Thursday, September 22, 2005

Now, the Very Small Screen

The Wall Street Journal (subscription required) writes about the potential market for TV via the cell phone as U.S. carriers spend billions to build out their 3G networks. The article cites mobile TV efforts in Asia and Europe and asks whether it will take hold in the U.S. where "users here have been slow to adopt other wireless services that are popular elsewhere, such as text messaging, ringtone downloading and Web surfing."

The article states Sprint Nextel had the highest data service revenue among all U.S. wireless carriers at $6 per month per user, which is much lower than $16 a user at NTT Docomo during the same period.

According to Yankee Group, there are an estimated "half a million cellular-TV and video-service subscribers in the U.S. now" and "could reach 1.3 million by year end and 10.8 million by 2008." Yankee also forecasted that "revenue from these services could exceed $750 million in 2008, up from roughly $16 million in 2004."

Linda Barrabee at Yankee Group said, "It's an exciting proposition. Carriers and service providers see an offering that not only enhances ARPU [average revenue per user], but also builds loyalty." She added that for "broadcasters and video-content owners, it opens a new market for their products not covered by existing licensing agreements, while for advertisers, it provides a channel into hard-to-reach audience."

The article looks at the various efforts taking place among the U.S carriers and some of the challenges regarding cost, content and quality.