Cable TV on Cell Phones, IDC Predicts

Online staff -- Electronic News, 4/18/2005

The latest wireless networks and technologically advanced wireless devices will make it possible to view commercial video and TV content services that market researchers at IDC anticipate will be used by more than 30 million U.S. wireless subscribers by 2009.

For these commercial video and TV services to be adopted, mainly by youths and young adults, subscribers first need cell phones or other wireless devices that support these features, the Framingham, Mass.-based firm pointed out.

Digital rights management and ease of use for media player applications will be key issues to be worked out as the market takes off.

“Although there are substantial challenges facing the commercial video and television marketplace from a network, handset, and content perspective, which will serve to keep penetration levels relatively low, IDC anticipates that annual revenue will still top the $3 billion mark by 2009,” said Lewis Ward, senior research analyst in IDC’s wireless and mobile communications program, in a statement.

“With an average revenue per unit [ARPU] approaching $10 per subscriber per month by that point, commercial video and television may well emerge as the single largest cell phone-oriented ARPU driver among consumers outside of voice,” he added.

Until mid-2006, mobile video and TV content is likely to be delivered over existing 2.5G and 3G carrier unicast cellular networks. But broadcast/multicast networks from Crown Castle Mobile Media and MediaFLO USA are expected to emerge in the latter half of 2006, expected to change the competitive dynamics in the marketplace, IDC said.

While wireless video/TV over cellular-enabled devices is showing promise with early signs of growth, IDC believes network services must be designed to better streamline the activation and on-going use of video/TV content and live TV. For instance, a hybrid delivery model that supports live TV and video content as well as on-demand clips is likely to be the most effective long-term approach.

The total number of minutes of commercial video content consumed -- including transaction-based a la carte content purchases, 2.5G and 3G subscriptions, as well as emerging broadcast/multicast subscriptions -- are expected to more than double annually between 2004 and 2009.

Finally, IDC anticipates the total volume of minutes consumed to rise into the tens of billions by the end of the forecast period with 2.5G and 3G unicast subscriptions remaining the bedrock of usage and revenues.