iPhone Has Potential to Dramatically Alter the Market for Mobile Video, According to Study by Interpret

SANTA MONICA, Calif.--(BUSINESS WIRE)--According to research conducted by new media research firm Interpret, LLC, the iPhone has the potential to be a catalyst for growth in mobile video usage, among both iPhone owners and owners of regular cell phones. Despite owning their new iPhones for a short period of time, 63% of iPhone owners have already used the widescreen-enabled device to watch video (compared to only 28% of regular cell phone owners). Half of iPhone owners (51%) have watched a YouTube video on their phone, while 46% have watched a music video, 34% watched the news, and 32% have already watched a movie trailer.

The study shows that it’s not the consumers who are different, it’s the iPhone – prior to buying the iPhone, few owners had watched video on their cell phone (only 17% had seen YouTube clips, 21% had watched a music video, 16% had seen the news, and only 15% had watched a movie trailer on a phone).

“Apple has already made a name for itself as a top destination for music and video on-the-go, and consumers expect the iPhone to deliver on that reputation,” said Jason Kramer, Chief Strategy Officer, Interpret. “Consumers want to watch video on their cell phones, but they have high expectations for the experience. The iPhone shows consumers that the potential is there to meet or exceed their expectations for mobile video.”

The study also shows how the iPhone could have a “halo effect” for mobile video, even among non-owners. Only 28% of non-iPhone owners have ever watched video on their cell phone, and interest in watching video on their current phone is not strong. One-quarter or fewer are interested in watching music videos (25%), TV shows (25%), movies (24%) or video clips like on YouTube (24%). However, after seeing a 2-minute video about watching video on the iPhone, nearly three-quarters (73%) of non-owners say they are interested in watching video on an iPhone, and 42% say they are “extremely” or “very” interested. Further, widescreen video is a compelling selling point for the iPhone – half (50%) of non-owners who are open to buying the device say that seeing the iPhone’s video capabilities makes them more interested in buying one.

“What’s surprising is how wide open the market for mobile video is right now,” added Kramer. “The iPhone is definitely raising consumer awareness, but there are other players to watch, like Verizon and LG’s VX9400 Mobile TV phone. Consumers are remarkably open to who delivers mobile content to them.” A majority of both iPhone owners and non-owners consider carriers, broadcast and cable networks, movie studios, and Internet portals appropriate sources for mobile video. iPhone owners and non-owners have some different expectations as to who will provide their mobile entertainment – 73% of iPhone users expect to get it from iTunes (compared to 43% of non-owners), and 46% of non-owners expect to get it from their cable or satellite company (compared to 37% of iPhone owners).

According to the survey, 66% of iPhone owners and 73% of non-owners said they prefer to watch content for free, with ads. One-third of iPhone owners (34%) would consider a monthly subscription model (compared to only 21% of non-owners) and 28% would consider pay-per-download (compared to only 20% of non-owners).

“In order to fully capitalize on the opportunity for mobile video, Apple and its competitors will need to move beyond a pay-per-download business model,” said Michael Dowling, Interpret’s CEO. “Consumers are used to an ad-supported model for video, and are open to a wide range of advertising if companies like Apple can deliver on the user experience.”

Study Methodology

The survey was conducted online among a representative sample of 1,000 cell phone users, including 200 iPhone owners and 800 non-owners.

• Survey was conducted last Friday-Tuesday (July 6-10, 2007).
• Nationally-representative sample of cell phone users ages 13-64.
• To obtain a representative sample of iPhone owners, potential respondents were randomly chosen from four major online research panels and data was statistically adjusted for survey response bias.
• iPhone owners had to triple-verify ownership of the device.
• Non-owners were required to own a working cell phone, have current service, and be the primary/joint decision maker in making new cell phone purchases.
• US Census estimates were used to insure that the overall sample was representative of all US cell phone users ages 13-64.

About Interpret

Interpret, LLC is the first global research consulting firm focused on evaluating and measuring the intersections of media content, technology, advertising and consumer behavior. The firm’s mission is to bridge the knowledge gap between key media stakeholders – content providers, technology companies, advertisers and agencies – by listening to the evolving voice of the consumer, who is both the source of the digital content revolution and the ultimate arbiter of its future. Both our custom market research services and our measurement and planning tools focus on deep consumer understanding of TV, movies, DVD, games, downloads, mobile content, and online content within a larger, cross-media context. Interpret’s management team has unique experience pioneering new custom research methodologies and high-level analytics in both traditional and new media, including home entertainment (DVD/Hi-Def), theatrical pictures, videogames, mobile content, technology and television. For more information visit www.interpretllc.com or contact info@interpretllc.com.

Authorized Uses

Members of the press may cite research data or a portion of text less than one paragraph in length provided that each is sourced to Interpret, for example, "Source: Interpret, LLC" or "According to media research firm Interpret, ..." Copies of graphs, data tables or slides must include the following copyright notice affixed to all material: "Copyright © 2007, Interpret, LLC"