Number three in a series: I’m finishing up my coverage of last week’s MIT Digital Media SIG with the third of three posts on that evening’s event, a panel discussion and the Q&A session that immediately followed it. The evening’s topic for the panel discussion was entitled “Internet Video Everywhere:  Entrepreneurial Opportunities in Online and Mobile Video.” The panel was moderated by David Ryter from MIT, and featuring:

flotvThe subject of mobile TV came up from the audience with the question specifically— “Will it make it?”

Brian at Yankee Group commented that QUALCOMM’s white-labeled offering didn’t find traction in the market and that the company was going to go direct at this point, and that there remains an unwillingness to pay for mobile TV among most US consumers. John at Nellymoser pointed out that FLO came about because of Korea, and then Verizon failed to offer CNN to its subscribers for $15 a month. His opinion was that reutilizing existing content, distributing it via cell towers and providing a chip on the phone to decode the content was a better solution, but then you run head on into the licensing war.

I have to agree that mobile TV has been a real non-starter in the US. After seeing demos each year from QUALCOMM and others, and having participated in covering the mobile TV format wars (FLO vs. DVBH) for a while, I never expected the replication of Korean on these shores. The problem with most solutions was that the guides were slow, and content wasn’t matched to an audience that had already moved into time shifting just the channels they cared about. To make place shifting happen on top of that, you need to shift the content they care about, not offer a block of channels from a typical cable TV offering. It’s not what people want to watch, or pay extra for. Beyond sports fanatics, there really wasn’t that big of a market.

Source: Harris Poll and Placecast

Source: Harris Poll and Placecast

Then the discussion moved into advertising and— “Where are the online ad networks going?”

Bob at Brightcove pointed out that there’s a lot of inertia now in online advertising; a lot of experimentation, with bottom line screen rolls becoming popular. But there needs to be more traction in mobile. John at Nellymoser added that ad experimentation in mobile is occurring around click to call, click to link, click to SMS, and send to friend from within the ad. But the real buzz is starting to grow around location-aware apps, and he predicted that advertisers would pay high CPMs for LBS clicks.

Like mobile TV and the experience on the big screen showed us, we can’t replicate the online advertising experience on a mobile screen in the same fashion either. Creative approaches like click to friend (integrated with the address book on your smartphone) and click to SMS may prove successful only if the ad content is compelling enough. But Americans still want to tread water carefully when it comes to seeing advertising on their mobile phones. In a study of 2,000 adults by 1020 Placecast and conducted in late 2009 by Harris Interactive, more than one-fourth (26%) of US cellphone-owning adults were somewhat interested in receiving location-based relevant ads on their phones, provided they could opt-in for such alerts. The willingness to receive opt-in alerts was higher among younger respondents at 40% among 18-34 year-olds and 33% among 35-44 year-olds.

Online ad networks continue to experiment with mobile and there’s no clear business emerging model yet. Many consumers show distaste for the amount of advertising they’re barraged with daily. Ad networks need to focus on serving up mobile ads that complement a person’s tastes, rather than inundate them with coupons of establishments “around the corner” that will be seen as meaningless and spam. They must lead with an opt in as well.

apple-adobe1-292x320The final question from the audience for the evening was around the Apple vs. Adobe spat that’s materialized since the iPad’s announcement— “What’s the future of Flash in the face of HTML5 and Apple and Google?”

Bob at Brightcove stated that his company focused on Flash for fast proliferation, and their goal continues to be focused around getting content on as many devices as possible. Today, that means supporting Flash.  As soon as the iPad announcement was made, Steve Jobs was visiting all the content providers in New York and Los Angeles pushing iPad and HTML5, and rumors of the rift with Adobe started. Brightcove’s customers began calling and asking—  “How do we do iPad and HTML5 development with online video?” Bob pointed out, quite correctly, that the main issue between Flash and HTML5 is not technical, but rather political. Adobe will roll out Flash Player 10.1 for mobile platforms supporting Android, other smart phones operating systems, and tablet devices. Video has gone viral among bloggers, with many embedding video into their sites, but many of those sites don’t support JavaScript.  So embedded code doesn’t work. He saw the Apple and Adobe spat as yet another political and religious platform war that will in the near term lead to a poor customer experience. John at Nellymoser pointed out that if all smart phones had Flash then Adobe would have a more solid foundation. But the new generation of smart phones is touch-based, and Flash isn’t optimized for a touch-based environment.

It is unfortunate that within the consolidation of mobile operating systems that is occurring, we stand on the brink of a development platform war. This just confuses application developers, whether they develop for the Web or mobile, or both. It will take some time and considerable expense for major properties to convert their websites from Flash to HTML5. The iPad will have issues accessing content on a large percentage of online destinations, unless a converter is developed within the application community (and if Apple would approve such a thing). Google seems to be walking instead of running to HTML5, unlike Apple, which has claimed that Flash is the reason for a large number of support calls on its iMac and MacBook products, and is driving quickly to HTML5. Google will support the new versions of Flash, but does want to point mobile developers towards developing for the mobile browser down the road.

I think iPad 1.0 will be an interesting product and probably doesn’t deserve the negative press it’s been getting among some circles. Although it’s a closed system, many application developers I’ve met with have been waiting long and hard for a bigger screen to write iPhone code for. Many are working on vertical applications too, as they unlock the capabilities of multi-touch on larger devices, in fields such as healthcare and education. But they’ll also have Android to develop on as well, for tablet applications, not to mention Chrome-based solutions.

iPad won’t in the long term compete with iPhone and smart phones in general, but rather with netbooks and notebooks. As Bob at Brightpoint pointed out— “The notebook is not the ideal form factor over time, look how many iterations there were of MP3 players and mobile phones until iPod and iPhone arrived!” And I’d have to agree, having covered these markets for many years. While mobile is a significantly big market from a device shipment perspective, application development and innovation is still in its infancy stages. I think that location-aware technologies coupled with content aware applications and augmented reality capabilities will lead to a revolution in mobile solutions. These solutions will really stand out from what we think is already pretty cool today.

-Randy Giusto