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New Opportunity for Mobile Content Providers

The market for mobile TV and video is growing rapidly, but content providers are finding it difficult to finance new projects, according to a new report published by Informa Telecoms and Media in partnership with Peacefulfish.

Informa forecasts worldwide revenues from mobile TV and video services will rise from $2.46 billion in 2006 to $8.35 billion in 2011, but content providers vying for a share of this market face challenges.

"While mobile TV and video content is less expensive to produce than film or broadcast TV content, it still requires upfront production costs that typically run several thousand dollars per minute," says Chris Coffman, senior research analyst at Informa and author of the report. "Revenue shares don't fund the initial creation of content. The mobile TV and video sector would benefit from distributors, such as broadcasters, mobile operators and content aggregators, sharing in more of the risk."

One strategy distributors can adopt is to use revenue models such as minimum guarantees and licensing payments, borrowed from the TV and film industries, which involve upfront payments to producers. The report reveals companies from both the mobile and media industries that are using these techniques.

Content providers are also relying on outside investments from a range of sources, from venture capital firms to public multimedia funds, though the process of connecting investors to projects and companies which need funding is not always a smooth one.

Mobile phones' portability, network connectivity and the personal connection users have with their phones set mobiles apart from TV sets or other consumer electronics devices, and at present, mobile TV and video users prefer to 'snack' on short video clips instead of watching lengthy TV shows. This points to an opportunity for content providers: creating new formats and programs which address the qualities of mobile, and integrating mobile into cross-platform media development.

"Interactive TV and video content that is made specifically for mobile has great potential for creating highly popular formats," says Juliane Schulze, senior partner at Peacefulfish and co-researcher of the report. "This can also open production opportunities for filmmakers experienced in different narrative forms, allowing them to successfully enter a new market segment. Content producers could accept the challenge of financing the development and production of made-for-mobile content, for example by actively involving brands and advertisers in their content creation."

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