Watching video on mobile devices has a long way to go before it becomes a ubiquitous practice among mobile phone users, according to a new report published by The NPD Group. According to the report, while 28% of all mobile phones in use in February 2006 were capable of playing digital video, only 1% of subscribers currently did so; however, 12% of wireless subscribers report that they are “likely” or “very likely” to use mobile video in the next six months. Although few in number, mobile video users show very positive usage behaviors – just over half (51%) watch video on their phones at least once a week.
“Premium services for mobile phones have only recently become big business, but video has a way to go before consumers are ready to sign on in a big way,” said Drew Hull, research director for mobile content for The NPD Group. “At this point, it’s especially important for wireless operators, service providers and video content companies to understand the mindsets of mobile phone users if they want to position themselves well for future success in marketing video for mobile phones.”
Consumers who subscribe to video on their mobile phones currently pay an average of $10.70 per month for the service. When they were queried on price sensitivities, consumers who have considered subscribing to mobile video content say they’d be willing to pay between $6.50 and $8.50 for a monthly subscription. In addition, both current users (77%) and those who intend to subscribe (69%) are interested in watching live TV on their mobile phones.
“Many consumers are calling for live TV and lower pricing before they’ll start watching video on the smallest of screens,” Hull said. “But considering those that are likely to use it, namely, high-income, young-adult wireless subscribers, it might serve the industry well to lower the cost barrier in order to reach more of this lucrative market.”
NPD’s Mobile Video Report was based on a Web-based survey among members of NPD’s online consumer panel. A nationally balanced sample of teens (13-17) and adults (18+) was invited to complete the survey, and NPD collected 2,207 total responses. Price sensitivity analysis was conducted using the Van Westendorp Price Sensitivity Meter methodology.