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Watching TV on the really small screen

Is anyone really watching TV on their mobile phones? At least three million people are, according to the latest subscriber numbers from MobiTV, an Emeryville, Calif.-based company that streams television shows like Nascar events, HBO dramas and the hit drama CSI to cell phones.

Although the bulk of MobiTV’s subscribers are likely in the United States – the company doesn’t break down user numbers by geography, but U.S.-based Sprint (S) is its longest-standing customer – North Americans have been relatively slow to take up watching TV shows on the small screen.

That’s because most of the constraints on the growth of mobile television in the U.S. have more to do with culture than technology, says Michael Wolf, an analyst with ABI Research. Unlike their Asian and European counterparts, most Americans don’t commute on mass transit, and let’s face it, driving is not exactly conducive to watching TV.

“I do still think we’re in the very early phase here,” says Wolf.

MobiTV is trying to change that. But they’re not alone: Qualcomm’s (QCOM) MediFLO service, available to some Verizon (VZ) Wireless customers, transmits television channels to handsets using UHF spectrum. Sling Media, meanwhile, lets consumers watch and control their home TV from select phones.

This rise in service providers, along with an increase of compatible handsets and more premium TV content, are all reasons MobiTV president Paul Scanlan remains optimistic on the prospects of mobile television in the United States.

“This coming year we think mobile television will take a dramatic shift forward,” says Scanlan. “Within the next year or two pretty much everything available on your home television will be available on your mobile.”

By year’s end there will be an estimated 3.7 million mobile TV subscribers in the United States and Canada, compared to 2.2 million at the close of 2006, according to Wolf. And by the end of 2008, about 6.7 million people across the United States and Canada are expected to watch television on their phones.

One of the reasons MobiTV has had some early success with its service is that it works on a broad range of cell phones. What’s more, MobiTV’s basic channel lineup is now bundled in with Sprint’s data plan. That means that any Sprint customer who signs up for data in addition to voice automatically becomes a MobiTV subscriber.

“Bundling has been a huge point of growth,” says Scanlan.

If there’s one thing North Americans are ahead of the curve in, it’s spending money on wireless plans. According to a new report by Informa Telecoms and Media, Americans and Canadians generate the world’s highest monthly average revenue per user from mobile data services. But whether they’ll end up using those data plans to watch television on the tiny three-inch screen remains to be seen.