Challenges ahead for mobile TV content providers

Content providers attempting to jump on the mobile TV and video bandwagon will find it difficult to finance new projects, industry experts waned today.

Informa Telecoms and Media, in partnership with Peaceful Fish, forecasts worldwide revenues from mobile TV and video services to rise from US$2.46 billion in 2006 to US$8.35 billion in 2011.

However the jointly produced report warned that content providers vying for a share of this market face "challenges".

"While mobile TV and video content is less expensive to produce than film or broadcast TV content, it still requires upfront production costs that typically run into several thousand dollars per minute," said Chris Coffman, senior research analyst at Informa and author of the report.

"Revenue shares do not fund the initial creation of content. The mobile TV and video sector would benefit from distributors, such as broadcasters, mobile operators and content aggregators, sharing in more of the risk."

The study suggested that one strategy is to use revenue models such as minimum guarantees and licensing payments, borrowed from the TV and film industries, which involve upfront payments to producers.

Content providers are also relying on outside investments from a range of sources, including venture capital firms and public multimedia funds, but the process of connecting investors to projects and companies which need funding is not always smooth.

Mobile phone portability, network connectivity and the personal connection users have with their phones set mobiles apart from TV sets or other consumer electronics devices.

At present, mobile TV and video users prefer to 'snack' on short video clips instead of watching lengthy TV shows.

The researchers believe that this points to an opportunity for content providers to create new formats and programs which address the qualities of mobile, and integrate mobile into cross-platform media development.

"Interactive TV and video content made specifically for mobile has great potential for creating highly popular formats," said Juliane Schulze, senior partner at Peaceful Fish and co-researcher of the report.

"This can also open production opportunities for filmmakers experienced in different narrative forms, allowing them to successfully enter a new market segment.

"Content producers could accept the challenge of financing the development and production of made-for-mobile content, for example by actively involving brands and advertisers in their content creation."