EXTEND YOUR REACH WITH MOBILE VIDEO

A lot has changed since the days when a portable media device was a transistor radio that you could take to the beach. Or when the breakthrough technology for mobile video was a Sony Watchman.

In those days, we could count on new media devices to expand our existing business models rather than disrupt them.

When BCFM as founded nearly 50 years ago, it was called IBFM—the Institute of BroadcastingFinancial Management. Back in the day, as they say, cable also served as a technology for extending the broadcast business. 

That’s not to imply that there weren’t attempts to reduce cable’s competitive potential, as the history books show. However, as BCFM’s experience illustrates, the alternative of collaboration is good for the consumer and therefore good for our business. Teaming up with emerging media platforms allows all boats to rise with the tide of consumer demand for easier access, more choices and greater control.

For instance, some broadcasters and cable operators are seeing success with new agreements that make selected series available on demand. New technology is even giving the parties the option of including new, demographically targeted, advertising in the VOD version. 

Fortunately, that’s the approach we’re seeing take shape with the industry’s response to the mobile video market. And for good reason.

Mobile TV/video subscription revenues grew 198% year-over-year to $146 million in the first quarter of 2007, according to Telephia’s recently released Mobile Video Report. There were 8.4 million mobile video subscribers last quarter with penetration doubling to nearly 4% since the first quarter of 2006. Nearly 29 million mobile video consumers logged onto the mobile Web in March 2007, a penetration rate of about 12%.

The Telephia data also indicate that mobile video audiences are primed for seeing ads on their phones, MediaPost reports.

Video consumers had the highest recall of viewing ads on their phones, as compared to all data service consumers. Some 55% of those surveyed recalled viewing a mobile ad in the last 30 days, that’s nearly three times the recall rate for mobile data consumers in general. Moreover, 41% of mobile video consumers recently responded in some way to an ad.

While viewers may complain about advertising, many of them recognize that ads are inherent to the free TV model. According to a survey conducted by m:Metrics for the Mobile Marketing Association, more than 41% of respondents said they would watch advertisements in order to receive free mobile video. An additional 20% would watch ads to in order to watch mobile TV for a reduced fee, according to the research.

Local broadcasters are aggressively pursuing both of these NTR—non-traditional revue—opportunities.

As a recent article in Mediaweek reported, local stations have the ideal content and formats for mobile video: short, digestible reports concerning local news, weather, traffic, sports and community information.

In addition to the video service, mobile customers can sign up for text messages covering sports scores, financial data, movie show times, lottery numbers and hyper-local information, like school closings, traffic delays and high school sports scores.

An estimated 200 TV stations have begun offering consumers mobile TV packages over the past 18 months and are getting a warm welcome from cell phone customers. For example, ABC’s O&O stations, which began offering video six months ago, have seen audience traffic double during that time, Mediaweek reports.

As TVNewsday.com reported last week, ABC has expanded its mobile video endeavors with the launch of a free mobile video service in all 10 of its O&O markets. ABC is using Local Wireless, which has been powering the station group’s text-based mobile services.

Fifty of the stations use News Over Wireless' services, which is part of CBC New Media Group, a division of Capitol Broadcasting Co. News Over Wireless is a subscription-based model, where fees range from $2.99 to $4.99 a month.

Offering the service is extremely easy for the TV station, Mediaweek says. In most cases, the cell phone carriers promote the service and handle the billing in return for a percentage of the subscription revenue.  

One station cited in the article reportedly receives several hundred thousand dollars in revenue from mobile subscriptions. The station offers two subscription levels: text and images for $3.99 a month and video for $4.99 a month.

The 30 stations affiliated with Internet Broadcasting and the 140 affiliates with Local Solutions Network are using an ad-supported model, according to the Mediaweek article.

The ability to target viewers and measure usage makes mobile a valuable element in multi-platform advertising and sponsorship sales packages.

In fact, mobile advertising revenues could represent 10% of a station's business within the next five to 10 years, TVB President Chris Rohrs told Mediaweek. 

With projections for continued growth in the mobile video market, fueled by the next generation of mobile devices, like the iPhone, and mobile platforms like cable’s Pivot co-venture with Sprint, there are plenty of reasons for accepting bullish expectations about its potential.

As we watch these markets evolve, we can see that consumer demand for personally relevant media has transformed the Internet and cell phones from text-based platforms to video platforms. How great is that for those of us who are in the video business.

May our response continue to be one in which we get in touch with the entrepreneurial sprint that created our industries and reach out to collaborate with the pioneers of today’s new media markets.

At BCFM, we are committed to fostering these types of partnerships. Our fall regional seminar, Anytime…Anyplace-–Making Money from the Growth in Personalized Media, on Sept. 19 in New York will focus on these trends, the opportunities and people making them work. Join us.

Mary Collins is the president of the Broadcast Cable Financial Management Association, a professional society for financial, MIS and HR executives in the electronic media. Her column appears here every other Friday. She can be contacted at mcollins@bcfm.com or 847-716-7000.