Mobile TV, video poised for continued growth: Survey

By Dan Butcher

March 10, 2009

Bell white-labeled QuickPlay's mobile video platform

An independent study found significant interest in mobile TV and video, with 78 percent of U.S. respondents predicting an increase in usage by 2010.

Mobile television and video service provider QuickPlay Media has released the results of its second-annual independent Market Tools survey focused on mobile TV and video consumption in the United States. The online survey of approximately 1,000 U.S.-based mobile subscribers between the ages of 18 and 35 reveals some new insights into the evolving viewing habits and preferences of today's consumer.

"There are several factors which have helped to drive the growth of mobile TV and video in the U.S. -- the first is the arrival of multimedia-enabled phones such as the iPhone and the Blackberry Storm," said Tina Kaichis, director of marketing communications and channel marketing for QuickPlay Media, Toronto, Ontario, Canada.

"The innovations in these devices and the marketing efforts around them both have played an integral role in helping create a heightened awareness of mobile TV and video solutions," she said.

In fact, according to the recent survey of U.S. mobile subscribers, nearly half -- 46 percent -- of respondents are aware that their carrier offers a mobile TV and/or video service, a clear improvement from the 35 percent level of awareness that was reported in 2008.

Making QuickPlay of video

"Over the past year, the amount of quality content being offered by wireless carriers has also grown considerably, as has their commitment to adding features that help customers navigate growing content libraries and find those items of interest," Ms. Kaichis said.

"Many of our customers have also taken great strides in lowering the barriers of adoption by offering free content previews and trial offers to enable their customers to experience mobile TV and video at no risk," she said.

"Carriers have also rolled out more innovative pricing options that connect consumers with high-interest premium content."

Looking forward, there are still some barriers to mobile TV and video adoption, the most obvious of which is perceived cost.

"While the survey shows that customers are clearly willing to pay to watch content on their mobile device and we have seen first-hand that carriers have introduced attractive pricing options, there is still a lack of awareness among consumers regarding their choices," Ms. Kaichis said.

"In addition, there are still a large percentage of consumers that are unaware of whether their carrier even offers such a service," she said. "In each instance, wireless carriers will need to continue educating their customers on the real facts of their offerings."

The 2009 independent Market Tools survey shows that consumers are confident in the uptake of mobile TV and video, with 78 percent expecting an increase in usage by 2010.

Additionally, the number of people watching TV and video content on their mobile device has remained steady from 2008 to 2009 at 35 percent.

For those who have not tried a mobile TV and video service, perceived cost continues to represent the biggest barrier to adoption, with 58 percent indicating that it is the number-one reason they have not viewed TV and video on their mobile phone.

Looking ahead, the survey revealed a significant level of interest in mobile TV and video and that overall awareness is on the rise.

Fifty-five percent of respondents stated they are interested in mobile TV and video.

Nearly half -- 46 percent -- of respondents are aware that their carrier offers a mobile TV and/or video service, a clear improvement from the 35 percent seen in the 2008 survey.

This change provides a strong indication that video services are benefiting from the extensive marketing efforts around multimedia-enabled devices such as the iPhone and Blackberry Storm.

These results corroborate other recent research from IDC and Nielsen, both of which provide strong indications that the mobile TV and video industry is gaining momentum.

In 2008, various QuickPlay Media customers introduced pricing options designed to connect consumers with high-interest premium content and increased their marketing efforts around mobile TV and video.

Looking ahead, QuickPlay expects wireless carriers to continue on this path as they work to realize the revenue potential of mobile TV and video services.

The survey further delves into the role that multimedia-enabled phones will play in the growing adoption of mobile TV and video services.

Specifically, the results found that while slightly less than a quarter of consumers are using a multimedia-enabled phone -- 24 percent -- these devices will play a critical role in enticing consumers to watch TV and video on their mobile phone.

Thirty-eight percent said that if they were considering changing wireless carriers, their ability to offer the latest multimedia-enabled PDA/smartphone would impact their decision to choose that carrier.

Forty-one percent of respondents said that they would be more likely to watch TV and videos on their phone if they owned a multi-media-enabled PDA/smartphone.

This point was corroborated in a May 2008 IDC report, which stated that mobile TV/video adoption is most common among converged mobile device owners, who exhibited a penetration rate of 16.9 percent, compared to the 4.7 percent overall mobile TV/video penetration rate.

The survey also found that improvements to mobile phone plans could stimulate adoption.

