Next year will be a year of action in the world of mobile video content, as the platform becomes the fourth screen after television, cinema and the PC. This is according to Dario Betti, a wireless multimedia senior analyst at Ovum.
Betti says that video will be a priority for mobile operators in 2004, although they will not yet generate substantial revenues. “Let’s be clear: if you are looking for a great revenue generator in the medium term, you should look elsewhere. Nevertheless, video is set to become an important element of data services, but one about which operators know remarkably little right now,” he says.
Ovum says that most efforts have so far been concentrated on tweaking technologies, rather than creating actual services. Next year, they are expected to begin testing services in earnest. Whilst the group believes that mobile video is set to become a ‘fourth screen’, it says the role of the service is far from clear.
“The industry is going through its first faux pas: pitching mobile as new television. Many operators have already fallen into the same trap. For instance, TIM in Italy is currently pushing live television programmes services to its users. However, television already exists and broadcasting media are in a better position to deliver them cheaply and more effectively.”
Ovum advises mobile networks to find an alternative role for mobile video, as a copy of an existing service will be of little interest.
The good news for operators is that the cost of launching video is not prohibitive. Capital expenditure for video services is moderate and mobile video can generate cash. Despite its relatively small contribution in terms of revenues, video has a good chance to self fund its deployment and start to generate some profits over the next five years. Ovum expects a return on investment in three to four years from launch.
“The outlook for the introduction of video services is favourable, as long as operators keep their expectations under control. By now it is widely accepted that video is not a saviour: video alone will not fund the rollout of 3G. But video will bring some additional revenues and add to the bottom line within the next five years,” it concludes.
