There’s a great deal of speculation in the wireless industry today regarding what it will take to drive mobile TV and video adoption. Although analysts report that adoption is growing, and the media writes as if mobile TV and video has been here for ages, the reality is that less than 5% of U.S. mobile subscribers use these services.

Hyland: Everyone will play a role in getting mobile TV to the masses.

This is not surprising given the current lack of awareness, illustrated in a survey conducted by QuickPlay Media and Zoomerang which showed that –despite all major U.S. carriers offering a mobile TV and/or video service –nearly half of American wireless service subscribers don’t even know such a service is available to them.

Qualcomm’s CEO Paul Jacobs addressed the sluggish pace of MediaFLO adoption during a keynote speech at the Tech Policy Summit in late March, putting some of the blame squarely on the carriers for not spending much on advertising the service.  Additionally, the same QuickPlay/Zoomerang survey revealed that 43% of consumers who were aware of mobile TV and/or video services have not tried them due to perceived cost.

Carriers have begun to address pricing concerns with unlimited data plans, and by offering services as part of bundles. However, advertising for advanced data services is still very limited.  With some notable exceptions, such as the recent launch of the Samsung Instinct on the Sprint network, there is very little promotion of mobile TV and video services in mainstream media outlets.  And this is not made up for in the carriers’ retail locations.

The in-store experience is challenging for most consumers, and experts like J.D. Power and Associates agree, as noted in their “2008 Wireless Retail Sales Satisfaction Study.” The chief customer complaint according to J.D. Power? Sales reps typically do not have enough knowledge about the products being offered, and they do not explain the service plan differences in enough detail. This is somewhat understandable given the growing number of options and complexities of advanced data services and the relatively high turnover of sales staff in retail stores.  However, the end result is that most customers are not aware of the breadth of mobile entertainment services available to them.

Given the challenges faced by carriers –from ads to sales reps – it looks like, at least in the short term, it will be a combination of device manufacturers and content providers – media companies and Hollywood – doing most of the promotional work to drive consumer demand.  We’re all familiar with the iPhone effect (Nielsen breaks down advanced mobile Web behavior here). And Hollywood is now stepping up to the plate.  Take, for instance, the recent partnership between Spike Lee and Nokia to generate consumer interest in producing mobile movies.

With more announcements coming each day, it seems as if Hollywood and the “it device” are taking the driver’s seat in increasing awareness of mobile applications and services.

A Balancing Act
A key success factor in driving mobile TV and video adoption is the content itself.  With control of the content and the ability to cross-promote services, what is stopping large media brands from fully capitalizing on this opportunity? 

Under the current model, carriers control access to their customers, there are multiple network standards to contend with, and multiple screen sizes and formats (dictating a never-nding stream of content customization).  This presents content providers with a significant challenge as they try to cost-effectively manage and distribute content across all devices to reach all of their target customers. 

Even if they are able to overcome these hurdles, it can be difficult for their customers to locate content due to difficulties with discovery.  There is also the whole issue of content standards, and the possibility of content being blacklisted.  Thus, the approach of the major brands has primarily been to strike deals, operator by operator, to get on-deck placement, and to then use off-deck as a vehicle for their more niche content. 

However, there are signs of change: Mobile operators increasingly are opening up their networks; and smaller, well-known brands such as ComedyNet are building an off-deck presence and driving traffic with advertising campaigns. With more experience and potential success, you can count on the larger brands increasingly viewing off-deck as a viable option and that they will market the content.  However, for best results, they will need to continue to work closely with the carriers.

In-video advertising is another key factor in driving mobile TV and video adoption. This will provide the dual benefit of increasing potential revenues to the carriers and media companies and reducing the prices to the end consumer.  Although there is much talk about consumers’ unwillingness to accept advertising on their mobile phones, the reality is consumers have repeatedly demonstrated a willingness to accept advertising in return for free or discounted access to content.  In fact, in recent studies in the United States found that 54% of mobile consumers were willing to watch ads in exchange for free access to video and TV content.  As prices decrease and the brands increase promotion, the attractiveness to advertisers will grow with adoption, assuming of course that advertisers have access to the key metrics that they require to fully evaluate program results.

So who will drive video and TV service adoption? Carriers? Media companies? Device manufactures? Advertisers?  The answer is all of the above. Despite the initial complexities – common in any nascent market – all will have a significant role to play in driving awareness, uptake and revenue.

Hyland is vice president of marketing for QuickPlay Media, provider of media management and distribution solutions for mobile TV and video services.