TV Ads Losing Effectiveness, But What About Mobile TV? (AT, S, VZ)

Includes: AT, S, VZ
by: Paul Callahan

Carl Howe at Blackfriars has put up two interesting posts. The first cites the diminished effectiveness of TV advertising. The second highlights findings that show user viewing time increasingly split between the Web and TV, but becoming less tolerant of ads on the whole.

Where does that leave mobile TV? Yahoo just made a deal with CBS to carry an on-demand version of 60 Minutes with access to archived programs. But I don’t think mobile TV viewers will be willing to pay for it. I would think that wireless operators Sprint, Verizon, and Alltel would be interested in offering two tiers of mobile TV viewing via EV-DO:

1. Free noise: The equivalent of basic cable but fully ad-funded: music videos from VH1, news from CNN and MSNBC, weather.

2. Paid-for good stuff: Like premium cable $10 per month would eliminate ads and get you on-demand versions of the hottest items: HBO episodes of the Sopranos and Big Love, ABC’s Desperate Housewives.

Either way, with viewing time split between TV, Web — and now mobile TV — viewer tolerance for ads can only further degrade. This actually may push more mobile TV views to the premium package and prop up the ARPU of broadband mobile.

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