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Mobile TVJerry Maguires Next Big Player

Written by: Andy Marken

Article Overview: Can you see it? Millions of people running round with their everything cell phones -- taking calls, IMing, listening to music, watching movies. Where are the opportunities in the new business model? The pitfalls? See for yourself -- graphics available upon requests.

Mobile TVJerry Maguires Next Big Player

- It’s not “show friends.” It’s show “business”
- And we work in a business of tough competitors
- I was inspired and I’m an accountant




Rod Tidwell (Cuba Gooding Jr.) knew that football wasn’t about showing friends.

It was…show business.
Jerry Maguire (Tom Cruise) had one job…call with the best deal.

Content – Tellywood, indie and personal – is rapidly going that way. People are going from night at the theater to personal entertainment.

Tellywood sees business everywhere.

From a finite number of outlets – movie houses – they see business in home DVD, video on demand, sales for prime time viewing. They see people taking DVDs on the plane. They see the money in people downloading iTunes or other pay-and-download sites.

Its show biz folks !!!

The potential is a phone call away.

Mobile phone penetration has swept the globe (Figure 1). In the first quarter more than 226.7 million cell phones were sold globally. By the end of the year we’re looking at 2.5 billion mobile subscribers.

There is a whole generation that can’t image BC (before cell).

They do everything with their clam-shells (they are switching from the candy bars):
- 2.7 M Americans download mobile games
- 24% feel they have to answer a call…no matter what
- 33.32% of U.S. users send/receive text messages
- 27% of Europeans buy a new phone every year
- 3.8 M British users had SMS-related injuries
- 37% folks check email on their phones
- 41% of users fill free time by calling …someone
- 58% of teens have cellphones
- 50% of U.S. units are cameraphones
- Cell phone cheating up 27% in England
- 15% of U.S. users use mobile web
- Average cell conversation lasts 3 min. 15 sec.


The mobile communications industry is made up of some tough competitors who fight to get and keep every customer. Once they hook you they offer sell more and more “convenience.”

Convenience is expensive !!!

Service providers can’t add services, features fast enough. Every offering meets with financial success – ring tones, screen savers, music, games, news, email, web search (Figure 2).

It’s so popular that 36% of U.S. customers were shocked when they received their wireless bills…surprise !!!

We’ve just crawled out of the ocean when it comes to using our cellphones. Playing catch up with the kids.

We like the convenience of being able to make/answer calls anywhere, any time.

Ring tones? 15 different ones come with the phone…we can live with that.

We stumble through SMSing.

We’re becoming addicted to email on the phone.

We’ve take maybe three photos with our phone. Cool!

Yep…that’s about it.

To justify the “growing trend” of mobile phone navigation, the industry has come up with some interesting statistics:
- 18% of drivers require maps, directions 20% of the time
- 60% of consumers only spend 5% of their travel time beyond familiar destinations

We have in-car navigation in our cars. Never bothered to read the manual.

If we drive somewhere we aren’t certain about, we have a navigator. She always tells us where to go.

More importantly:
- we’re a man … we never get lost
- if we’re in NYC or Tokyo or Paris … we take a cab. Driving is insane!
- if we need directions anywhere else we use Mapquest to plan the route
- if we really get lost…we’ve got a PHONE. We call !!!

Mobile music really isn’t yet.

Most still have to download to a PC then transfer the content to your device (usually that’s an iPod or MP3 player). Firms like NTT DoCoMo are beginning to test 3G phones/solutions but it’s still in the early stages.

In the U.S., service providers – Sprint, Verizon, Cingular, etc – are the gatekeepers. While prices for download to the PC and transfer to a device have settled into the 99 cent per song or the all-you-can-download/play monthly charge options are reasonable; most consumers feel mobile services are overpriced.

People are willing to pay a premium to download music direct to their phone, say 25 – 35%. But a 100-150% premium ?? The phone companies either have to rethink the cost of their music “service” or let others offer the service. After all, it eats up mobile minutes every time you download a new song or dial into a new continuous play music service.

Just imagine the phone bill you could rack up.

