It’s perhaps no surprise that an increasing number of people are cutting the cord to traditional pay television services as the medium migrates to the Internet. But what has surprised the industry is that a rapidly increasing number of Americans are watching television on mobile phones — even at home.
Previously held assumptions about mobile viewing are being upended, according to a report last week in The New York Times. “We all thought they’d be watching video clips in the checkout line or between classes,” Vivi Zigler, the president for digital entertainment at NBC Universal, told the newspaper. But owners of Apple iPhones and other video-capable mobile devices are watching long episodes and sometimes complete films on the phone.
For example, NBC Universal found that 60 percent of mobile visitors to NBC.com are coming from home, indicating that some people do not mind watching comedies and dramas on a palm-size screen even when a big-screen TV is nearby. “It’s pretty remarkable,” Zigler noted.
While the audience for mobile TV is still small at the moment, it is growing rapidly. Roughly 17.6 million people in the United States watched video on their phones in the fourth quarter of last year, up from 11.2 million 12 months earlier, said the Nielsen Company. They watched an average of three hours and 37 minutes of mobile video a month.
A growing number of media companies — including local broadcasters — are now vying for the attention spans of mobile users. But these companies don’t have a clue where the process will ultimately lead.
The “TV Anywhere” movement may uproot industry financial business models. There is a gnawing fear among media companies that once programming is free, audiences will never pay for it. Pay television companies are afraid the new mobile platforms may cannibalize their companies’ core businesses.
For now, much of the mobile TV experimentation is happening on the paid side, through packages sold by individual carriers like AT&T and Verizon and through subscription services that will be coming soon.
Joining the wireless rush at NAB last month, some of the biggest local TV station owners in the United States announced a joint agreement to transmit their content via mobile DTV. However, the venture is in its earliest stages most likely years away from actual operation. Testing for mobile DTV is now going on in Washington, D.C.
Subscription services like Flo TV, a unit of Qualcomm, have already invested $1 billion in mobile video distribution and currently send channels like ESPN, Fox News and MTV to mobile phones.
“Putting the concepts of mobility and watching video together is a natural, and we’re seeing it really grow right now,” Flo TV’s president, Bill Stone, told the Times. The average Flo TV user watches 30 minutes of video a day.
Few people, however, are willing to pay for mobile TV service. Very few pay the up to $10-a-month fee for Flo TV’s service. Stone refused to provide the numbers, citing relationships with wireless carriers. However, low subscriber numbers are not stopping other media companies from trying to charge for walled gardens of content. Beginning later this year, Bitbop, a product of the News Corporation’s Fox Mobile Group, will stream TV episodes to mobile phones for $9.99 a month.
The top paid service is NBC.com, which uses a free application to allow users to reach the network’s website. It is ad supported and free to viewers. CBS also gives away an iPhone application for TV viewing. From services like Flo TV, the networks receive subscriber fees. From their own websites, networks may find it easier to customize ads to individual viewers.
On the technology side, bandwidth constraints are still a big concern for mobile television. Making productions look good on a range of mobile devices is challenging. Carriers say they are gradually introducing next-generation networks that will be better suited for widespread video viewing.
Kay Johansson, the chief technology officer for MobiTV, another carrier contracted to mobile carriers, told the Times his company and others keep finding ways to squeeze more data through the existing lines.
Ventures that rely on over-the-air spectrum — like Flo TV and, someday, the service announced by local broadcast stations — say they can deliver video to mobile customers much more efficiently. Both groups are confident that people will increasingly want to watch video on the go, whether live over the airwaves or on demand over a wireless carrier’s network.
“The TV at home is just going to be a bigger screen,” Johansson said.