Video streaming enters the mobile realm: service providers focus on content to build new revenue base

America's Network, Dec 1, 2004 by Robert Poe

It's an image designed to warm the heart of the most hardheaded wireless service provider: live TV delivered to millions of handsets via streaming media, the ultimate application of the unwired age. For the customer, however, there is a variety of services and approaches that capitalize on the basket of technologies known as mobile multimedia.

Service providers need to listen closely to their customers, rather than to their own hearts, if they intend to build a successful mobile media business. Customers are still mulling their commitments to live TV over mobile phone. They are still evaluating the need for audio and video streaming. And they are on the lookout for useful mobile applications that could make the whole venture worthwhile.

Analysts are bullish about the future of mobile video, even if they are still uncertain about how the business model will play out. Strategy Analytics predicts that the global market for mobile video content will reach $4.6 billion by 2008, with mobile music sales reaching $2.2 billion. But the firm's numbers include both streamed and downloaded content, with streaming representing a relatively small fraction of the total. Operators' thinking should be similarly cautious about mobile multimedia of all types.

That includes audio. While mobile video is the star of wireless multimedia, audio--that is, music--may offer more tangible rewards. "On a worldwide basis, one of the biggest multimedia applications on phones is music," says Joel Espelien, vice president of strategy for PacketVideo, which supplies multimedia software for mobile handsets.

And streaming isn't necessarily the audio delivery system of choice. "For music, one of the very successful paradigms is to download it and have it on your device," says Espelien. Think of it as the cellular iPod model. A handset with 256 megabytes of memory can hold a couple of hundred songs, he notes--plenty for a lot of people, especially if they don't want to buy or carry two devices when one will do.

That's not to say that streaming has no place in music. Using streaming or progressive downloading (pseudo streaming) to the handset can create a radio-like service, Espelien observes. This approach is becoming popular in Europe and Asia. And it is increasingly relevant in light of expectations that satellite radio may pose a threat to portable music players. But streaming songs to mobile handsets remains the exception rather than the rule.

VIDEO STREAMING

Video is more likely than music to involve streaming, but there are still significant exceptions. Two basic types of services send video data to wireless handsets. The first is one-way service, delivering commercial video content from service providers to users. The second is two-way, sending video from user to user. Either type may or may not use streaming.

Mobile television, such as the appropriately named MobiTV service available to customers of Sprint and AT&T Wireless (now Cingular), is the highest-profile example of one-way video. MobiTV uses streaming technology to deliver commercial television programming, such as news, sports and weather, live to users.

Although offerings like MobiTV essentially repackage broadcast and cable TV programming, there's plenty of room for customizing specifically for mobile customers, according to Clint Wheelock, an In-Stat/MDR analyst.

"There will be a snack-TV approach," he says. "Mobility adds to people's flexibility. They're not going to watch a half-hour sitcom. They're going to watch five or 10 minutes of sports or news." In-Stat/MDR expects the number of mobile video subscribers to reach 273,000 (out of 165 million total wireless subscribers) by the end of this year, to exceed 1 million next year, and to level off at around 22.3 million (out of a projected total of 207 million wireless users) by 2009.

As with music, there's a non-streaming counterpart to mobile TV. Cinema Electric, a Southern California startup, creates original video and other content that users can download the way they do ringtones and wallpaper. Targeting a youth audience and emphasizing fashion models and sports, it distributes eight channels with names like Electric Catwalk, Movie Messages, PocketGirls and Sports Action. The video clips and animation usually amount to no more than 90 kilobytes, according to founder and CEO James Robinson. That means they can download to phones quickly.

And there are other alternatives as well. RealNetworks, for example, offers news, sports, movie trailers and weather via Sprint PCS and AT&T mMode, which it streams to handsets on demand via short clips (rather than live.) There is also a less-advertised form of wireless video multimedia: The Yankee Group estimates that the U.S. market for wireless adult content will reach $90 million by 2008, with a global market of $2 billion. Such content can include both still pictures and video, which can be downloaded to handsets by accessing WAP sites.

Two-way video between users may or may not require streaming. Video messaging, for example, can run over existing non-streaming technology such as multimedia messaging service (MMS), which lets users create, send and receive messages that include text, audio, graphics and video. But other services will happen in real time, such as mobile videoconferencing. This is what David Chamberlain, principal analyst of Alloy Research, calls "look where I am." The latter involves "waving the camera around" to show a friend what the user is seeing at the moment. Such live services will require robust streaming capabilities.