On September 24th I moderated a panel discussion at Streaming Media West. Thanks to Dave Sloan of Avot Media for both attending our session and being inspired enough to write a summary of our discussion.

Last week at the Streaming Media West conference in San Jose, an all-star panel of mobile video thought leaders got together and discussed the current state of the mobile video market. Specifically, the panel addressed the business opportunity in the nascent mobile video Market.

The panel was moderated by Peter Cervieri, Director, ScribeMedia. Panelists included Kanishka Agarwal, VP, Mobile Media, Nielsen Mobile, Kelly Liang, Head of Mobile Partnership, YouTube, Hayle Chun, Director, Digital Media, NBC Sports & Olympics, Dorian Benkoil, Editorial Director, Teeming Media, and Jay Hinman, Director, Partner & Product Marketing, MobiTV.

This session gave attendees an insight into what is needed to drive consumer mobile video consumption habits in the U.S. What is driving adoption of mobile Internet usage, and what are consumers watching? What devices are most important to the business and why? What are consumers willing to pay for, and what are the advertising opportunities for mobile video? What is the state of the mobile video market?

Nielsen Mobile presented some data which confirmed that the market is still small at only 4% of US users trying mobile video in Q108. Among those users, the numbers skew towards Hispanics and younger users, but the trend is going more mainstream.

Kanishka Agarwal identified two distinct use cases to drive more mobile video viewing behavior; killing time and saving time. Both use cases involve the desire for instant gratification. Mobile video is inherently personal and available at one’s finger tips.

Clearly, WAP streaming is a big trend. On deck clients like MobiTV remain relevant, but more than twice as many users are experimenting with WAP streaming sites.
What trends are driving adoption?

Both NBC and Youtube have seen significant uptake of their recent mobile video initiatives; NBC with the Beijing Olympics and Youtube with on-deck applications on phones such as the iPhone and Nokia n95. Clearly, popular content like Olympic sports and convenient content provided by pre-installed applications are helping to drive adoption.

The panel also discussed other trends that may be driving adoption. Larger screen devices like the iPhone and the Sprint Instinct may be stimulating popularity of mobile video because the screen is large and more TV-like. The availability of live content may perk the interests of users as live access to their favorite content via mobile is convenient and compelling. Also, contextually relevant content is paramount, like news/sports/weather.

Making money in mobile video
On the topic of business models, the panel agreed that a mix of subscription / premium and free / advertising supported will be the key to a successful strategy. The two models are not mutually exclusive. Early in the game, it’s really difficult to measure ROI or success of a mobile video advertising campaign, so its important to experiment and improve measurement tools.

In mobile it’s often tempting to compare US adoption to Asia and Europe. These comparisons are misleading because the cultures are different, and carrier regulations are different. In some dense regions, for example, coverage is ubiquitous. There are also differences in user expectations. In the US, we tend to benchmark the video experience to our PC/broadband experience. In other markets, it may be the first time they’re seeing the web, so they are not disappointed by slow startup time.

Advice to advertisers
The panel agreed that today, experimenting with mobile video is all about brand impressions. It’s very hard to measure ROI or drive conversion. Youtube has seen good uptake of its mobile display ad initiative, but it is struggling to report accurate metrics to advertisers. The mobile market is clearly attractive due to the penetration of mobile devices and the inherently interactive advertising opportunities provided by mobile devices.

The bottom line for advertisers is to continue to demand measurement of your dollars spent. Many mobile video experiments have no past metrics to reference, so measure each effort you make as best you can to evaluate the return on dollars spent.

Barriers to adoption
In terms of barriers to adoption, it was unanimously agreed that price is the biggest barrier to adoption today. Users do not want to feel nickel and dimed by their carriers. They expect some level of content for “free,” i.e., included in a reasonable unlimited data plan. Others accept paying a small fee for premium content as long as the quality is acceptable, the content is relevant and fresh, and the experience is dependable.

Other barriers to adoption include device support, awareness of mobile video functionality, discovery of desired content, usability, and limited mobile software functionality. Today, limited content is available across a finite number of on-deck and off-deck channels, but there is no consistent user experience across all mobile devices.

Innovation drives adoption
Finally, the panel discussed how innovation could improve the user experience and drive adoption. Certainly, there is an opportunity for developers to create compelling video discovery models, backend transcoding and streaming solutions, and better device-side video capability. The mobile space is so fragmented that each user is bound to have a different experience from their specific device and network. There is an opportunity for the developer community to innovate the experience and reduce these barriers to adoption by providing video delivery tools that support all video enabled devices, improve video quality, and work over any network condition.

There were some questions from the audience about the complexity of transcoding and storing copies of the original video file to accommodate for all device types across all networks. The panel agreed that there is room for improvement in the workflow of hosting and delivery of mobile video, and that this is just one of the many problems holding back mobile video from reaching the mainstream today.
In general, the mood of the panel was optimistic. Content owners, research analysts, and mobile video channels alike are pleased with the progress made in mobile video in the last year. And, these thought leaders are certain that mobile video will grow in popularity across markets. And, as viewership grows, lucrative opportunities will arise for many innovative players along the wireless value chain.