Revenue from video and content services over mobile phones has the potential to skyrocket in the future, a digital media expert has claimed.
Steve McCormack, CEO of Wildwave.com, a provider of tailored digital media content, said that due to the high penetration of mobile phones globally there is a huge market for mobile TV and video waiting to be tapped if providers get their content offerings right.
“There are roughly two billion phone customers in the world and there’s about one billion television sets. Already this could be the biggest medium ever, even bigger than the internet,” he said.
“At the moment we see about 5pc of the mobile user base use these services — it’s probably roughly the same worldwide in any market where 3G has been introduced. If we can even get that to 20pc, that’s a massive amount of revenue that can be generated.”
Advertising will form a large part of revenue generation, McCormack predicted, as providers will offer more free content to win customers over to mobile TV and video.
“We don’t think it’s all going to be pay content; a huge amount of it’s going to be free but ad supported. At the very least we’ll see something in the region of 50pc of all content will be ad supported.
“There’s a massive want for content on phones but people are not necessarily willing to pay for all of it. If you look at the way cable TV has developed in America and here, once you pay the initial bit for your cable there are so many channels that are ad supported. Then you pay for your premium channels: sports, movie channels and adult content.”
He said that mobile video, along with the internet, could detract substantially from traditional TV viewing, especially as more and more handsets are being designed with the video experience in mind,
“There’s two major threats to traditional TV as we know it. One is internet: look at any teenager and they’re spending more time on the internet — on Myspace, YouTube, etc –and not looking at TV, which has most advertisers very stressed.
“The rest of the time they have their mobile with them. There’s no doubt that the most important consumer device for any teenager is their cell phone. We see that traditional TV broadcasters will hurt because between the internet and mobile consumers will spend more on these devices, which means less hours spent watching television and less money from advertising.”
To adapt to this changing environment, TV networks will move towards more live and event-based broadcasting, he anticipated.
“TV won’t go away by any means but it will just change it’s relationship with the consumer. We see it becoming more of a premium experience with flat screens and high-definition. If you want to watch the World Cup final you’ll watch it on your TV. TV networks will have that big, shared experience. You’ll see more X Factor- and Big Brother-type programming,” he speculated.
Wildwave is pre-empting these trends in the US where it is working to launch its digital action sports channel on a US network using advertising to generate revenue.
“We’re working in the US at the moment with a large brand to bring our action sports channel on a US carrier with ad supports so it’ll be free to the end user. We’ll have an ad from the main sponsor in between every video which you’d have to watch. We’d split the revenue between us and the main carrier.”
By Niall Byrne