he's got the whole world in his hand

Last week, MobiTV received $70M for their 3rd round of funding. That’s a lot of money for a $10 monthly service that cracked its 1M subscriber back in early April 2006 – That’s at least $10M in monthly revenue. Since they are mum about their future plans, one can only hypothesize that those plans might include driving adoption further with more streaming TV services (advertising & promotions won’t use up that much funding) and most likely, developing new products to stream those TV services to and through different distribution methods. Well, Moconews.Net suggested those. I am inclined to believe that they would try to set up some advertising platforms to subsidize streaming content and bring down subscription fees.

Some stats to back this up - Emarketer reported that by 2009, 36M users would watch video on phones (that’s a little less than 10% of the US population) but only less than 10M of them would be paid subscribers. These early adopters are willing to pay a premium for bragging rights. Another Telephia report pegged that mobile tv subscribers pay about $40 more ($94 versus $54 on average for non-tv mobile subscribers). With these numbers, it’ll be difficult to convince the mainstream to pay 75% more (~ $40 / $54) to access mobile tv content. So, advertising would have to make up the difference in order to drive further mobile tv adoption.

Using to the anecdote that “consumers do not hate advertising, they only hate irrelevant ones” as a guide, mobile advertising is a brand new unspoiled world that advertisers can start afresh in. With so much is learned recently from web traffic analytics and even online behavior targeting, those disciplines can be translated to mobile traffic, in order to stream the most relevant ads to mobile users. I think creating a good user experience is crucial to fast adoption. In short, for mobile ads to be accepted, they have to be

(i) free to users (no costs to minutes, data streamed, etc..)
(ii) relevant to content or user (context or behavior targeting)
(iii) pleasant user experience
(iv) most importantly, mobile ads have to be “opt-in” – (not a problem if they are incentivized properly)

Also, the young users that advertisers are supposed to covet, are also not earning enough income to pay for premium subscription fees. The same Telephia report also stated that 18-24 year-old subscribers has the highest penetration rate for mobile tv and video usage, more than 2x national average (at 1.5%). That rate can only be higher if their barrier to entry (ie premium subscription fees) is lowered. So, double reasons for advertisers to subsidize content.