You Don't Know It Yet, But You Really Do Want To Watch TV On Your Cell Phone

(From Cynopsis -- By Daisy Whitney)

Broadcast and cable networks better be pumping a lot of iron -- they'll have some heavy lifting to do when it comes to cell phone video.

Nearly every network is betting big on cell phone video by creating original short series or repurposing existing fare for the very small screen. But research indicates interest in and use of video on cellphones is surprisingly low.

NPD GROUP reported that as of February, 28% of mobile phones were capable of playing video but only 1% of customers used such services.

A report by POINTS NORTH GROUP also determined interest and use are low.

But a lot of smart people in the TV business are convinced consumers will watch video on their mobile handsets.

QUALCOMM alone has invested $800 million to deploy nationwide the technology for its so-called MEDIAFLO platform. Slated for an October debut, MediaFlo will deliver broadcast-quality frame rates for cellphone video.

Executives and analysts say most consumers don't yet know they want to watch TV on their mobile phones. Nor did they know they wanted to watch ABC's LOST or NBC's THE OFFICE on tiny screens before those networks took the ITUNES/IPOD gamble.

"If you show mobile video to people, they are going to be a lot more interested," said CLINT STINCHCOMB, Senior Vice President/New Media at DISCOVERY COMMUNICATIONS, which is launching a mobile video service in the third quarter.

TV executives are also basing their expectations on a number of expected market developments. According to mobile market researcher M:METRICS, the U.S. penetration of so-called 3G, or third-generation phones capable of delivering better-quality video than previous handsets, has risen from under 500,000 a year ago to about 4.8 million today.

Since U.S. consumers replace their cellphones about every 18 months, they will likely swap out current models for more powerful 3G phones.

Content providers also point out that they don't need everyone to buy into cellphone video. More than 217 million Americans have cell phones. If 5% of those signed up for mobile video service, the business would produce return on its investment, said CYRIAC ROEDING, Vice President of wireless at CBS.

"Anything above 10 million cellphone users is a big success," he said.

Perhaps the mobile bet is worth taking then.

After all, JUPITER RESEARCH predicts that mobile video subscribers will grow from 1% of cellphone users in 2005 to 5% in 2010.