In a recent Fierce Wireless Article I asked – Does Netflix on the iPhone matter? The answer was yes. With the launch of Hulu Plus the question must again be posed – does it matter? This time the answer isn’t as simple.

Netflix was important because it offered something for nothing (well, nothing more to be specific). Netflix on the mobile wasn’t likely to be the sole reason a subscriber would opt for Netflix but it could offer additional incentive to new users as well as extra value and stickiness to existing users. Hulu Plus faces a host of different challenges however:

1. It requires a new billing relationship and monthly fee. Unlike Netflix, which already has a billing relationship with its 14M+ customers who simply must download a free app, Hulu is asking users to pay $10 per month to a new provider. This cost may seem trivial but in an era of economic turmoil it is not and consumers will have to take money from somewhere else to pay the monthly fee for a service which isn’t quite going to let them cut the cord.
2. Content, content, content. Hulu’s library is deep but it’s not all encompassing. CBS isn’t on board yet and that’s a major wrinkle for a service that has to pride and position itself on its depth of content. Add to that confusing content availability – a current show’s current season will be available but libraries vary for every other piece of content. The lack of clarity will confuse users.
3. The competitors. Primetime2Go and BitBop have already camped out at the $9.99 price point but neither have the brand recognition of Hulu or as deep a library. They do however allow user to download video for offline viewing. One major caveat is that neither is yet or seemingly going to be available for iOS where Hulu Plus is starting before expanding to other platforms
4. Broadband caps. Hulu Plus will allow users to stream over 3G which will invariably frustrate iPhone users not on unlimited data plans and limit utility by demanding users primarily rely on WiFi to stream content.
5. No Freemium offering. If Hulu allowed users to access some content for free it would be much more compelling but the lack of any free mobile play severely limits the service.

So, the question again becomes – does Hulu Plus matter in mobile? The answer is - not a whole lot more than BitBop or Netflix. Hulu Plus is a further demonstration that content owners are reticent to adhere to ad-supported business models on mobile devices and until they do they’ll be limited to niche audiences. For more information, see Jia Wu’s post Online Premium Video: Hulu v. Netflix.

May you live in interesting times as the old Chinese proverb goes. Well in the information, communication and entertainment industry we certainly do. Some very interesting questions face our industry whether we look at:

• the outcome of much delayed Indian 3G auction or
• the battlegrounds around HSPA+ and LTE or
• the surging Android ecosystem vs. weakening Symbian or
• the upside potential for WebOS under it new owners
• the potential disruption caused by mobile cloud phones and device

Every major technology advancement has lead to a massive disruption in the handset and infrastructure vendor community.

• In 3G, Motorola’s slim myopia led to its near ruin and has provided huge growth for Samsung and a foothold in international markets for LG and SEMC.
• On the infrastructure side 3G was expertly grasped by Huawei and ZTE leading to a new wave of M & A and a new world order which counts Nortel as a victim and seriously challenges ALU.

So how will the migration to 4G change the playing field?

• Who will benefit most on the operator/service provider side?
• Will Cloud Phones be disruptive in LTE?
• Will operators find a path to realign the traffic/revenue mix with mobile broadband devices?

I would welcome your thoughts on these key questions. Also don’t forget to join our client webinar on Thursday May 27.

David

As we rapidly close the cover on one of the toughest years the telecommunications, content and internet industries have ever seen, SA takes a look ahead beyond the recession to detail the key megatrends for the mobile industry in 2010.

We see a tough but positive mobile ecosystem outlook with devices recovering stronger than services. More consolidation is likely among network operators, while profits for device vendors will continue to flow away from handset only vendors in favor of device/services integration specialists. Emerging markets will continue to dominate volume with strong 3G rollout competition expected. The global market for services, applications, devices and infrastructure will post modest growth of approximately 3% in 2010.

The total mobile industry revenue including services, infrastructure and devices was flat in 2009. We expect a modest growth of 2.8% in 2010 to $1140B.

· In 2009, only strong growth in data spends by users ensured that total industry revenues did not decline. Data revenues grew 9.5% in 2009 and are expected to grow at a 13% rate in 2010 reaching over $200B.

· Handset market sell through revenue will rebound well in 2010, posting growth of 4% while the infrastructure market will continue to struggle and will decline slightly.

Key issues shaping the 2010 landscape include:

• Operators needing to balance the the strong rise in Capex requirements driven by the data traffic explosion against slow revenue growth. The likely outcome being significant M&A, network sharing and even applications development.
• Handset OEMs will be forced will put the early stake in the ground for new device categories. Traditional OEMS will continue to struggle to match the Apple & Google vertical integration strategy which has proven so successful.
• As the big five vendors focus on smart phones and content/services in the open markets, a race develops to get services/apps onto feature phone products or other operator customized devices
• On-portal traffic continues to grow but is outpaced by off portal session growth. Contextualization and personalization of the user experience will determine winners and losers.
• The rapid diffusion of Flash and HTML 5 on handsets could negate much of the need for mediacos to use open platforms/app stores in mature markets.
• In the business sector we see SMEs and Manage Mobility as key battlegrounds. We see growth in hosted services for SMEs (e.g. Unified Communications infrastructure-one phone mobile and fixed, one voicemail etc.  Personal v corporate liable devices (iPhone v BlackBerry) becomes a major issue.
• In the Emerging Markets area we see consolidation & 3G expansion in urban areas as key battlegrounds. With improved financing prospects, there will be significant consolidation among regional operators and rationalization of holdings.