The sight of mobile phone users frantically tapping at the keys on their handsets has become commonplace in recent years. Mobile users in the UK - where mobile penetration is 160% - send more texts than any other country in Europe, equating to 52% of the nation's mobile use (source: Universal McCann).
But TV, rather than texts, could soon occupy mobile users' attention. The UK is the leading adopter of mobiles as multimedia devices, with 87% of respondents having taken a photo and 28% having downloaded a video clip. This shift in mobile habits has led to a surge in demand for quality sport, TV and film content: 8% have tried mobile TV, but 33% would like to use it (source: Universal McCann).
On the "huge potential" for media owners and advertisers, Tom Smith, EMEA research manager at Universal McCann, says: "There is a massive unsatisfied demand for content and services. This demand gives content owners the opportunity to move into mobile platforms, while advertisers have the chance to build a more positive relationship with consumers by creating access to content and services."
However, before the industry gets carried away, it should heed the blow dealt to the medium in July, when Virgin Mobile announced that it was switching off its mobile TV service due to lack of customer interest and take-up. Clearly, advertisers and agencies must tread carefully when stepping into the mobile TV minefield.
Mobile TV, although in its infancy, is attracting the industry's interest for two reasons. The first is reach: the mobile is ubiquitous and is particularly favoured as the communications medium of choice among young adults. The second is the personal nature of the mobile: the fact that you can get the consumer's agreement to receive marketing messages on a device that is taken everywhere with its owner.
There are two types of mobile TV. The first is simulcast, where a programme transmitted to a regular TV is also broadcast on a mobile phone. The second is when the broadcaster or network operator makes video clips available for download to the mobile handset, usually on a subscription or pay-per-view basis. These range from short, made-for-mobile versions of popular TV shows to user-generated content.
Ad-funded content
Mobile network 3 led the way in this area with its SeeMe TV service, where users upload clips and are paid each time another user downloads it. Sky is another big player: its content is available across all the major UK mobile networks, with the exception of 3. More than 30 Sky channels are available, broken down into three packages. Each package is charged at £5 per month (see box).
Elsewhere, ad-funded content has been trialled with some success. ITV offered video clips of I'm a Celebrity last year, and Melissa Goodwin, head of mobile, reports that consumers received these enthusiastically.
"The number you hear around the industry is that you get about 60 times more traffic when the content is free" she says. "This is good for us, obviously, but it's also great for the advertiser."
Al Russell, head of mobile internet and content services at Vodafone, tells a similar story. He says: "What we saw with Celebrity Big Brother earlier this year was an increase in volume of about 50 times when the clips were ad-funded and given away, compared to when we charge per clip."
According to Russell, the name of the game for everyone in mobile TV is experimentation. "Everyone's experimenting," he adds. "There isn't a huge return for anyone at the moment, but it's vital to learn what works and what doesn't."
Customers certainly seem happy to entertain the idea of advertising on their mobile. An Orange survey conducted earlier this year found that more than 50% of those questioned would be happy to see more advertising on their mobiles, while Universal McCann's Anytime, Anyplace study revealed that branded content is likely to become the most acceptable form of advertising for consumers.
But not all the research is so positive. A study released in July by analyst Canalys found that half the 2,000 European adults surveyed had no interest in watching any kind of TV on a mobile phone, even if the service was free. Even if consumers decide they do want to watch TV on their mobile, the ad-funded model will only work if advertisers and media buyers are convinced of the medium's merit.
Caroline Jones, director at Starcom MediaVest Plus, says the mobile TV situation is reminiscent of the early days of interactive television, with many different formats and points of contact making the medium "very complicated to buy". She says: "The main barrier to adoption for advertisers is that mobile TV needs a common trading and technical currency. The service providers need to get things organised."
James Penfold, business development director at digital production company etv, blames the networks for the lack of progress.
"Mobile is a massive opportunity, but the amount of data available from mobile networks is criminally low," he says. "The data is there. Every stream watched ties back to the user's SIM, but the networks don't seem to realise that if they want to take on the broadcaster role, they have to deliver on all levels, including providing data and feedback to the advertisers."
Common metrics
In the operators' defence, Vodafone's Russell says the company is moving in this direction, while Mike Short, vice-president of research and development at O2, says that agencies need to define the metrics they are interested in. He points out that data from any one network is likely to be of little or no interest to advertisers, since media buyers want the mechanics in place for a cross-network media buy.
Short says: "We have worked with the Mobile Marketing Association to explore what the common metrics would be and how they could be released centrally. But we need the agencies to tell us which metrics they want us to provide. Not all ad agencies have a consistent set of metrics that they want to view across all the networks."
Another challenge is data charges. Flat-rate tariffs are becoming more widespread and Mark Maddox, managing director of Que Pasa, which runs Channel 4's mobile portal, believes this is vital if mobile TV is to succeed. "Mobile TV and mobile ads are here to stay, so long as the networks push the flat-rate data tariffs so that consumers will spend more time surfing mobile internet and discovering content."
There is clearly work to be done if mobile TV is to establish itself, and much of that work will involve convincing advertisers of its merits.
But if you're searching for a positive outlook, look no further than mobile TV provider ROK Corporation, which has its own free mobile TV service, FreeBeTV. Marketing director Bruce Renny says the service will carry advertising from October and that ROK is anticipating a global audience in excess of 10 million people by the end of 2008.
He says: "If people watch on average for three to five minutes at a time, that equates to 300 million audience impacts a month at one view per day, or 600 million at two views a day. With the cost per minute (CPM) for mobile thought to be worth more than the CPM for broadcast TV, the media agencies will tell you what that's worth."
With those sorts of numbers, it is potentially worth a fortune. Whether mobile TV will deliver on its potential, however, will only become clear over the next couple of years. As Jake Redford, head of partnerships and services for TV and video on demand at Orange, says: "It's still a case of suck it and see. Anyone who says they have all the answers right now is either lying or has superhuman powers."
MOBILE TV SERVICES
The major broadcasters all have content available on mobile, with simulcasts of ITV, BBC1 and Sky content, plus made-for-mobile clips. There are now about 19 mobile TV channels, with approximately 1.4 million UK users. Charges vary by network, but programmes are typically sold in bundles for about £5 per month, with video clips sold on a pay-per-view basis for 25p to 50p per clip. 3 offers unlimited mobile TV for 24 hours for 49p, and its contract customers can have unlimited access to 18 channels, including eight live channels, for £5 per month.
SKY
More than 30 Sky channels are available across all major networks except 3, including simulcasts of Sky Sports 1, 2, 3, Sky News and Sky Sports News. Sky sells its content in three packages - News & Sport, Entertainment and Music - each priced at £5. Sky's 24/7 Football service is available on Vodafone, Orange, 3, T-Mobile and O2, offering customers clips, highlights and a video archive for £5 per month.
BBC
Video news highlights are available via the BBC mobile WAP site. Various BBC1 programmes are simulcast on Orange, Vodafone and 3. Video clips from some of the BBC's most popular TV shows, including The Office, Little Britain and Doctor Who are available on the O2 active mobile portal.
ITV
ITV is simulcast to Vodafone, 3, Orange and Virgin Mobile. Downloadable clips from shows, including The X Factor and I'm a Celebrity, are available from ITV's direct-to-consumer WAP site. There is also a microsite on Vodafone, T-Mobile and O2, and distribution deals are in place for video clips with 3 and Orange. O2 customers can go through the O2 Active portal direct to ITV's mobile portal to download video clips.
CHANNEL 4
Channel 4 has its own mobile portal with video clips and is simulcast on Orange and Vodafone. The O2 Active portal links to C4's mobile site.