As companies pour millions of dollars into mobile TV and video, one of their sustaining beliefs is that users will pay subscriptions for these services. I guess that they’ll happily take advertising dollars if they can find any takers, but this is being seen as icing on the cake, not the business model.
So I was interested to read about a speech this week, by Chuck Porter, advertising veteran chairman of Crispin Porter + Bogusky, which if you extrapolate his point is potentially worrying for the nascent industry.
Porter was talking in the context of subscription based TV and radio shows (ie not mobile). Specifically, that while viewers love the idea of commercial-free programming, when it comes down to it, they won’t pay for it – or will pay very little. This is based on extensive research by his agency.
“Every focus group we have had, people said, ‘We don’t want commercials on the radio; We will pay to not have commercials,” he said at the Summit held in New York. “But they wouldn’t, and they didn’t.“
Now, while it could be argued that I’m comparing apples with penguins here, it’s not so very different. The bottom line is how much people value this type of content. In both scenarios they’re being asked to pay for a service that they’ve come to believe is free and if they’re not prepared to pay for something they already see/listen to, why would they for pay for it on a new channel?
There is a prevalent myth that users are prepared to pay for anything on their mobiles that they get for free elsewhere. But I think we’re going to see that myth exploded in the Mobile TV arena. If it survives as a product offering, I reckon it’ll be bundled in with a bunch of other stuff and sold as an all-inclusive premium package. Either that, or end up being just a cost of service of being an operator.
—–>Follow us on Twitter too: @russellbuckley and @caaarlo
