Skip to main content

Consumers Want Ad-Supported Mobile Video

According to In-Stat's latest assessment, mobile video services have made some big strides lately -- MediaFLO has launched commercially with Verizon Wireless and appears to be headed for Japan.

The DVB-H standard has been selected as the single mobile video standard to be used in the European Union (EU) -- and ultimately a global de facto standard. But, once technology issues have been overcome, In-Stat wonders about the most important part -- whether consumers will actually use the service?

Those who have been in the wireless business for a while will remember that video was expected to be the "killer application" for 3G networks; European consumers would double their monthly spending on 3G networks, infrastructure vendors said, with the biggest increases coming from video. While that hasn't yet come to pass, video has been making some inroads.

Delivery of video to mobile devices requires some compromises, many of which aren't well known outside the industry. In a recent survey of U.S. wireless service subscribers, In-Stat asked about attitudes toward mobile video with and without those compromises. Results, in short, were: "Mobile video is interesting -- unless we have to pay for it."

The In-Stat survey measured interest in four different types of video:

- Video clips delivered over 3G networks.
- Out-of-band video such as that offered by MediaFLO and DVB-H.
- Local video integrated with the local cable outlet (similar to Sprint's Pivot service).
- Free-to-air video, now being considered by U.S. broadcasters, that has no connection to the cellular network or mobile service operators.

The two-part questions first presented each video service as being available at no cost. Respondents who were interested were then presented with some of the compromises (price, handset size, or the need to change carriers), then were asked again about their interest.

Out-of-band video and 3G video suffered the greatest losses with 80 percent or more of respondents saying they were no longer interested once they knew they would be paying $15 per month.

Free-to-air mobile video, which is being proposed but does not yet have a standard technology, fared the best, with one fifth of respondents remaining interested.

Free-to-air mobile video also has the advantage of offering a clearly understood, longstanding business model (or business-as-usual model) for broadcasters, content owners, and advertisers.

Popular posts from this blog

The $150B Race for AI Dominance

Two years after ChatGPT captured the world's imagination, there's a dichotomy in the enterprise artificial intelligence (AI) market. On one side, technology vendors are making unprecedented investments in AI infrastructure and new feature capabilities. On the other, there's measured adoption from customers who carefully weigh the AI costs and proven use case benefits. Artificial Intelligence Market Development The scale of new investment is significant. Cloud vendors alone were expected to invest over $150 billion in capital expenditures in 2024, with AI infrastructure being the primary driver. This massive bet on AI's future is reflected in the rapid growth of AI server revenue. Looking at just two major players - Dell Technologies and HPE - their combined AI server revenue surged from $1.2 billion in Q4 2023 to $4.4 billion in Q3 2024, highlighting the dramatic expansion. Yet despite these investments, the revenue returns remain relatively modest. The latest TBR resea...