The Small Screen Gets Smaller

Hoping to expand services among U.S. cell phone subscribers, wireless operators are pushing bite-size videoclips and live television programming for the handheld medium.

Faster networks, more media-capable handsets, and a growing range of content developed or modified for the super-small screen are coming together to make video and television on the cell phone a better proposition.

Under pressure to raise wireless data usage among U.S. subscribers, as competition increases on basic voice rates, carriers like Sprint PCS and Verizon Wireless are looking to these new cellular television services as a way to boost data usage, by appealing to consumers' seemingly undying love of television. 

Video programming has already been available to some cell phone users for a couple of years -- Sprint introduced 1KTV, its first, elemental service in February 2003. It allowed customers to watch news, weather, and sports updates in a format akin to a PowerPoint presentation coupled with streaming audio.

But it's only in the last few months that the move to higher-speed networks -- like the Evolution Data Optimized (EV-DO) wireless radio broadband being adopted by many CDMA-based carriers in the United States and other countries and the availability of phones that contain built-in multimedia players -- together are creating a viewing experience that's considered worthwhile. That improved speed and picture quality, joined up with wireless providers and third parties cultivating made-for-cell phone content, is creating more marketable services -- at least for early-adopter consumers.

"It's still very early days, but so far the advances in technology have born out our hopes," says Dr. Phillip Alvelda, chairman and CEO of Idetic, a Berkeley, CA-based company that owns MobiTV, a network that delivers live television programming and on-demand multimedia content to phones. MobiTV first came to market through a deal with Sprint in November 2003, and since then has added relationships with Cingular Wireless and regional carrier Midwest Wireless. 

While the technology and content are still nascent, television and video services to cell phones are increasingly seen by carriers as a way to boost data plan sales and potentially differentiate their services from the competition. Richard Bennett, CEO of SmartVideo Technologies, a Norcross, GA company that licenses, packages, and distributes televised cell phone content to consumers, estimates that top carriers are getting about four percent of their sales from data plans -- a paltry amount compared with carriers in Europe and the Pacific Rim, where data use is already flourishing. Today, with increasing competition on voice plan pricing, margins are getting tighter and carriers are eager to drive up the percentage of their sales from data into the double digits.