The Free Mobile Streaming Video That Isn't
By Mike Masnick, Wed May 18 01:30:00 GMT 2005

A new service is gearing up to offer "free" streaming music videos to mobile phones. The videos will be ad supported, but it's questionable how free the offering really will be.

In the wake of South Koreans receiving broadcast TV for mobile devices, there are plenty of questions about the business models associated with mobile TV. A new study splashes some water on the topic by noting that very few people seem willing to pay anything extra to use mobile TV -- but a fair number would watch it, if it were available for free.

That should suggest the Digital Music Video Network has excellent timing in launching its own free streaming video offering of music videos for mobile devices. The offering is free because it's supported by ads. In order to watch the music video you want, you first have to watch some kind of advertisement. In other words, the company is taking the basic broadcast television model and trying to move it to mobile phones.

There are, however, a few problems with this. First, in trying to attract users to watch mobile TV in the snippets of "downtime" they have between actually doing things, wasting that time with advertising may not be all that appealing. If anything, it will encourage users to do something else while the advertisement is playing. If that's the case, then advertisers will quickly discover a fairly weak ROI on such ads, which could spell trouble for the business model as a whole.

At the same time, there's the question of whether or not this offering is really "free" to users. As was noted a few months ago when Virgin Mobile Radio went to a free streaming model, most data offerings still charge based on usage, and streaming costs can lead to bills pushing $10,000 per hour. That's probably not quite the "free" people were expecting. Of course, the reason operators charge these high usage fees is due to limited capacity on their networks. While this new video offering claims excellent compression ratios, it's still going to put a strain on some networks. For operators who do use flat-rate pricing for data, don't expect them to let users watch very many of these videos.

What this shows is a clash of business models and technologies. While an upstart can come along and offer a nice "free" streaming offering, it's unlikely that most operator business models or technology can really handle people using it very much. This might change with some of the actual broadcast networks that are being set up for mobile devices (rather than sending the data over the cellular connection), like the one discussed in South Korea. However, since those broadcast networks are still somewhat limited, there's no indication that anyone's looking to offer up free ad supported content on them just yet -- and even if they are, they still run the risk of such advertising supported models not working either.