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Should mobile TV be ad-supported or subscription-based?

Earlier this month at the Consumer Electronics Show, NBC TV president John Eck said that 2009 will see the idea of free, over-the-air TV come to mobile phones, PDAs and other portable devices as a new service.

NBC and the other 62 stations in 22 cities cited by Mr. Eck will soon begin to roll out regularly scheduled programming to mobile devices. Issues pertaining to dynamic ad insertion, content monetization and the need to break down media into snackable bites for mobile are issues these content providers are facing as they look at this new service.

"We will continue to see people carrying around high-end mobile devices expecting to interact with the content," said Sam Harp, director of business development for Azuki Systems, Acton, MA.

"We develop comprehensive mobile content services, not just video, but video in the context of an interactive mobile Web site with a range of different features that enable users to socialize around video content and other types of content," he said.

Azuki has been working on the issues surrounding mobile TV and video since the company's inception.

Azuki executives include founder Cheng Wu - who built and sold ArrowPoint to Cisco for $5.7 billion, Arris Networks to Cascade Communications for $217 million and Acopia to F5 Networks for $210 million - and CEO Jim Ricotta, who built and sold SightPath to Cisco for $800 million and DataPower to IBM for $100 million.

The company has debated the role that advertising will play in this free over-the-air TV concept.

"If advertisers are spending money in mobile, that's a good thing for us," Mr. Harp said.

"At this point the ecosystem is still far from developed, so whatever contributes to an appetite in marketplace for mobile marketing, encourages media agencies to develop pre-roll mobile video spots and promotes consumers' consumption of video from a mobile device, that's all really good," he said.

Azuki lets consumers comment directly on a particular video clip, rate it, favorite it and find it at another time and share it with a friend by sending a link within an SMS message via a Facebook message.

"Any one of those interactions around video can apply equally to an ad message stitched to a piece of content," Mr. Harp said. "If I share a basketball highlight, that basketball highlight will have an ad message stitched to it, which can be shared as part of the viral content-sharing process.

"We can track click-backs, much like cost-per-click ad campaigns," he said. "We have the ability to weave video ads into mobile content and pair them to work as companion units with interactive display ads.

"The humble banner ad remains the workhorse of the mobile marketing industry, and it's important to offer the easy clickablility of banners even when you want the brightness and the sizzle of video ads."

Azuki hosts non-interstitial, pre- and post-roll mobile video ads.

A competing model for mobile TV and video is subscription-based services. Examples include Verizon Wireless' V Cast and SprintTV.

Verizon Wireless and CBS recently partnered to bring new and expanded CBS programming to the carrier's television and wireless customers (see story).

The Broadcast Mobile Convergence Forum, known as bmcoforum, says that mobile TV has made big strides and is becoming a mass-market medium that marketers should target (see story).

MediaFlo USA, a division of Qualcomm Inc., aggregates and delivers TV-quality entertainment and information services to mobile devices over its dedicated nationwide wireless network.

Based in San Diego, MediaFlo USA is working with carriers and national content providers to deploy wireless multimedia services.

"Azuki champions an alternative approach to delivering premium video content," Mr. Harp said. "We take a mobile Web-based approach, so it's analogous to what you get on your computer, rather than what you get on your television.

"We have an alternative that's more similar to MediaFlo, but we see this as a complementary as opposed to a competing technology," he said. "What we do is fundamentally different from the linear TV viewing experience you'll get with DTV.

"It's fundamentally interactive, so it's not accidental we've developed technology letting people socialize and interact with media in a meaningful way."

In addition, to MediaFlo, another competitor in the space is MobiTV Inc.

"The mobile consumer is a purposeful consumer," Mr. Harp said. "There's definitely a place for mobile television, particularly people who have a solid fixed commuter schedule, they can watch their preferred programs at the same time every day, so there's a niche there.

"MediaFlo's adoption rate is much slower than Qualcomm would have liked, so there's doubt as to whether the appetite really exists to consume programming in this mode," he said.

"We wish them well, because anything that gets consumers to want to consume video on mobile devices is helpful for us and the entire mobile ecosystem."

Azuki provides an interactive mobile media services platform. It enables content publishers and mobile operators to build, engage and monetize mobile audiences around rich-media services.

Azuki's first major commercial deployment is expected any day now.

The company's ClickZoom service enables user to interact with videos in a new way by navigating with one thumb through a graphical user interface in video libraries and individual clips

"Anything over a minute-and-a-half is considered long," Mr. Harp said. "We see mobile video consumption as a snacking mode, and we make all video snackable by cutting it up into small chunks and letting consumers zero in on the moments in a video clip that are most relevant.

"We let people trigger playback from a point other than the beginning," he said. "We have a unique approach to mid-roll ads, because we let consumers consume it in smaller pieces.

"We can stitch ads into parts of each video other than the beginning."