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Users Definitely Want Mobile TV – No They Don't

Ahhh… studies. We love research studies because we can use them to support our business plans, our arguments, and our points of view. But they can be wrong in so many ways. The questions can be framed improperly, the assumptions can be off, the model can be poor, the interpretation can be flawed, and lastly the results can be skewed to suit the needs of the ‘skewer’. Yet we DO need research studies to get an idea of quantifiable market opportunities. So make what you will of two studies announced today: Nokia, main proponent of DVB-H mobile video technology, tells us that mobile TV will have mass market penetration by 2008. Nokia cites dozens of studies in which consumers were willing to pay between 5 and 10 euros per month. But we note that in these studies, consumers are usually asked if they would pay for it, they are not asked to pay for it. It is a subtle difference. Nokia is clearly biased, having invested heavily in DVB-H, but DVB-H has huge spectrum availability issues to overcome even in Europe where it should be strongest. Meanwhile, an RBC Capital Markets study revealed in the WSJ that 75% of US cell phone user said they were not interested in watching video on a mobile device (69% also said they were not interested in music.) Brian Dolan over at Fierce MoCo correctly points out that that’s a glass half-empty way of looking at it, and it in fact means 25% are interested in mobile video. And that 25% may even be an underestimate, since consumers generally are not interested in innovations which they don’t fully understand. In fact, four years ago, there were studies that revealed dis-interest in color screens for cellphones: “What for?” was a common response. So do users want mobile video or not? Well, yes, a significant proportion do. Will enough users pay around $10/mo for it to justify the capital expenditure? Nobody really knows.

By the way, some of you may have disagreed with my assertion above that some consumers didn't want color screens. Actually, consumers never really had a problem with it so long as carriers subsidized the cost. See: https://www.techdirt.com/blog/wireless/articles/20021007/161704.shtml But I'm not making this stuff up. In 2002, I was consulting with SK Telecom and we were trying to sell our platforms and services to North American carriers. I personally had to explain the value of color screens to more than one top US carrier mobile data VP. There was research indicating the customer thought that color was better, but only marginally, so why pay for it. But in those days (2002), consumers thought of phone screens as four lines of 24 characters of text. The benefit of adding color to four lines of text was not understood. Nobody was imagining color on a 320x320 bright screen. We had to show the NA carriers data mapping growth in Korean mobile data revenues against the launch of color screens to convince them that the subscribers would grow to appreciate color, even if they didn't know it in advance. New mobile video services, and other wireless innovations are like Tivo. Can you imagine asking someone in 1999 if they wanted a TiVo? Most consumers would answer, "But why? I already have a VCR." They didn't understand the value of the new product. But just try to pry the TiVo off the AV rack of that same consumer today. They'll channel Charlton Heston "...From my cold, dead hands."

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