• by Erik Sass  @eriksass1, September 12, 2006

More than 3.7 million consumers subscribed to mobile TV in the second quarter--up 45 percent from the first three months of the year, according to research and consulting firm Telephia. Mobile TV revenue also soared to $85 million in the second quarter, marking a 67 percent jump from the first.

Although the audience numbers are low in absolute terms, the medium's growth rate is meteoric, said Tamara Gaffney, director of product management and mobile industry analyst for Telephia. The early adopters are "helping to create a viral effect for mobile TV," because they consume it in public--which is driving the next wave of free trials and subscriptions, Gaffney said. At the same time, high subscription costs continue to spur large turnover rates, with users bailing rather than pay the fees.

But Gaffney predicted that ads will come to mobile TV by next year, which will lure more cost-averse customers. "Once they've got the subscription market filling out, they'll start going after the price-sensitive consumers with some kind of subsidization coming from other messages, meaning marketing and advertising," she said. Gaffney added that broadcasters will need to offer ad models for both streaming and fee-based clip downloads. Ad support is especially important, Gaffney said, to offset the considerable costs of data services that enable mobile TV function.

For now, however, marketers are still struggling with the still-rudimentary metrics of mobile. "The metrics are at a very early stage," she said, adding: "You need a lot of data to sway marketers and advertisers. They've become really sensitive to ROI, and they're not going to put in millions without some real basis to support the decision."

Telephia also studied the popularity of various mobile content providers. ABC News lead with an estimated 40 percent of consumers with mobile TV subscriptions tuning in--followed by the Weather Channel with 32 percent, Fox Sports with 31 percent, and ESPN with 29 percent.