Panel examines how stations can profit from the rapidly growing number of wireless video subscribers.
With video programming moving quickly into the portable mode, NATPE’s Mobile++ program in Las Vegas brought attendees up to speed and attempted to answer the question of how TV stations can profit from the phenomenon.
Official attendance was 700 people, although there appeared to be fewer than 500 in the Mandalay Bay ballroom where the event was held. By show of hands, 80% said they were attending Mobile++ for the first time (this is NATPE’s third annual gathering). About 30% identified themselves as “traditional buyers and sellers of programming” and 10% or so said they were “international attendees.”
The first panel, “I Will Take My TV to Go Please,” focused on growing trends in streaming news and entertainment.
Dan Cohen, senior vice president/GM of pay television for Buena Vista, emphasized that the business was not yet profitable enough to support ambitious production—a theme echoed by others on the panel. He said that Disney justifies production of special Lost mobile content because they can use it again as a video “extra” for the DVD.
Cohen said Buena Vista uses mobile video as a means of extending brands, an especially attractive prospect when production costs are low, as in repackaged movie reviews by Ebert & Roper.
Cohen said creative business models are also key to profitability, likening mobile video to satellite radio which avoided expensive content deals with brand names like Comedy Central, opting to create their own comedy channels that have proven to be popular and lucrative.
GoTV COO Thomas Ellsworth compared mobile TV today to the first Christmas season that DVDs were available. Acceptance was slow at first, but by their third Christmas season, Blockbuster had replaced its VHS tapes with DVDs.
But make no mistake, there’s big money in these subscription fees. Verizon reports more than 700,000 video subscribers already, and expects to reach over a million by mid-2006. In his keynote address, Dan Novak, vice president of programming and advertising for QualComm MediaFlo, did the math. They project as many as 20 million monthly subscribers. If they each pay $10 per month, that’s a $2.4 billion annual business and worldwide estimates reach as much as $27 billion.
So how will local stations get a piece of that pie? txtstation Global creates text message-based programming for local stations, most notably with CBS O&Os KCBS and KCAL in Los Angeles, which between them carry Lakers, Dodgers and other major sports franchises.
These mobile tie-ins are especially attractive to fast food sponsors who can respond to viewer text messages with messages that carry video discount coupons and other incentives to build customer traffic. It’s more challenging to develop sponsorships for clients like mattress discounter Sit & Sleep.
Jeff Proctor, KCBS producer and consultant, who heads business development for txtstation, reports that it took “15 months to get the KCBS sales department to [buy into] text messaging.” Once they did, they found it an outstanding value-added incentive for traditional media buys which is just now coming into its own as a stand-alone media product to offer to advertisers.
Fox Mobile Entertainment President Lucy Hood emphasized that interactive mobile media “touches viewers” in a visceral way that builds audience loyalty. The vast majority of viewers who use cell phones to vote for American Idol contestants, do so repeatedly—so often that the Fox hit has won a place in the Guinness Book of World’s Records for generating the largest number of live votes. Hood praised the medium’s ability to (automatically) respond to viewers messages.
However, cautioned KCBS’ Proctor, these “bounceback” messages better have some useful or interesting content, otherwise they’ll be perceived as needless spam and will only serve to annoy or anger viewers. In most cases, viewers pay the cell phone companies for the privilege of sending text messages to favorite shows at an average price of about 50 cents per call, but sometimes more.