US mobile video too expensive
US operators need to lower the pricing on mobile video services before it becomes a ubiquitous practice among users. So says the NPD Group, a US consumer and retail information company, in its latest report.
According to NPD’s Mobile Video Report, consumers who subscribe to video on their mobile phones currently pay an average of $10.70 (ВЈ6.00) per month for the service. But when queried on price sensitivities, consumers who had considered subscribing to mobile video said they would be willing to pay between $6.50 and $8.50 for a monthly subscription.
By comparison in the UK, mobile operators 3 and Orange offer a mobile video service for ВЈ10 per month. Both operators pitch the service as mobile TV, but both offerings are actually a series of channels each delivering an hour of looped content per month.
Indeed, other research shows that European users may be willing to pay more for mobile TV services than their US counterparts. Trials carried out last year in Finland claim that consumers are willing to pay between Eur5-10 (ВЈ3.50-7.00) per month for the service. Meanwhile, UK broadcast transmission firm Arqiva said its own surveys showed that a number of potential users would be willing to pay ВЈ7-10 per month.
In the US, mobile TV could also be a driver for the adoption of mobile video. The NPD research found that both current users of mobile video – 77 per cent – and those who intended to subscribe to it – 69 per cent – were interested in watching live TV on their mobile phones.
“Many consumers are calling for live TV and lower pricing before they’ll start watching video on the smallest of screens,” said Drew Hull, research director for mobile content for The NPD Group. “But considering those that are likely to use it, namely, high-income, young-adult wireless subscribers, it might serve the industry well to lower the cost barrier in order to reach more of this lucrative market.”
NPD suggests that while 28 per cent of all US mobile phones in use in February 2006 were capable of playing digital video, only one per cent of subscribers used the function. However, the research goes on to suggest that 12 per cent of wireless subscribers said they were “likely” or “very likely” to use mobile video in the next six months.
The report notes “very positive” usage behaviour among those who do use video on their mobiles with 51 per cent of that group doing so at least once a week.
“Premium services for mobile phones have only recently become big business, but video has a way to go before consumers are ready to sign on in a big way,” said Hull. “At this point, it’s especially important for wireless operators, service providers and video content companies to understand the mindsets of mobile phone users if they want to position themselves well for future success in marketing video for mobile phones.”
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Tags: 3, Entertainment, Mobile TV, Orange, Premium Services