile video/TV services as an interactive advertising channel will emerge in a profound manner.

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