pay per-view model for mobile TV network build-outs. For the first time, says Sprint, it will offer a fully ad-supported mobile TV channel called "The Fast Lane." It will target the 18-34 year old male demographic and Sprint has plans to expand programming to other key demographics later.

Steve Sechrist
Senior Analyst and Editor
of Projection Monthly &
Microdisplay Report

"Fast Lane" will run as a free service in Sprint’s "Media Player" section alongside fee-based offerings like Sprint TV. The clips will be 2- to 2 ½ minutes each of short poker tips, car-racing clips, comedy and sports selections. The ads will last up to15 seconds and will be placed 20 to 30 seconds into the clip. This is different from the pre-roll model where the ad runs first, according to Versaly Entertainment’s CEO Matt Feldman whose brand management company supplies fee-based entertainment to Sprint as well.

While still in its infancy, Sprint’s MobiTV has not done too well in its fee-based model. "Inside Hollywood" runs on Sprint for $4.99 a month, but has only garnered a subscriber base of 3,000. That’s out of a potential audience as high as 1M viewers, so the result is "below expectations", according to Feldman. The company is setting the bar much higher with the free mobile TV service however, expecting 250K to 300K viewers.

The role of advertising was instrumental in the mass adoption of TV’s in the 1940’s and 50’s. It was ad dollars that financed the national network build-out, essentially eliminating the barriers to entry so consumers could try and ultimately adopt the new technology. In retrospect, the approach was a "no-brainer." Imagine having to pay for every episode of "I Love Lucy?"

By reducing the cost of content delivery down to zero, the nascent TV industry leveraged advertiser dollars to employ the "economics of free" gaining widespread US penetration of the medium in under six years.

So can we look to this model to finance the build-out of mobile TV networks in the same fashion? Our take is of course-for the end-user the economics of free, work every time. But the big question is: will the ad dollars support the added cost of a third-party network build-out model (MediaFLO or DVB-H) with network ownership in the hands of other players who demand a substantial percentage of the revenue?

This question has Qualcomm and others re-examining the business model to take a hard look at the revenue assumptions. But make no mistake; history is on the side of the ad-based approach. Plus there is an added bonus - often the ads themselves can be as entertaining as the content they support! -SS