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Unveiling the 'fourth screen': mobile video all set to go - report

December 1, 2003

Expect plenty of action around mobile video in 2004. Operators need to find a role for to mobile video services, the fourth screen after TV, cinema and the PC. There is still plenty of uncertainty on how to shape this new medium. Dario Betti, senior analyst at Wireless Multimedia, advises players to launch video services in 2004, and gain valuable experience quickly.

Video will be a priority for mobile operators in 2004. 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. Operator focus is still confused: most of the efforts have being on tweaking technologies to make it work and not in creating services. That's why operators will be busy learning and testing video services next year.

Mobile video is set to become a 'fourth screen': after television, cinema and the PC a new platform is taking shape. However, the role of mobile video is far from clear. The industry is going through it 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. Mobile networks need to find an alternative role for mobile video, a copy of an existing service will be of little interest.

The good news is that operators can afford video. The cost of launching video is not prohibitive; operators should start with applications supported by their existing network, and then add advanced video services once migration to 3G networks starts. Capital expenditure for video services is moderate, partly due to previous investments in data services. 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. We expect a return on investment in 3-4 years from launch.

Operators should start with a combination of communication and content services. The first application to launch is video messaging: it is a straight evolution of picture messaging. Video messaging revenues will be noticeable in 2004, generating $650 million world-wide in revenues. Video alerts are also important. Some of the existing users of sports and trivia alerts will find improved video based service more appealing. The mobile handset has already proved itself a good platform for personalised delivery of last minute information and SMS-based content, video should simply increase the range of services available. The launch of video telephony is pegged to 3G networks, and we should see more of those by the end of 2004.

Only after 2004 should operators launch other more 'exotic' applications: such as push to show, see what I see, and video personalisation: learn to walk before you run.

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 5 years.

 


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