Even as entertainment companies scramble to offer content on mobile phones, a study is warning that the market may not be ready for it.
In a global survey conducted by KPMG, 37% of respondents said they would not pay extra for added entertainment services on their phones.
An additional 20% said they would pay extra, but only slightly — about 10% more than their current phone bills.
News was hardly welcome for entertainment companies, which have begun offering clips a la carte and by subscription. A typical bundle from a network or a service like Verizon Vcast could easily cost customers $10 or more per month, higher than the threshold the majority of surveyed customers would accept.
Compared with Europe and Asia, North America also came in lowest in adoption rates for downloading music and other entertainment options that phone carriers are beginning to offer.
And while Americans tended to be interested in Internet access, many surveyed did not want to see entertainment clips, with a paltry 32% saying they’d watch short clips on their phone at home.
“With such capabilities as video, gaming and music streaming and downloading far down on the list of preferences, North American demand tends more toward the information end and less toward the entertainment end,” the researchers said.
Survey did offer encouraging news for studios: Nearly one-third of North Americans listed movie clips as the form of entertainment they’d most want to watch on their cell phones.
Study queried more than 3,500 cell phone owners globally. Results were unveiled this week at TelecomNext conference in Las Vegas.
Numbers contrast sharply with industry expectations. In a separate study, nearly half of all execs predicted revenue from such services would grow by 15% by the end of next year.
Entertainment congloms have been eager to get into mobile because they are nervous about missing a new platform, while producing new revenue from existing content is attractive to Wall Street. Over the last few months, they’ve unveiled plans to make clips of a wide range of films, news, sports and series available on mobile.
Disney topper Bob Iger and Time Warner Cable’s Glenn Britt spoke at the event, with Iger saying that “our business models need to be flexible.”
For the telcos, which are undertaking the expensive process of targeting cable TV, mobile offers a cheaper way to break into video biz.
But so many companies offering so many overlapping services could doom the play.
“The very pervasiveness of digital media in the region may go so far as to dampen demand for wireless converged services among a population already inundated by competing information and entertainment choices,” the KPMG survey concluded.