It might not be long before the Verizon Wireless pitchman asks: “Can you see me now?”
With 89% of U.S. adults signed up for cellphone service, carriers are trying to boost revenue by getting customers to receive more data on their phones — and nothing contains as much data as video.
The big carriers have done little to promote video, in part because most handsets can’t show moving pictures.
But that may change soon, industry executives said. Sales of video subscription services jumped to $308 million in the last quarter of 2007 from $112 million a year earlier, according to Nielsen Mobile.
“It will ultimately see pretty good adoption,” said industry analyst Charles Golvin of Forrester Research Inc. “When I go to the supermarket, and sometimes gas stations, there are screens there. We’re Americans — we likes our video.”
Some major hurdles to widespread video services have fallen in the last year, raising hopes for a boom to match those in Asia and Europe.
Among the changes:
* the introduction of Apple Inc.’s iPhone, which features a brilliant screen and links to videos for sale, and phones trying to replicate its success
* recent pledges by major carriers to grant network access to more devices and software
* new, all-you-can eat data plans that don’t penalize viewers for getting hooked on mobile video.
Phones introduced at the recent CTIA Wireless trade show here suggested that the number of mobile video subscribers would keep going up. The latest crop includes the LG Vu, one of two handsets capable of carrying a broadcast service that No. 2 carrier AT&T Corp. will start offering next month, and the forthcoming Samsung Instinct, which will be sold in the stores of No. 3 Sprint Nextel Corp.
Although the wireless carriers won’t say how many video subscribers they have now, Golvin puts the figure at 7% of the customer base.
“We’re just starting to get handsets in the hands of average consumers,” Gartner Inc. analyst Mike McGuire said. “There’s still the open question of how much to charge and what people want to watch.”
A schism is emerging between subscription services, which bring carriers a cut of the profit, and free video.
The major carriers typically charge about $15 a month for video plans, which analysts said reduces the potential number of subscribers.
The most popular is managed by privately held MobiTV Inc. of Emeryville, Calif. Nearly 4 million mobile customers have access to it, but some probably don’t know that they can watch television. Sprint offers eight MobiTV channels free as part of a service package attached to its high-end phones.
MobiTV also appears on AT&T’s network, while Verizon offers a rival service called MediaFlo, which is owned by cellphone chip maker Qualcomm Inc. AT&T plans to add MediaFlo’s programming to its mobile video lineup in May.
MobiTV and MediaFlo mainly repackage broadcast television, and users can’t skip commercials.
Before such plans take off, Nielsen analyst Nicholas Covey said, “content providers and operators need to cooperate on a mutually beneficial advertising business model” that makes those offerings cheaper or free. Landing more exclusive programming, through deals such as AT&T’s recently announced agreement with Sony Pictures Television for old movies, would also be a big help.
But the larger issue, said MobiTV Vice President Ray DeRenzo, is getting consumers to realize they can watch TV on the go.