Pay-TV operator Dish has made a dramatic bid for Sprint in an effort to elbow SoftBank aside. The company’s $25.5 billion bid is 13% above the offer SoftBank had made previously. What makes the situation so fascinating is the strong growth of mobile video consumption over the past year. In a recent interview with AdGent, the advertising platform company pointed out that browser-based video viewing is now the No.1 activity on tablets, growing faster than app usage. In a separate interview, David Steinberg from XL Marketing remarked that mobile video ads now have roughly three times higher CPM than app ads.
Mobile video is now a hot growth category on tablets and smartphones partly because the app advertising market has turned out to be something of a disappointment. Consumers are growing more skeptical towards app ads and big brands are more familiar with the video ad format. Recent innovations with mobile video ads are stressing interactive elements and they try to lure consumers into experimenting with the ads, by customizing colors of the products, etc.
This is the environment where a pay-TV company and mobile operator merge could yield some interesting results. So far, the vast majority of consumers who buy a tablet opt for a Wi-Fi-only version as most people don’t really see the value in paying for another mobile subscription. A savvy bundling of TV content with mobile plans might change the situation.
The Dish website is already heavily promoting its current tablet offerings. According to Ooyala, one big surprise over the past 12 months has been the hot growth of 60+ minute video consumption on tablets. Consumers are already learning how to view full-length videos on their tablets, despite industry expectations that short-form video would dominate on the iPad and its ilk.
SoftBank will no doubt have its own bag of tricks to dip into — the Japanese operator has proven to be eerily nimble in clawing market share from NTT-DoCoMo with innovative pricing schemes it introduces at steady intervals. But a Dish purchase of Sprint might unleash even more innovation when it comes to experimenting with mobile content pricing.
Right now, Dish offers ad-free TV content on tablets for its subscribers. But wouldn’t it be interesting to have ad-supported options for certain exclusive content delivered for tablets and smartphones? Or could the monthly mobile subscription price for tablets be lowered sharply for consumers who opt for a Dish subscription? There are clearly many new pricing schemes that an entity like a Dish-owned Sprint could experiment with.