On Mar. 14, NBC Universal inked a wide-ranging deal with MobiTV, which claims 2 million subscribers, to beam TV to cell phones. If you take from this or any other announcements of late that TV on the cell phone, replete with significant audience and advertising, has arrived in the U.S. as a bona fide medium, I'm here to say you're wrong. And that you're wrong if you think cell-phone TV is coming anytime soon.
American visitors to Asia often return with fierce technological envy over the whiz-bang handsets on display and the routine sight of nonchalant twentysomethings updating Web sites from their cell phones. The mobile phone in the U.S. is but a sad stepbrother of such devices. References to the U.S. as a Third World country when it comes to wireless service now approach cliché; even the cellular providers' commercials cede this point.
Yes, the iPhone looms. And there are Americans using cell phones for next-generation play, including watching video. It's just that there are very few of them. Interpublic Group's (IPG ) media-buying agency, Initiative, (IPG ) last year surveyed the U.S. and found that out of 213 million cell-phone users, only 12 million watched video clips, 6 million watched live TV, and just 3 million signed up for some kind of video-subscription service.
THE GLASS-HALF-FULL CROWD will see in those numbers nothing but upside. A host of smart media and marketing executives, however, see go-slow signs. Bad broadband infrastructure or cramped living quarters elsewhere in the world meant that mobile technologies took off there first. In the U.S., thanks to the spread of broadband, home PCs, and other factors (most American commuters don't use public transportation, where a digital time-killer comes in handy), we have a PC-based culture. That's why Web video took off here: Moving pictures on a TV-size screen are a familiar entertainment in digital clothes.
But mobile video is a whole new beast—the ill-fated Sony (SNE ) Watchman mini-TV from the '80s aside—and small-screen video was unknown before the advent of the Video iPod. Exactly how huge it will get remains uncertain. Exactly how ads will get placed around mobile video is even fuzzier, which is why some big marketers sound ultra-cautious. "The adoption of technologies takes longer than people expect," warns Jim Stengel, global marketing officer for Procter & Gamble (PG ). Adds Jeff Minsky, director of emerging media platforms at media buyer OMD Digital: "There's a groundswell of interest [around mobile media], but I am very conservative about it.... It will be years before it's a huge part of the media mix."
Bear in mind that Web video is not yet a huge part of the media mix. According to research firm eMarketer, advertisers in 2006 spent $775 million on Web video, while the total U.S. ad market is somewhere around $280 billion. Granted, one reason Web-video spending is so small is that Google (GOOG ) has yet to power up some kind of ad solution for YouTube (GOOG ) (which had more than 34 million visitors last month, in case you were wondering).
But if that solution is elusive, what will make advertising around a much smaller and more distant TV relative any easier to crack? The problem is compounded when one considers how personal a cell phone is. (Even the most devoted TV-phile's face isn't pressed against the screen.) This suggests that new rules of engagement for advertising, or at least significantly rethought ads, are required.
And, of course, the marketing and advertising worlds do not change quickly. Spending on Web advertising "is not growing as fast as the external evidence and hype would make you think," says Jeff Cole, director of the University of Southern California's Center for the Digital Future. In some form, video on the cell phone is an obvious development. But so is paying for radio programming that's actually listenable, and Sirius and XM are billions of dollars in the hole. Something spectacular and bizarre will have to happen before a true and robust mobile medium is closer than several years away.
For Jon Fine's blog on media and advertising, go to www.businessweek.com/innovate/FineOnMedia
By Jon Fine