As operators close in on mobile TV, many seem to forget a critical question: How much video can a consumer really take on a one-inch screen? And more importantly, at $15 per month, what should those little screens do for them? The bottom line: Less is more. If mobile TV is the messiah of ARPU, then how exactly should operators offer content that is usable, compelling and appropriate? If we pull away from the mobile TV huddle, it appears the only surefire ARPU booster will be to offer snippets of video as part of a larger mosaic of highly targeted and customizable opt-in services.
Operators have a number of choices in delivering mobile video to subscribers-from downloadable clips, to live streaming television, to peer-to-peer applications such as push-to-video and video messaging. While it appears there is a small market for streaming content, the one-size-fits-all approach will prove less compelling over time. After all, and at approximately $15 per month, consumers ultimately will want more flexibility in programming and length. Furthermore, networks are currently optimized for peer-to-peer communication, so it stands to reason that operators should court their subscribers' appetites for video sharing. However, focusing too closely on mobile television ignores the basic lifestyle and usage premises that underlie core handset technology.
For example, the market has proven that there is relatively little need for full Internet browsing capabilities on cell phones. This is as much a limitation of keypad and screen size as it is about time. If a mobile phone is the only piece of technology a consumer has access to, there is a good chance that consumer is on the move-between home and office, for example, or running around the mall. Consumers don't need to browse aimlessly on the Internet when they're on their daily commutes or on their lunch breaks; they need vital information delivered to them, only when there are critical updates, such as stock quotes, weather and traffic changes, and new e-mail messages. Attention span at such times is necessarily short, so why should operators expect a consumer to download and watch the latest episode of Reno 911 on the way to their child's cello recital? Even with new technologies such as DVB-H (Digital Video Broadcast: Handhelds), an inch of screen would be hard pressed to deliver the enriched video experience gadget gurus are used to.
More likely, a consumer will need to do a number of things during the five minutes between, say, pulling into the pick-up line at school and loading the whipper-snappers into the multi-passenger hybrid. For example, they might check voicemail, send a text message, check office e-mail and still have time for a snippet of American Idol--if they're lucky. That said, highly targeted content in compressed quantity stands the greatest chance of actually attracting and continually monetizing a user. Rather than forcing long and standardized videos down consumers' collective gullet, only the operators that allow users to create their own content environments can reasonably expect ARPU to increase.
User groups have demonstrated that mobile subscribers have an average attention span of 90 seconds. That's hardly enough time for a commercial break (and let's not even get started on how users will react when operators start dropping ads into their video!). If we look at how to adapt mobile video to this type of audience, a number of plausible content offerings emerge. For example, small clips followed by some kind of user interaction could be compelling to subscribers. Deliver Lost mobisodes and let fans determine which characters' background they want to explore. Or contract with Fox to license exclusive Idol footage and have fans vote based on performances. If there's anything TiVo and TV-to-DVD have taught us, it's that consumers want as much control over their content as possible. It's not just about picking the best time to watch; it's about managing content delivery, managing emotional response to the content and fully participating in shared cultural impact (i.e., at the water cooler). As it stands, and for a precious few months going forward, operators have the unique opportunity to pierce needle-sharp under the market's skin and suffuse consumers' lifelines with the video they want and in doses they can handle.
Operators should also consider the potential threat that other mobile video technologies pose over cell phones. For example, video over iPod has the advantage of a much larger screen size over the average mobile phone. iPods also support an exceptionally dynamic sound experience. We are also in the advent of the sling box, which poses perhaps the single greatest threat to downloadable video. As soon as consumers can access their home digital video content from the road, they will have little use for long and/or streaming video content from their cellular service providers. There may be several ways around this, but all roads point to compressed programming, and the oracle says "deliver it now." In fact, perhaps operators should allow users to command their TiVo control centers from their handsets, an arguably indispensable tool to use from afield. As soon as operators see video as a piece of the content-management puzzle, rather than as the one thing to rescue sagging ARPU, they will have a better chance of increasing revenue and reducing churn. The question becomes: What, at $10-15 per month, do consumers want? And who are those consumers in the first place?
Let's take a moment to speculate. The folks who won't mind paying the extra monthly fees are probably teens and those subscribers who spend a fair amount of time on the road. In fact, these particular consumers probably don't pay a whole lot of attention to their phone bills in the first place and would be hard-pressed to find any particular call on their 87-page statement. Let's also take a second to look at the specific advantages of the cell-phone format. It goes everywhere you go; it's personal, it's private. Get the picture? With a range of content to suit the desires of a more discriminating clientèle, operators increase their chances of delivering exactly the programming consumers will return to-and with gusto.
Combining short bursts of video with data, music, voice, ringback and a host of other services, all accessible within a button's push, is by far the best way for operators to wield the mobile TV market in their favor. By intuiting users' habits based on current market data and common sense, operators have little to worry about when it comes to driving ARPU. Several technology providers stand at the ready to power these new offerings. If the "give-it-to-me-now" experience propels the mobile universe, then operators' answer should be "By all means, and give it to them good."
John Orlando is chief marketing officer at NMS Communications.