The economics of mobile programming

Oct 6, 2009 4:53 PM, By Carolyn Schuk

             

SNL Kagan's report "The Economics of Mobile TV" confirms that most programmer-generated video revenues are coming from upfront lump sums carriers pay for on-deck carriage, like those to well-known brands ESPN and MTV who dominate the market.

But many TV programmers offering repurposed content are also making money because they avoid most program production costs. Of all U.S. mobile programmers earning more than $3 million in mobile video in 2008, only three — GoTV, MobiTV and Viva Vision — don’t have established cable or broadcast TV businesses.

Exclusive-to-mobile content is a route some programmers are experimenting with, Kagan reports. Because it lacks the day-one profitability of familiar repurposed content, some mobile start-ups will be looking for venture capital to explore this avenue. A hybrid option is re-editing or repackaging that content to better fit the teenier mobile video screen, by using more close shots and brightening the video.

Across a range of business models that vary depending on whether the deal is with a carrier (on-deck), an aggregator or via a programmer’s mobile WAP or HTML Web site (off-deck), the cable TV hybrid model of affiliate fees and advertising-revenue shares dominates. Nonetheless, SNL Kagan’s researchers see small audiences and smaller advertising figures as a driver for the evolution of unique mobile business models.

For instance, Transpera, Rhythm New Media and MyWaves have all recently gained key content partners with a business model that simply splits ad revenue (typically from video prerolls) with content owners. All three services can deliver specific ad-viewing statistics as detailed as Internet advertising provides.

In the future, Kagan says that off-deck services — HTML or WAP sites accessed from the Web — will grow more important as networks open, 4G rolls out and iClones appear.




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