Fox Launches Mobile Hulu-esque Subscription Service

Fox Interactive Media, which ranks 9th on comScore's top 10 based on total videos served, announced today that it is taking a stab at mobile video subscription service with what it calls Bitbop. Is it an iPhone app? No. An Android app? No. A mobile website? No. It's an application for the BlackBerry.

BitBop, available on the BlackBerry Bold, Curve and Tour models, is a free application that allows users to watch many of the same TV shows and movies they know from Hulu directly on their phones. While the app is free to download, it comes with a subscription fee - $9.99 a month - to access content. Family Guy, The Office, 30 Rock, Glee, CSI, Friday Night Lights - all the major players are present and accounted for.

If you're asking yourself why the service is only available on the Blackberry - and why wouldn't you - it's because Fox has inked an exclusive deal with BlackBerry makers RIM (Research In Motion). It's a curious partnership, since the majority of BlackBerry owners use their devices mainly for work and enterprise functionality - not exactly the kind of people who are more like to watch online video on their mobile device, if you asked me.

Still, it will be interesting to see how it plays out and if Fox can boost their low video market share numbers. There is certainly a market for on-demand mobile video - the success of Netflix's iPad app and the anticipation of its iPhone app can speak to that thread. Whether that market is on BlackBerry devices is yet to be seen, but this partnership could bode well for both parties.

With these levels of growth, we're also seeing related mobile services getting a boost. App stores, both phone-based and carrier-based, are popping up left and right, mobile video usage is booming, and mobile ad markets are seeing dramatic growth, too. However, there's one area that hasn't yet benefitted from the mobile revolution: mobile e-commerce.

The indicators of increased mobile web usage are everywhere. Just this week, we heard Facebook reporting their mobile growth had tripled from December of last year to this past month, for example. And then there's AT&T, the carrier for Apple's iPhone, which is seeing so much data usage that they couldn't even keep up, having to delay the introduction of new iPhone capabilities like MMS messaging until they were ready to handle the demand.

Mobile Ads Doing Well

Mobile-dependent markets are doing well, too, at least for the most part. A recent Gartner report states that mobile ad spending will grow 74% this year worldwide to $914.5 million. But the real growth won't happen until 2011 when advertisers are expected to fully embrace the shift to mobile. By 2013, the firm expects the mobile ad market to surpass $13 billion with the Asia-Pacific region in the lead, followed by North America and Europe. Not only is the rise of the smartphone to thank for this trend, so is the rise in flat-rate data plans which make it easier for more consumers to afford mobile web connectivity. As more consumers go online, more web publishers begin to cater to their needs with mobile-ready versions of their websites. This, in turn, "is lifting mobile web access among non-smartphone users," notes Gartner analyst Andrew Frank.

Mobile Video on the Rise

Along with basic web surfing, mobile users are also finding entertainment via their handhelds, specifically in the form of mobile video. According to Nielsen's latest three-screen report, the number of people watching mobile video increased 70% from last year. Nielsen, which specifically tracks American media habits, says this increase to 15 million viewers represents the largest annual growth to date.

M-Commerce Struggles

However, not all mobile-dependent markets are doing well. Mobile e-commerce, for example, is struggling. Despite the massive numbers of mobile users, those using their phones to make purchases are still few and far between...at least here in the U.S. According to new data from eMarketer, more than 70 million U.S. mobile phone users will access the internet from their devices this year, but the m-commerce market remains immature. In an April 2009 survey by RIS News, privacy and security concerns are still at the forefront of both shoppers' and retailers' minds. This had led companies to drag their feet when it comes to introducing their mobile commerce plans. Says Jeffrey Grau, eMarketer senior analyst, "most retailers are either standing on the sidelines or in the midst of planning their mobile commerce strategy."

Another major problem is the lack of standardization in the mobile space. With the number of platforms now available, retailers find building a plethora of mobile applications not worth the effort. As InfoWorld recently noted, the smartphone market has become a "tower of Babel for developers." This means that mobile retailers have to carefully pick-and-choose the platforms they plan to support in order to see reasonable returns on their investments in this space. Despite the slow growth, it appears that m-commerce could be successful if only there were enough mobile apps and shopping opportunities out there.

Already, mobile payments firm Billing Revolution found that on-the-go consumers seem happy to purchase small ticket items like pizza and movie tickets, for example.

And a March 2009 PriceGrabber.com survey found that early m-commerce adopters were even buying up higher priced items like consumer electronics, apparel and jewelry.

In other words, when it comes to m-commerce, "if you build it, they will come." , or so it seems. However, developing m-commerce applications is only one part of the equation. For mobile e-commerce to be successful, we'll need to adopt a number of mobile payment platforms too.

At the same time, however, the total number of video streams per users dropped from 19.4 to 17.4, which is slightly puzzling. QuickPlay attributes this to the growth in adoption of live mobile TV, which generates fewer streams, but longer views.

QuickPlay provides video services to a large number of mobile carriers in the U.S. and Canada, including AT&T, Alltel, Bell Mobility, Aliant, Rogers Wireless, Telus, and Sprint.

News, Music Videos, and Trailers

In terms of content, the most popular genres for live TV streaming were news, music videos, and weather. For regular video streaming, music videos and movie trailers were the most popular genres. The most popular categories for mobile downloading were music, sports, and comedy.

Will this Momentum Continue in 2009?

One of the reasons for this increase might be the rising interest in smartphones, which make accessing video content a lot easier. At the same time, though, it remains to be seen if consumers will continue to be willing to pay for extra mobile video services in the current economic climate.

By the Numbers

Here are the exact numbers from QuickPlay:

Video Streams

• Total live TV and video streams viewed grew 118% from Q3 to Q4 2008, compared with a 27% increase from Q2 to Q3
• Total streams per user dropped slightly to 17.4 in Q4 from 19.3 in Q3
• Average stream duration in Q4 2008 was slightly longer at two minutes and 48 seconds when compared to two minutes and 47 seconds in Q3

Video Downloads

• Average download per user experienced its best quarter of 2008 with an average of 6 per user vs. 4.1 per user in Q3
• Total video downloads showed an increase of 73% from Q3 to Q4 vs. 87% from Q2 to Q3

Image credit: Flickr user Ville.fi