One of my theories, going back some time now, is that audio and mobile would make much more natural partners than the rather contrived experience of mobile and video. Here’s something I wrote back in 2004 about it and I think it’s stood the test of time very well. Not only did I point out that conventional broadcasting wasn’t going to work (although shorter clips might – don’t forget that this was even before the launch of YouTube), but that the mobile might in fact presage the coming of a new golden age for radio and audio.
Several pieces of news arrived this week that seems to indicate that this was along the right lines.
Mike Masnick at Techdirt writes in his own inimitable style that despite billions of dollars invested so far, conventional mobile TV has achieved very limited traction, even in Japan and Korea – markets which are often cited as pointing to the future.
In fairness to the executives making these investments, I think it was something they probably had to try. Explaining why you’ve decided to ignore what your competitors are hyping as the next big thing is never going to be easy, so the temptation is to go with the flow and follow the market. This is a common paradigm and one that’s responsible for bazillions of lost dollars over the years.
Having said that, most conventional broadcasters have tried to sell mobile TV as a subscription model, which was always going to be ambitious. Its only hope, in my view, is to offer it as a free bundle with the operator’s package and that means that it’ll have to be ad-funded.
eMarketer has been looking at exactly that, this week, with several analysts getting out their crystal balls and doing some future gazing. The current view seems to be that the lack of take up has more to do with a poor user experience, which has certainly played a part, but I would argue that the price issue above is much more relevant. But now that the technology has been cracked, the forecast is a $3.7 billion market by 2011.
Hmmm….I don’t think so. User experience might be considerably better (video on the iPhone is certainly very acceptable, without being “great”, even in comparison to a PS2). But even when this hurdle is jumped, we’re still left with a fundamental problem of what the format is going to be. There’s a lot of choice, ranging from running ads alongside content to pre- and post-roll ads within the video. The trouble is, they don’t seem to work very well to date, certainly on a consistent basis. The mother of video sites is obviously YouTube and Google confesses quite openly that they have no effective advertising business model yet, despite having significant costs to cover with all that bandwidth.
Indeed, some are saying that video is always going to be a service, as opposed to a profit centre, which doesn’t bode well for that sector. This might be wrong and new formats may emerge, but if you think that Google must have poured a lot of resource into this area, with very little to show to date, there must be some some worry about the future.
The final little bit of news I noticed is that Pandora, the internet radio service/music recommendation engine, now available as an app from iTunes, will shortly be installed on over 1,000,000 iPhones. And since it only works in the US (according to the message on their website when I tried to access it from Germany), this is even more impressive.
OK, Pandora is free to download and we don’t know how many of these people actually go on to use it. But it does suggest pretty serious interest in audio.
Clearly, we don’t live in a binary world and there may be success stories in both mobile video and audio. But if I had to place a bet to pay off in the next 5 years, my money is on audio any time.
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