Mobile Video: Popular but not Profitable

When it comes to the point of mobile advertising, there seems to be a gap between movie outfits and advertising agencies. Even though the mobile advertising market is growing rapidly (it is projected to reach $3 billion by the end of 2007), the major players of the advertising market are still focused on the $48 billion broadcast TV advertising.

Green Arrow failed to entice advertisers to support their six-episode phone series. Nevertheless Century Fox, Viacom’s MTV Networks and Sony Pictures are eagerly entering the market with their new programs.

While short multiepisode series are becoming quite popular with both mobile advertisers and customers, the profit of the segment is not that high. That’s why lots of studios who aim at immediate profit seems to be slow to enter the competition.

Many companies refuse to sponsor ads because the demand for mobile video is quite new and not highly developed. According to the Yankee Group, the number of mobile video users in the U.S. is around 5 million (10 times more than in 2004) but this figures are too small to draw in huge players.

There’s one more thing. A great gap exists between what the mobile users want to watch and what the companies charge.

Alana Muller, director of wireless data marketing for Sprint, said:

“It’s more like the Internet. People are going to want things for free. Studios will have to come up with advertising-supported business models.”

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