A free, ad-supported mobile video model? Possible – and preferable

By Giselle Abramovich

January 18, 2008

Three [key] developments were iPhone, YouTube on iPhone and iPhone

Better handsets and an open mind may make the market for mobile video more appealing in 2008. But a leading online ad network expects Internet television on mobile to outshine video, though speed of delivery will be an issue.

In a conversation with Mobile Marketer’s Giselle Abramovich, BiggerBoat cofounder and CEO Adam Lilling places his bets on a free, ad-supported mobile video model versus a fee-based system. The market gets to decide, but agencies and marketers will begin testing in the months ahead as the masses start consuming TV on mobile.

What is the key trend you expect to see in mobile video in 2008?
I’m going to seem U.S-centric but it’s because the U.S. is far behind Europe and Asia in mobile video. It’s really hard to talk about trends in Sub-Sahara and New York City at the same time.

Two of the key trends I see are, first, major network television shows appearing on your handset. It won’t be enough to call it saturated, but there will be a lot more great programming hitting the mobile phone in the U.S.

Next, great applications to share, discover and connect video. With Android and the Open Handset Alliance, we’ll see third-party developers create innovative ways to share, discover and connect to important news, sports clips and other short form mobile video.

Adam Lilling, cofounder and CEO of BiggerBoat

How will 2008 differ from 2007?
Openness and even more phone-crashing. We’ll see the Wild West get crowded through third-party applications, but our phones crash a lot more, not less.

If you expect Verizon to deal with the integration of an independent app on its network, you’re kidding yourself. But with an open platform comes better broadband video.

Internationally it’s amazing. Look at the new Sling Media SlingPlayer that hits the U.K. this month.

I also think the [Beijing] Olympics play a role in 2008. At some point in the evolution of mobile video – probably in 2008 – there will be a moment, maybe it’s a gold-medal moment at the Olympics, maybe it’s unfortunately related to terrorism, but mobile video will begin to show its value when people want immediate access and all they have connected to the Internet is their mobile phone. I think 2008 will have that inflection point.

What does this mean for marketers? What opportunities arise?
For U.S. marketers, interesting branded content delivered over mobile should begin to get notice. But I don’t think 2008 will be about the marketers.

I know, we’re an ad network, but our bets are on Internet television breaking out to the masses in 2008, not mobile video. I think the opportunities for marketers will be more testing and curiosity than a line item in the marketing plan.

Our goal for 2008 is to experiment and get metrics on what people respond to. To us, someone wanting to reach a specific audience while they’re watching NBC’s “Scrubs” works on the mobile phone as well as the PC.

The two issues are format of the ad and length of the content. Since it’s only clips and not the whole shows being transmitted – though Sprint has ABC shows in their entirety, so watch out world, here we come – I think 2008 isn’t the year of the marketer in mobile video here in the U.S.

What other trends do you anticipate in mobile video?
Free. I think MobiTV is great but I’m not ready to pay $9.99 for clips from NBC comedies.  I’m not even getting the whole show. I should get the whole show ad-supported while I’m waiting at the airport.

Now that the networks are getting 40 to 50 cents per viewer hour on the PC, free, ad-supported is coming to U.S. mobile phones.

I think television networks and video suppliers have learned from the record labels’ mistakes and are seeing great success from ad-supported Internet television. I think a lot of that will translate to mobile.

I know people say, “Who wants to watch TV on a two-inch screen?” but I would have said the same thing about grainy videos on YouTube.com.

What were some key developments in mobile video in 2007?
I think the three developments were iPhone, YouTube on iPhone and iPhone.

Who do you anticipate will be key players in this area in 2008?
Google, Verizon, Nokia and Apple are my bets. But the great thing about mobile video is that the YouTube for mobile video isn’t necessarily going to be YouTube.

MobiTV is a great example of progress in the U.S. mobile video market, but someone will come along and offer it for free, ad-supported, even without the ads for now just to own the market share.

There’s too much money out there, it will accelerate the market faster than organic demand. The same thing happened with the Internet bubble in the late ’90s. Only this time, there is a real economic value in the worldwide handset market which can help avoid the pitfalls of the late ’90s.

What challenges do you think mobile video faces in 2008?
Speed. If you look at the growth of broadband video to the PC, it tracked the adoption rate of cable and DSL. I have the hardest time watching a one-minute clip on my Verizon phone – EVDO – and it reminds me of my Internet ventures of 1996-1997.

Is mobile video fully integrated with the other channels or will it be in 2008?
Definitely. However, I don’t think it will be 2008. We’re spending a lot of our efforts on Internet television in 2008 and though I think the conversation is reaching critical mass, marketers will still be in testing mode in 2008.

There are great opportunities for mobile advertising internationally right now, but in the U.S. I see more opportunity with coupons and other interesting ad units within mobile, just not surrounding video.

I do think mobile video will get its Second Life moments in 2008, which to me is just the rush for press and to make sure when a marketer is asking the agency if there are any mobile video opportunities they can then say, “Yes we’re testing that.”

What’s the one thing marketers should do this year in mobile video?
Try something. Anything. Customize some video content, sponsor some of the greatest movie moments of all time. Most importantly, don’t miss out on the Olympics.  Basically, learn.