With projected sales of $8 billion by 2010, it could be the lifeline the music industry needs and a way for wireless providers to recoup their investment.

If … everyone doesn’t get greedy !!!!

Mobile TV?

It’s nothing new.

Dick Tracy showed the way in the ‘50s (Figure 3). We have been preoccupied with watching TV where we want, when we want ever since.

While the U.S. is just beginning to offer mobile TV, there is already a global content distribution network in place (figure 4).

Content developers/owners and in fact people up and down the food chain are at Mobile TV as the next big opportunity.

They saw Apple sell 15 million video downloads of Lost and The Office in the first six months of service. Mobile TV has to be next.

Getting there will be a huge challenge because it is uncharted territory.

Broadband TV…established.

IPTV…established.

Mobile TV or entertainment on our 3rd screen? Yes but (Figure 5)…

Programs, shows for viewing on a business card sized screen have to be a lot different from today’s TV fare.

Want to see what works? Visit South Korea…Japan…Taiwan…France…England.

The U.S. is still in the ham radio age. Pacific Basin and European content/delivery mechanisms are firmly in the digital age.

No one has the formula worked out though on what content that will be viewed most often.

Regular TV fare sent to the phone?

Edited and repackaged shows?

New video-for-phone products?

Probably all of the above.

Right now the content that grabs the most eyeballs is up close and personal. You know news, stand-up comedy, in-your-face talking heads.

The U.S. mobile TV trials started in 2003. Penetration is already promising (Figure 6). Three million mobile TV viewers in the U.S. this year out of the 200 million cellphones in use. By 2009 mobile TV penetration is expected to reach a whopping 6.2% of the U.S. subscribers.

People are still saying…Show Me the Money !!!

The potential is impressive:
- 1.5 B global households in 2000, 1.9 B in 2010
- 1.1 B TV households in 2010
- 2 B mobile device subscribers globally in 2005, 3 B in 2009
- 735 M mobile phones sold in 2005, 944 M in 2009
- 50+ M smart phones solid in 2005, 300+ M in 2009
- 16 M WCMDA video streaming subscribers in 2004, 70 M in 2005
- 72 M streaming enabled devices WW in 2004, 918 M in 2008
- 115 M broadband households WW in 2004, 221 M in 2008
- 8 M IPTV subscribers WW in 2006, 21 M in 2008
- 95M people will have DVB-H coverage in 2005
- 350M in 2008, DVB-H covering major cities in 32 countries
- 100M potential mobile TV users in 2008
- $27 B WW market by 2010

That’s enough to inspire any accountant.

It’s enough for Jerry Maguire on the phone…

The challenges are:
- Content providers need to create programs that are visible, compelling for small mobile medium. Many of the newest players are experimenting. They are contracting with Indies for X number of segments. Almost any show is considered. If it works, fine the money keeps flowing. If it doesn’t. They move on. Every network and studio is working to reposition content and develop shows specifically for the smaller small screen
- Technology providers are hungry to deliver a broad range of video variety, in a range of formats
- EPG developers are working to develop new entertainment guides that are easy to tap into, easy to use
- Handset producers are working to deliver hardware that can enable the broadest range of services to differentiate themselves
- Mobile service operators need to focus on doing a better job of managing/balancing their network bandwidth. A few dropped segments will give consumers added cause to switch


Mobile TV is different. It is a time killer between classes, between meetings, in the cab, in the bathroom, in the bar.

Teens/tweens burn up cellular minutes. The best shows seem to be about three – six minutes long. Mobile viewers have said if they get the video free they will tolerate ads. A 30 sec spot in a three minute show? B.S.!!!

In the U.S. younger Hispanics and African Americans account for 23% and 19% respectively of the volume mobile viewers (average -- 100 minutes a month).

The tipping point for Mobile TV is here.

It’s bigger than the Olympics.

It’s bigger than the Super Bowl.

Tidwell won’t get the call on this one.

It’s the World Cup. You know what the ROW calls “real football” !!!!

Cellphone bills will be huge.

By the 2010 World Cup, business as we know it will come to a screeching halt.

People will be at work but glued to their cellphones.

Just don’t call them…

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