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Mobile TV Ready for Prime Time

Mobile TV and mobile video finally could be ready for prime time in 2011.

To attendees of the CTIA Wireless convention this week and the Consumer Electronics Show earlier this year, that prediction may generate a feeling of “haven’t we heard and seen all this before?”

But industry insiders say things are different now.

Man watching mobile phone television
Shuji Kobayashi | Stone Sub Taxi Japan | Getty Images
Man watching mobile phone television

“We’re at interesting crossroads,” says James Citron, president and CEO of Mogreet, the leading mobile video-based mobile marketing platform in the United States.

“For the last five years we’ve heard, ‘this is the year of mobile video,’ but we’re finally starting to see if now in 2011 that the real opportunity for mobile video will arrive.”

This brings up the first question, which is why have there been so many false starts? The simple answer is that despite the hype of mobile TV, until recently there hasn’t been the widespread adoption of handsets capable of receiving it.

“The truth is that nobody wants to pay extra money for it,” says Aapo Markkanen, industry analyst for Consumer Mobility at ABI Research. “The biggest reason why digital mobile TV has thus far failed is the lack of compatible models, which obviously limits the size of the addressable market.”

CNBC - Ctia Wireless 2011- The Wireless Connection
CNBC - Ctia Wireless 2011- The Wireless Connection

In order for potential viewers to become actual viewers they need to have mobile handsets that have the special built-in tuner chip, which adds substantially to the manufacturing costs and thereby the selling price, says Markkanen. “For this reason none of the leading handset vendors has really dared to place big bets on e.g. DVB-H in this sense, since the consumer demand just isn’t there yet. It’s a bit of an egg-and-chicken dilemma.”

Beyond just the phones there is also the issue of infrastructure to carry the video as well—most experts agree that the 3G networks just weren’t up to the task.

“The lack of reliable 3G networks and high speed wireless networks, including Wi-Fi to offload some of the data that the services required just haven’t been there,” says Noah Elkin, Principal Analyst at eMarketer, who also adds that the penetration of smartphones, which are capable of delivering video, are still very much in the minority yet are growing. This could give mobile video the shot in the arm it needs.

"I actually challenge that mobile is the thirs screen. It really is the first screen, and for many people around thw world when it comes to video could be the only screen." -President and CEO, Mogreet, James Citron

There could also be strength in numbers however, as the Open Mobile Video Coalition can attest. The group first unveiled the latest mobile DTV products at this year’s Consumer Electronics Show from both the Mobile Content Venture and the Mobile500 Alliance broadcaster consortia.

In addition, the OMVC has continued its incubation phase as a standard work out, and now from a mere handful there are actually 60 stations in the country broadcasting with Mobile DTV.

Yet the debate on how the viewing habits of consumers will likely evolve remains, especially as the two- to- three-inch screen of the mobile smartphone, and even the seven-inch screen size of the Apple iPad, are going to face serious competition from the increasing numbers of 50-inch TV now in many living rooms.

Likewise, while old movies may suggest a time when people actually crowded around the front of an appliance store to watch TV, the truth is that viewers aren’t so likely do to this with mobile handsets except for the most breaking of news or other live events—at least not in North America or much of Europe.

The so-called “third screen” of mobile handsets has however seen greater adaptation in the international markets, notably Asia and Latin America, where the digital switch-over from analog TV may still be many years away.

“These broadcasters are essentially the same as what is delivered to analog TV sets, and to receive them the consumer basically just needs a capable handset,” says Markkanen. In these markets, mobile handsets could become the dominant TV set as well.

“In emerging markets the penetration rate for normal TV sets tends to be much lower, and the average family size larger, so mobile telly is often the Plan B for family members whose viewing desires for one reason or another are given a low priority.”

In the United States and Western Europe, live news and sports could be the exceptions to the norm when it comes to viewing mobile video.The more likely scenario is that mobile will complement the TV viewing experience rather than replace it.

“The mobile handset could give competition to the cable box rather than the TV itself,” says Ross Rubin, Director of Industry Analysis for NPD Group. “A lot of the viewing will likely be clip based and potentially social media based. News and sports are the big events for viewership, but beyond that the longer the video format, the harder it becomes for mobile consumption.”

Thus the mobile phone could be the way to view snippets of TV for viewers during a break at work or during their commute, as well as what the experts call sideloading, as in recording a program at home and then transferring it to a phone for later continued viewing. The phone could also make this sideloading become a way of sharing the video watching experience.

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“I can pick up a mobile phone, watch a clip of extra content or a web video and share it,” says Citron. “in the past you could have 10 friends over to watch TV, and now with the phone you can view something and with a few clicks share it with your 50 closest friends. That really has the potential to change the viewing experience on the phone.”

All this also makes Citron reconsider what has been labeled so far “the third screen.”

“I actually challenge that mobile is the third screen. It is really the first screen, and for many people around the world when it comes to video could be the only screen. This is the one device they’ll have 24/7 and they use it for so much more. Video is what will make it the first screen.”

Watch CNBC's coverage of the 2011 CTIA Wireless convention on Tuesday, March 22 and Wednesday, March 23 from Orlando, Fla. Technology correspondent Jon Fortt will report live from the convention floor, Jim Cramer will host a special edition of "Mad Money" on Tuesday at 6pm ET, and Michelle Caruso-Cabrera will co-anchor "Power Lunch" from the event on Wednesday at 1pm ET.

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