ESPN, CBS, CNN, Others Grew Mobile Video Revenue in 2010

But a report by SNL Kagan says it largely remains "a rounding error" compared to traditional businesses.

NEW YORK -- Media brands such as Walt Disney's ESPN and Disney, CBS and Time Warner's CNN grew their mobile video revenue last year, but for now, its financial contributions remain miniscule despite the growth in tablets, apps and smartphones, according to a report.

SNL Kagan's Economics of Mobile Programming, unveiled Thursday, once again shows ESPN at the top of the U.S. mobile video revenue chart for programmers and aggregators with an estimated $46.6 million in 2010 revenue, up from $43 million in 2009.

But the research firm highlighted that this figure represents less than 1 percent of the $7 billion that ESPN generated from cable and satellite TV affiliate fees and advertising. In a news release, it said that for many content firms mobile video revenue remains "a rounding error."

The rise of mobile apps "has simplified mobile video discovery, and, though use has grown, 2010 marked the slowest year of growth yet for U.S. mobile video revenue," SNL Kagan said.

Content players' gains in particular lagged those of aggregators and technology providers last year. “That’s mostly due to Verizon Wireless de-bundling Vcast video from its unlimited data subscriptions in summer 2010,” said SNL Kagan analyst John Fletcher.

MobiTV with $45.5 million in mobile video revenue in 2010 - when excluding revenue earned that is split with programmers to prevent double counting - versus $27 million in 2009, Disney ($23.9 million versus $21.5 million), CBS Mobile ($21.2 million versus $19.9 million) and CNN ($20.5 million versus $18 million) round out the top five in terms of mobile video revenue, according to the research firm's estimates.

But the SNL Kagan report says it largely remains "a rounding error" compared to traditional businesses.

For 2011, it expects ESPN's mobile video revenue to rise to $53.6 million, MobiTV's to $54.6 million, Disney's to $27.4 million, CBS Mobile to  $23.8 million and CNN to $21.5 million.

Meanwhile, SNL Kagan predicts tablet growth, helped by the iPad 2 launch, will be a key opportunity for mobile players this year.

The number of tablet users, which grew from virtually none in 2009 to several million in the U.S. alone last year, is expected to continue rising this year. SNL Kagan predicts iPad users alone will at least double in the U.S. thanks to the iPad 2.

Said Fletcher: “For years, small screen handsets have hindered mobile video adoption, but touch screen smartphones and now tablets are removing this limitation."

While no paid iPhone apps focused on video have charted well to date, the top five apps as of October were all game titles, according to SNL Kagan.  They were led by Tetris, which has generating less than $20 million in lifetime revenue, the firm said.

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