Experts claim that to take off, mobile video will either have to be free and ad-supported or cost very little and be ad-supported. A survey of 1,004 users last year from In-Stat found that while
most people are interested in viewing video content on their mobile phones, 80 percent said they wouldn't pay $15 per month for it. In fact, IDC Research adds that even among those who do watch mobile
content on their phones (roughly 2 percent of U.S. wireless users according to M:Metrics), the vast majority opt for $2 downloads rather than pay a monthly subscription.
For
mobile video providers like Qualcomm's MediaFlo and Sprint Nextel's MobiTV, it's a chicken-and-egg problem. To get advertisers, they need a sizable audience. To get a sizable audience, they have to be
willing to eat their costs, provide the service for free, and hope that advertisers will come. Subscription packages are definitely the easy way out, but they'll never get a sizable audience charging
$15 per month for mobile TV.
However, there has been some progress. MobiTV has upped its ad sales unit and now rakes in about 10 percent of its revenue from advertising.
Meanwhile, services like Google's YouTube and Nokia's Medeo are offering their content for free. MediaFlo, MobiTV and others will no doubt be forced to follow.
Read the whole story at Business Week »