In a Down Economy, Mobile Video Growth Remains Strong
Mobile video usage and sales are still growing and projected to continue growing despite the downturn in the economy -- though some forecasts for the nascent industry have been toned down, analysts and industry executives told us. Usage and awareness of mobile video services continues to grow, but spending on the services may not grow as quickly in 2009 as the industry expected last year, said Lewis Ward, IDC Research manager for mobile, media and entertainment. IDC cut by 10 percent its mobile entertainment sales growth forecasts for 2009 after the economy tanked, he said. “It is impacting the market,” he said.
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But industry executives are encouraged by what they've seen. “We were expecting at least a leveling off or some adjustment and we just haven’t seen it,” said Paul Scanlan, MobiTV’s president. The subscriber growth has remained steady and the amount of time subscribers are using MobiTV’s service keeps growing, he said. If the economy hadn’t slowed, the growth would probably be even higher, he said. “But because of the economy our growth is still good, but maybe it’s not outstanding.” It’s possible that the downturn just hasn’t caught up with mobile video, he said, but he doesn’t think so.
The availability of good content for mobile devices, wireless carriers’ marketing of their data plans and the uptake of smartphones have fueled mobile video’s growth, Scanlan said. Despite the downturn, consumers have been using more mobile bandwidth, a good sign for video, said Quickplay Media Vice President of Marketing Mark Hyland. “The growth of mobile data is actually quite strong, and we've seen some evidence that it’s been able to grow even through the first part of the downturn,” he said. “We're very bullish in the long run on people doing more and using more data over the portable and wireless devices. That’s going to include entertainment and that’s going to include TV and video.”
But only a small proportion of those who know about mobile video services buy them, said Tina Teng, an analyst with iSuppli. If the economy continues to drag, consumers may think twice about spending more money on a mobile video service, she said. “If there is a limited budget, I might rather keep my data plan than buy a mobile TV subscription,” she said.
Ad sales for mobile video have been holding up, Scanlan said. “It doesn’t necessarily reflect what’s happening in the rest of the advertising market. I think because we're an emerging platform and the size of the ad dollars isn’t massive, we haven’t seen the same adjustments there.” Still, the TV broadcasters pushing for a mobile DTV service are looking for other ways besides advertising to bring in revenue, he said. “As ATSC M/H rolls out in an environment where advertising has less certainty about it … it’s even more important that there be a monetization strategy,” he said.