The Small Screen Gets Smaller

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Indeed, the quality of programming that's available will likely be an important selling point for cell phone-based video and television services, as the image quality improves. But customizing content for a 2-inch-by-2-inch screen is no small feat -- from both the legal and development standpoints.

According to Knoop, more television producers are getting wise to the growing opportunity of "cellevision." They're making more of an effort to produce programming that's tailored to the tiny screen, for example, by getting more close-ups on commentators and players when covering a sports event, since wider pans don't show up well. That means not only developing different formats, but also expanding contracts with news and talent guilds, to ensure that content can be displayed legally on the new medium.

Beyond the broader issue of what consumers will want to watch, there's the more immediate issue of how many consumers will be able to access these video services on their cell phones. Right now, only a handful out of the 50 or so phone models that Sprint offers have media player capability, and thus can receive its high-end Sprint TV service. Similarly, only four of Verizon's 20-plus phone models can carry VCast. (Neither Knoop or Bloom would comment on how many of their subscribers actually have these newer, more costly phones.)

"There are only a limited number of handsets that can deliver a satisfactory experience right now," says Mike Bloxham, director of testing and assessment for the Center for Media Design at Ball State University in Muncie, IN. "It's not till we get to a wider penetration of the ‘uber-handsets' with greater capacity and media players…that this market will grow." 

Bloxham also agrees that cost could be an issue -- even for media-loving Americans. But subsidizing the cost of these services by pushing advertising on consumers, he points out, may prove even more unappealing to would-be users, since "cell phones are considered a very personal form of media… reactions to unwanted SMS or IM messages have proved very hostile indeed."

Playing to such a select market, with a relative pricey service will likely limit the adoption of these services in the next few months, says analyst Hyers.

"Most customers nowadays want to buy a plan and get a phone for free," Hyers says, adding that many of the new multimedia phones come at a higher price point. "And, with the cost for the service being $10 to $15 a month…that could increase a [subscriber's] bill by about 25 percent."

Karen Epper Hoffman writes about business and technology issues from her home in Poulsbo, WA.