Mobile TV Subscriptions "a Disaster," but Ads May Gain

On this blog I've been a big detractor of mobile TV -- the consumer pays subscription model that is. Mobile video viewing and usage will only go up but the prospects for charging people to watch shows on mobile devices will dim as they bump up against a wall of tepid or non-existent consumer demand.

Let me qualify this by saying that people may be willing to buy premium subscriptions that include TV as part of some larger offer (i.e., unlimited data). They may also pay for the ability to access events from time to time (e.g., world cup soccer). And in some cases they might pay their cable company some additional, nominal fee to get slingbox-like access to their TV on a smartphone. 

But the idea that millions and millions of users will pay $15-$30 per month more to get access to conventional TV programming on the small screen is not going to happen. Carriers that had been counting on developing a healthy additional revenue stream from TV subscriptions are not going to see big dollars, pounds, euros emerge. 

This quote from a recent Reuters story about the state of mobile TV sums it up:

"It is a financial disaster," said John Strand, a consultant who has followed the mobile [TV] industry closely for more than 12 years. "It's a nice product, but the customers won't pay for it."

There are just too many free sources of content and alternatives. And in a time of belt-tightening and recession mobile TV is a frivolous expense. However, ad-supported mobile video and TV may have a bright future. Users will be willing to watch video/TV commercials on mobile devices in exchange for free content -- like the traditional TV broadcast model. A recent Forbes piece offers some data on current ad rates for mobile TV:

The average cost for ads on mobile TV ranges from $5-$10 per thousand impressions for a banner ad and $30-$40 per thousand impressions for video.

This is where the action will be: free TV programming and video supported by ads or purchased directly without commercials (i.e., via iTunes).