Cell Phones Channel Energy On Mobile TV

By RICHARD MULLINS The Tampa Tribune

Published: May 8, 2007

There's a new TV broadcaster in town, and it's aiming to put TV shows on that cell phone in your pocket.

No. 2 U.S. cellular firm Verizon Wireless this week launches a new kind of TV on cell phones in Tampa that offers a range of live TV channels such as Nickelodeon, Fox News and ESPN.

Unlike other cellular companies that mainly offer short video clips or specialty shows, Verizon lets customers tune into a channel and watch it live. The new phones even have traditional telescoping antennas to receive broadcast TV from Verizon.

"If you're a parent with screaming kids in the car and you want to put Nickelodeon in front of them for 30 minutes driving, now you can," spokesman Chuck Hamby said.

Verizon's is the latest move in a fast-developing market for TV on cell phones, with major providers such as AT&T/Cingular and Sprint launching cellular TV and cutting dozens of deals with Hollywood to broadcast TV shows.

"For cell carriers, this makes tons of sense because they do not want to be relegated to being just dumb pipes for calls," said Kanishka Agarwal, a vice president at market research firm Telephia. "For Hollywood, this new platform of cell phones is just gravy on top of all the investments they've already made in big brands like Spider-Man or Ellen DeGeneres."

Cellular video in general is already a fast-growing hit with customers younger than 36, and 6.2 million total customers nationwide have signed up for cellular video - up 250 percent during last year, according to Telephia. Some cell phone companies have gone so far as to produce their own shows for the small screen. And Sprint has started a "pay-per-view" movie service showing full-length movies such as "Scarface" and "Spider-Man 2."

The Market

Cell phone companies don't expect customers to ditch their big HDTVs at home in favor of watching TV on the small cell phone screen.

Rather, putting TV on phones is simply too irresistible for companies. "People are so attached to their cell phones now that it's almost like underwear - if people leave the house without it, they go running back," Agarwal said.

With such a large and captive market, cell phone companies are betting that TV on cell phones will evolve from the realm of niche technical oddity into the American mainstream - just as happened with DVD players in cars or digital music downloaded to media players.

Toward that end, this year has seen a flurry of cross-platform deals between media and cellular companies. For example, this week actress Leah Remini who plays the harried "Carrie Heffernan" on the NBC show "King of Queens," announced a new motherhood-themed "mobisode," or mobile episode, for Sprint cellular TV and appearances on the Ellen DeGeneres Show.

Sales pitch

Cell phone companies are investing billions of dollars in equipment and content to transform themselves from simple phone companies to multimedia entertainment and data providers - more like a Hollywood production company that uses phones to reach customers.

Their goal is to make the cell phone people carry into a do-it-all device that helps customers connect to the Internet, watch TV, capture and share video, get directions, make purchases and - by the way - make phone calls.

As with most technology trends, young customers are leading the way. Market research firm Forrester Research recently found that 78 percent of cellular subscribers between 18 and 26 use data services to send text messages, share videos and surf the Internet. The older users are, the more likely they are to use the phone only to talk.

Customers, meanwhile, can expect cell phone companies to tout TV ahead of other services.

Verizon already promotes its video services on many TV commercials, and Cingular is retraining all its retail store staff nationwide to showcase TV on cell phones.

Verizon's Plan

Florida is one of Verizon's most important markets nationwide, and the company launched this new service in three Florida cities (Jacksonville, Orlando and Tampa) before approaching larger cities such as New York.

Verizon's TV service most resembles simple broadcast television and doesn't eat up a customer's cell phone minutes or Internet data plan.

Most current TV on cell phones works similar to video on the Internet - where customers dial up short, pre-recorded videos from a certain channel, like a 3-minute video from Nickelodeon. Those viewings generally count against a customer's cellular minutes or data plan.

Verizon has some videos that work that way. But the new system starting in Tampa this week avoids that problem by broadcasting signals to an entire market. The phones simply dial into a certain channel to start viewing.

To launch the system, Verizon purchased the rights to use an existing UHF channel in Tampa, converted it to digital signals, and now broadcasts about a dozen channels. Phones merely need to receive the signal to start displaying the picture.

Phones that carry the new service cost between $150 and $200 after rebates, with TV plans costing an additional $13 to $25 per month.

To be sure, cellular TV has a long way to go before becoming mainstream, Agarwal said. Price is the main barrier.

Right now, most plans cost an additional $20. The challenge for cellular companies, Agarwal said, may be lowering prices for cell TV to the point where more customers sign up, and many are cutting deals with advertisers to play commercials before or within cellular TV shows.

"Most people want to spend no more than $40 to $50 total on their cell phone," Agarwal said. "This adds another $20 or so, so the challenge to it becoming mainstream is that it's still a fairly expensive service."

Reporter Richard Mullins can be reached at (813) 259-7919 or rmullins@tampatrib.com.