LAS VEGAS – Yes, said a number of wireless leaders during sessions this morning on delivering video to mobile devices like iPods and wireless phones at the National Association of Broadcasters convention.
The "yes" sure wasn’t whole-hearted though. There were many caveats to that sentiment. We have conflicting wireless video standards, content formatting issues, huge digital rights management negotiations to come, to say nothing of the enormous job ahead of educating the consumer on how to find and watch video on their phones.
But, let’s start with the positives. "I think it will develop much faster than any of us think," said Robin Chan, director of network programming at U.S. telco Verizon. He noted that every six months, Verizon cycles through fully a third of its customers’ handsets, meaning that a third of its customers are upgrading their mobiles every half-year.
And those new phones they’re buying are video-capable, so the ability for growth in the market grows by the day.
"Seventy percent of the handsets in the market will be replaced in less than two years," echoed HBO’s chief technology officer Bob Zitter. "If video does take off with consumers, it will be a very fast ramp-up," because consumers have the video devices already in hand – even if they’re not using that functionality yet.
"We are seeing how and what resonates with consumers – in terms of programming types and business model types," added Zitter.
Director of video products at NMS (a wireless application company which has been in the mobile video market in Japan for years), Mike Katz, pointed beyond the North American borders for cues as to how the market will evolve. NTT DoCoMo, for example, has offered video since 2000.
Their revenue, said Katz, is "strong", with the company saying up to 20% of its wireless revenue comes from video.
He cautioned, however, since this is a broadcasters convention, not to think of all that revenue coming from TV-like programming. In fact, only about 2% comes from mobile TV. The rest of the video revenue comes from other applications, especially from a popular point-to-point (phone to phone) video conferencing service.
"There are multiple (video) applications," he said.
Global weather services company WNI Network, which supplies weather news and information around the globe – especially on wireless phones – has an aggressive view of where the mobile video market will go. Its new media VP, Daniel Scalisi, figured there will be 36 million mobile video devices in the U.S. market by 2009, pulling in revenue north of US$500 million (it’s in the $10- to $20-million range now). "We expect it to grow rapidly," he said.
That’s a bit too aggressive a stance, added some of the other panelists. Nokia’s Bob Shallow, head of music and rich media for the handset maker, said only about 1% of the world’s mobile phones can receive a video broadcast. But he, too, was bullish, saying by 2010 that number will be 10% and by 2012, "there will be more TV tuners in mobile phones than in any other single device," he explained.
Scalisi added that he was thinking not just of broadcast, but of user-created content and video on demand.
All this sounds pretty great, added HBO’s Zitter, but there are a whole host of technical issues to be sorted out and a lot of work to be done on digital rights management. Since, there is no wireless technical standards body, "each distributor does things a little differently," he said, leading to extra costs from a programmer standpoint who have to provide different video formats to the many different carriers.
"We don’t want to make 100 versions of the same program," added Zitter. Plus, HBO is struggling with the content itself. Most of the pay channel’s programming is filmed for wide-screen display and squashing that down to a tiny screen isn’t easy and is often ineffective. He pointed to an HBO episode of Deadwood, where during a campfire scene, all that could be seen on a cell phone screen was a single, tiny, dot of light.
Zitter also sounded alarms on the wireless carriers’ roaming deals they’ve signed amongst themselves so that everyone’s cell phone works everywhere else, no matter where customers travel. This is a problem with video content. "Roaming does not work for content owners who own rights on a geographic basis," he added.
None of the panelists knew what in the world a mass audience will eventually want to watch on their mobiles. NBC offers the Tonight Show’s monologue on iTunes, and ABC offers full episodes of popular shows. But, short, funny or informative clips have also gained traction. Short news hits, said NBC Mobile VP wireless Salil Dalvi, has been a great driver. NBC has been producing video content specifically for the mobile market since 2003.
During the aftermath of Hurricane Katrina, traffic to NBC’s mobile news doubled – "and stayed that way for two weeks," he said. "Customers don’t live their lives around the TV any more." NBC Mobile has over 1.5 million subscribers.
Verizon’s Chan said that people apply the same standard to mobile video as any other type. If it’s good, they’ll watch. "We have had some test cases where 17 to 20 minute clips have seen rapid consumption. We’re testing well with an hour’s worth of content… it’s really about the consumer’s appetite and the quality of content."
Zitter added that HBO is experimenting with chapter marking – a-la DVDs – to make it easier for wireless users to navigate within long-form content to get to specific parts they want to see.
This all seems to make mobile, not a broadcast device like a cable set top box, but "a great one to one device," added WNI’s Scalisi. "We think on demand video will work best.
Finally, though, work is needed on the user interface, added NBC’s Dalvi. Accessing video needs to be as easy as hitting the "talk" button on the phone. Most users, he said, simply don’t know where to find video – or haven’t been able to locate it, no matter what buttons they press. "What if it took five clicks to open the fridge," he said.
Then, slamming the wireless payment plans, Dalvi added: "What if (ISPs) offered four different pricing plans for e-mail." These are the obstacles, from NBC’s point of view, which limit mobile video’s success right now. "it has to be as simple and satisfying" as placing a phone call, he added.
Surf back to www.cartt.ca throughout the week for more from NAB.
