AvantGo/Sybase iAnywhere's product manager examines the current state of the mobile video industry.

At September's CTIA Wireless I.T. and Entertainment 2006 tradeshow, mobile video was on the lips of nearly every advertiser, carrier, device and software vendor in attendance. Mobile video announcements at the show were significant, ranging from the devices themselves -- the new video iPods, the BlackBerry Pearl and the Nokia E62 -- to parts and accessories like Nvidia's mobile graphic chips and Kingston's 1GB MicroSD cards for mobile phones. To top it all off, there were dozens of new services announced including Sprint's Made-For-Mobile video network and Real's RealArcade mobile content website, offering ringtones and casual video games.

The medium is perched on the edge of a massive surge as suggested by a recent report by Infonetics Research. Infonetics is forecasting that the mobile video market will jump from $46.2 million in 2005 to $5.6 billion in 2009. Think about that. That's an 11.997 percent jump in five years! Sounds incredible, but look at the success of YouTube, a company just 20 months old and recently purchased by Google for $1.65 billion. In August, YouTube garnered 23.7 million visitors, up from 19.6 million in June and triple what the site received in January 2006. Even more amazing is that until the Google purchase, YouTube wasn't even the most popular site for video downloads. According to eMarketer, in August, MySpace served nearly 1.4 million streams to U.S. users. Yahoo! Video ranked second with 823 million, followed by YouTube with 688 million. Google Video came in a far seventh with 102 million video streams. But clearly, Google sees something in the future of video, as evidenced by the purchase price of a company who has yet to make a profit.

With the mobile medium rapidly moving forward and as more and more devices that are video-enabled hit the market, it only makes sense that video is the next step for mobile. In fact, individual software programmers are already looking for ways to easily capture videos from the afore-mentioned providers for use on mobile devices such as iPods and smartphones.

However, while the buzz is big, the market is still somewhat nascent. 2006 marks the first time that such a plethora of devices capable of handling mobile video became readily available to the masses. Evolving mobile devices with high-quality screens, increased memory and storage and enhanced audio, camera and video capabilities are creating an improved user experience. Scan the news for the latest device announcements and it's easy to see where the focus is for handset developers. For example, take the new Nokia 6288 slider phone, available later this year. The new device is equipped with a 512 MB memory card and a QVGA 320x240 pixels, 262,144 color display. But the real wow-factor is that the handset comes with, both a 2.0-megapixel and a VGA camera, offering the capabilities to take traditional photos as well as share videos and participate in two-way video calls.

Although technology is improving, the majority of devices still owned by the average American do not support mobile video. JupiterResearch recently reported that only 11 percent of devices in 2006 will be video-enabled. For those devices that do support video, ease-of-use, screen quality, or power and memory capabilities may be low. Some, like mobile display technology vendor Liquavista, are arguing that even the latest and greatest handsets are still not yet up to par. Mark Gostick, Liquavista CEO, comments that today's mobile device displays can't be seen properly in normal lighting conditions. He feels that current displays take far too much battery power to make mobile video or TV appealing for users, and much less so for those who would need to subscribe to a service. 

"Who wants to have to hold their hand over a screen to block out the sun while they watch the lunchtime news?" asked Gostick. "I'm sure that TV on mobile will be a great success and a real boon for subscribers… just as soon as the displays on mobile devices can actually handle it."

As for subscribing to a service, in May 2005, JupiterResearch conducted a survey of online consumers and found that 44 percent are interested in viewing mobile video with their mobile phones for free, but only 19 percent indicated they would be willing to pay for those services. The report cited several reasons including: lack of network coverage, high prices for both handsets and data service, and limited access to real time content. This year, a similar study was conducted, "Video on Cell Phones," but the numbers are vastly different. According to the new study, 25 percent of consumers are interested in watching video on their cell phones, with live TV topping the list of preferences, however only 1 percent of mobile subscribers will pay for a subscription this year.

Note that the survey was for cell phones and didn't include other forms of mobile devices such as PDAs or portable video players like the iPod and PlayStation Portable. Adoption of video is bound to be higher on those devices due to the larger screen size and storage space, longer battery life and friendlier methods for downloading and managing videos.

It's curious why the numbers would be so very different from one year to the next. Why are there less people interested in video in 2006? Several factors could contribute to the discrepancy, including the distribution of video-capable devices, which did not emerge as quickly as some may have expected. The handsets that are available now have very limited memory. Viewing live TV is difficult on those devices when the content or high-speed networks aren't readily available. And, when it comes down to subscriptions, it could be that consumers feel saturated by the number of subscriptions they currently maintain. It's the ideal marketing model, securing customers that keep paying for their services, over and over. However, there is a threshold for acceptance and many consumers are fed up and refusing to subscribe to yet another service when they would prefer one-time payments.

While we aren't quite there yet when it comes to the viability of mobile video, we're close. The announcements made at CTIA made that very clear. Carriers are intent on expanding 3G networks. Device manufacturers are beginning to place a higher priority on delivering devices that cater to video and other forms of rich media. Content providers are realizing the power of video and have begun taking steps to deliver services that give consumer access to growing libraries of television, music videos and movies. Over the next year, technology will further improve, networks will be faster and more reliable and the prices for video-ready mobile devices will begin to even out, bringing in more and more of the mainstream market.

Next month I'll talk about how advertisers and marketers can establish an early foothold in a mobile advertising market that Informa Telecoms & Media predicts will reach $11.3 billion by 2011, with $4.4 billion in advertising on mobile TV.

Crystal King is senior product marketing manager at AvantGo. Read full bio.