"Unlimited-use data plans are in the neighborhood of 20 percent on penetration for mobile subribers/customers at this point in the U.S.," said Lewis Ward, research manager for IDC.

Currently, most consumers have monthly voice and data plans which have the opportunity to gain even greater adoption, with 48 percent stating they would be more likely to subscribe to such a plan if a set amount of basic video content was included in the package, such as free comedy clips or movie trailers.

"Our survey shows that 49 percent of consumers have monthly voice and data plans right now, significantly more than the 38 percent that have voice-only plans." Ms. Kaichis said. "The survey goes on to show that this number could go higher with 48 percent saying they would be more likely to subscribe to a voice and data plan if a set amount of basic video content was included in the package.

"What this tells us is that data plans have even greater adoption potential and that mobile TV and video will play an important role," she said.

The survey also found that customers paying for content remains the dominant model, with the majority -- 72 percent -- of those currently viewing mobile TV and video content indicating that they are paying for it.

This finding is consistent with research from IDC, which predicts that in 2009, paying viewers will make up 80 percent of all mobile TV/video consumers.

Lastly, the survey found that consumers are also willing to tap into alternative ad-supported models in exchange for free access to mobile TV and video content.

Forty-nine percent of respondents have a monthly voice and data plan through their wireless carrier, versus 38 percent who currently use a monthly voice-only plan.

Fifty-one percent said that they would be willing to accept advertising in return for free TV and video content, versus 54 percent in 2008.

Video viewing habits have also seen a noticeable shift in terms of where consumers are watching mobile content.

Most notably, 30 percent of consumers are watching TV and video on their mobile device when at home, versus 11 percent in 2008.

This trend demonstrates that the mobile phone is beginning to gain status alongside other in-home options such as the television and the computer.

Consumers also continue to show a preference for snacking on content, instead of setting aside dedicated viewing times.

Twenty-five percent of respondents view content in between daily activities, 16 percent while in transit on a bus or train and 11 percent while waiting in line.

Two-thirds -- 66 percent -- said they would consider the ability to pause and resume content a deciding factor in whether or not they would watch longer forms of content, such as a full-length movie.

This number represents an increase from the 57 percent figure reported in the 2008 survey.

Of those watching mobile TV and video, 45 percent have spent 11 to 30 minutes watching a TV show or movie on their mobile phone, with 30 percent having spent 31 minutes or longer doing so.

Additionally, 21 percent are using mobile TV and video services more than once a week.

Three-fourths -- 74 percent -- of respondents stated that they have not viewed an ad on the mobile phone, versus 83 percent in 2008.

This finding may suggest that mobile ad penetration on is on the rise and/or that the consumer's ability to recall ads viewed on mobile is stronger.

"We believe that moving forward the preferred model will incorporate a combination of paid and ad-supported plans, with a stronger emphasis on the former," Ms. Kaichis said. "This belief is supported by the survey, which shows that 72 percent of customers that are viewing mobile TV and video content are paying to do so.

"This number delivers a clear message that, despite the perception among many that cost is an issue, nearly three-quarters of consumers that are watching videos on the mobile device are paying for it," she said. "This is a trend that we see continuing, especially as carriers maintain their commitment to educating customers on available pricing plan options."

Don't count out the ad-supported model, however.

"At the same time, it's clear that the ad model will continue to have a place in the market," Ms. Kaichis said. "This belief is supported by the survey, which found that just over half the respondents stated that they would be willing to accept advertising in return for free TV and video content."

Fifty-one percent of respondents believe that Barack Obama's use of mobile technology during the campaign will carry over into his tenure as president.

QuickPlay Media is a provider of mobile video services for companies offering video and TV services over broadband wireless networks.

The company offers a way to manage, distribute and monetize mobile TV and video for carriers and media companies worldwide.

QuickPlay's customers include 14 of the major mobile service providers in North America and Europe, including AT&T, Bell Mobility, Cricket, Rogers Wireless, Research In Motion and Sprint.

Through its relationships with these carriers, QuickPlay powers content for leading media companies such as MTV, the NBA and Sony BMG.

Its partners include mobile advertising service providers such Amobee and AdMob.

"In 2008, we won a Mobile Excellence Award for our work on Rogers Vision, Canada's first fully-integrated mobile video and radio service, and a Mobile Entertainment Award for Best Video Service Provider," Ms. Kaichis said.

"We also were just named a finalist in the Andrew Seybold Choice Awards for our work with Bell Mobility and their Media Player, which offers customers anytime, anywhere access to an array of quality content, including live TV, video on demand and radio," she said.