This month Howard Greenfield begins a regular column on the evolving digital media market. Howard's combination of technology development and journalistic background provides unique insight on an increasingly important state of the art.

Last year, total MP3 player sales reached $4.23 billion. Half of all US teens now own a player (with video capabilities increasingly becoming the norm). And of the two billion cell phones in use world wide, 236 million now contain 3G technology enabling video playback.

Can you say mini media market? Well, it may not be so mini.

As Mark Twain observed, there are lies, damn lies, and statistics. But timing is everything. You may recall the sound of an economic bomb hitting around the time of the millennium. It came in the form of massive bets by mobile operators worldwide playing to sew up the 3G spectrum for mobile video and rich media. The likes of Hutchison, Vodafone, Deutsche Telekom, Telefonica and others paid dearly. These organizations hoped to jump the biggest communications market of the new century.

A few years on, and they have collectively written billions of dollars off their balance sheets as the dream of cellular, always-on, broadband mobile dimmed. 3G turned out to be a premature technology that may have many of its sexier functions superseded by wireless networks. Maybe we'll see 3G and other wireless platforms complementing each other. Or perhaps we'll get a type of "intermodal competition," as the FCC puts it.

But listen. Is that the ka-ching of a new market? Consider the relentless surge of devices coming on stream—cell phones, iPODs, Blackberries—all accompanied by interactive subscriber services. Just an expanded media products market, or a whole new way to reach consumers?

The trend from centralized communications and advertising budgets to multi-platform viral messaging and niche marketing has been kicked off by the Internet, TiVo, and mobile devices. TV advertising benchmarker Nielson announced that it is changing its entire rating regimen with its "A2/M2" initiative (anytime anywhere media measurement) that will track any portable or wireless media constituencies. Welcome to the commercial age of mobile media. Apple's iPod, Creative's Zen, and the Motorola Q aren't just changing the way media is marketed, they're part of an evolutionary role in making mobile video the next cool marketing tool.

Mobile content is getting a lift from many directions. At MIPCOM in Cannes, France, last year, the Mobile TV Screenings & Awards attracted 235 innovators from 135 companies in 30 countries. "We had participants ranging from big broadcasters to small mobile-content companies," stated Mark Selby, Global VP Multimedia at Nokia, who says "good content travels across platforms."

Mobix Interactive CEO Matt Heiman told me that mobile is becoming a reality as "Disney, Fox, and the rest of the large media groups are entering the space." This year, a Netherlands company won the inaugural Cannes Lions Young Creatives Film Competition for which entries were filmed on the new Nokia N93 mobile video device.

Of course, everyone would like to trend-spot for mass consumer mini-video uptake. The billion-dollar question is, What does the public want and what will they pay for video on mobile devices?

"It's still expensive at ten and fifteen dollars a month," according to Tole Hart, Gartner Mobile and Wireless Research Director. But Hart has pointed to forward movement as "Verizon VCAST [costing about $15 per month on top of existing voice plans] and Sprint each have several hundred thousand subscribers. There's a magic threshold of cost for consumers, and Verizon's $99 EVDO CDMA phone offer has boosted subscriptions." And MobiTV and Handango just announced mobile access to Discover Channel, ESPN, ABC News, Fox Sports, and others for $10 a month. The growth, as Hart puts it, will "begin with most consumers using mobile video for snacking and short intervals."

Content providers are avidly pursuing the key to market entry and traction. "We've spent the better half of the last year trying to develop a strategy for how mobile video fits into all the other areas we've already developed: interactivity, ring tones, games, and now video," says Bruce Gersh, senior vice-president of business development for ABC Entertainment. "Clip-casting is what we call it."

Another key ingredient is the editing of video content for a small screen. The service provider will have to give as well as take. "We have to earn our value in the future," says Jim Ryan, VP of Consumer Data Services at Cingular Wireless. "We can't just put up the toll bridge, we need to add value." Is it possible to predict when mobile video market adoption could drive a business model? For years many pundits said was a dead end, doubting a 2-inch screen could ever hold anyone's attention.


Along comes Apple Computer with a video-capable iPod. Wow! It's the psychology, stupid! At its launch, Apple CEO Steve Jobs revealed the stealth behind the idea: "because millions of people around the world will buy this new iPod to play music, it will quickly become the most popular portable video player in history."

The beauty of the new device, as the Wall Street Journal has pointed out, is that video appears to be a bonus. That is, Apple's device is still called an iPod, not iPod Video. So, video is an insanely cool extra. As long as you can focus your concentration on this small screen, you can watch video from a foot away on the go. But keep your eyes on the road. Please.

The elegant consumer experience Apple delivered with the iPod device and iTunes service should eventually ready the collective inner couch potato consciousness for mini-video. Mobile video delivers compelling news, sports, and business information in real time—without a rendezvous with your living room TV.

Will we all watch postage-stamp video? And will it one day hijack the broadcast industry through highly available, affordable TV programming? Maybe. What the broadcast industry fears most is a "napsterization" of video content. Some ABC affiliate stations have already objected to Apple's offering prime time TV such as "Lost" and "Desperate Housewives" because it could undercut their market.

I've been scratching my head like everyone else at the statistics: On paper it would seem very few mobile phone users (around 5%) rank watching tiny, portable cell-phone TV or movies as very important, according to eMarketer. But consider the paradox: eMarketer also reported that revenues from mobile video will increase a whopping 2200% between now and 2009.

Still, the precedent for technology bursting onto the mass consumer market is well established. To what degree is it the new way to reach consumers? "We're basically trying everything is the simplest way to put it," says CBS President of Digital Media, Larry Kramer, who adds: "we're trying to put all our entertainment content on many platforms to see how consumers accept it." With analysts predicting 102 million mobile TV broadcast subscribers worldwide by 2011, the bullish scenario becomes persuasive.

What's your take? If you have your own ideas about the shape of things ahead for mobile video or digital media—or can make any better sense of the endless projections—send me your thoughts for the next column. Your insight on this magical threshold is welcome.

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Howard Greenfield is principal of Go Associates, a consultancy that develops and implements high-tech product marketing and business development strategies. He is the creator and former manager of Sun Microsystems's first Media Lab. He can be reached at