Mobile TV content faces financial hurdle

Future development of the mobile TV and video market may be stunted by under-financing, according to a new report from Informa Telecoms and Media in partnership with German consultancy, peacefulfish.

The report, ‘Getting into Mobile TV and Video: Financing, producing and distributing TV and video content,’ forecasts that worldwide revenues from mobile TV and video services will rise from $2.46bn (£1.3bn) in 2006 to $8.35bn in 2011. But content providers vying for a share of this market are finding it difficult to finance new projects.

“While mobile TV and video content is less expensive to produce than film or broadcast TV content, it still requires upfront production costs that typically run several thousand dollars per minute,” said Chris Coffman, senior research analyst at Informa and author of the report. “Revenue shares don’t fund the initial creation of content. The mobile TV and video sector would benefit from distributors, such as broadcasters, mobile operators and content aggregators, sharing in more of the risk.”

France’s incumbent telco, France Telecom, is one company which is doing just this, announcing on Wednesday a plan to setup a dedicated unit to invest in the production of movies.

Coffman believes that one strategy distributors can adopt is to use revenue models such as minimum guarantees and licensing payments, borrowed from the TV and film industries, which involve upfront payments to producers.

Content providers are also relying on outside investments from a range of sources, including venture capital firms and public multimedia funds, though the process of connecting investors to projects and companies which need funding is not always a smooth one.