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AT&T has been caught up in a class-action lawsuit stemming from taxes billed to subscribers using data plans. The operator started sending out SMS messages to subscribers last week regarding a future refund, though details on the settlement and the lawsuit’s background is still largely unknown.
As part of the settlement, AT&T will refund taxes billed to users for mobile Internet services rendered between November 1, 2005 and September 7, 2010. The lawsuit was filed against the operator from plaintiffs who claimed that AT&T had violated the federal Internet Tax Freedom Act. This act prohibits state and local governments from levying taxes on Internet access between November 2003 and November 2014, though apparently AT&T kept collecting anyway.
A Website was created to give information about the lawsuit, though several important questions remain unanswered. First of all, there’s still no mention of how much AT&T collected wrongly, or how many mobile data users it affects. I for one have two AT&T accounts with data plans and have never received an SMS regarding the lawsuit like many others have. Another big question is what AT&T will have to pay out for this mistake. In the last quarter alone, AT&T reported revenues of $4.8 billion from wireless data services, and this settlement covers the last five years.
It’s also likely that AT&T isn’t the only operator who’s been collecting these taxes. I have a feeling we’ll be hearing a lot more about this in the near future. Leave us a comment if you’ve been affected by this lawsuit. Has anyone received an SMS regarding a refund?
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Mobile video advertising provider Rhythm NewMedia has announced a series C round of funding valued at $10, while indicating its interactive video ads average over 425 million monthly impressions as of Q3 alone.
The company was founded in 2005 and says its the largest mobile video ad network around, even though it’s continued to fly under the radar. A reason for that is that it tends to only work with big-name brands and publishers, and actually counts over 100 Fortune 500 companies as clients. Publishers include CBS and Fox; and advertisers include Best Buy and FedEx, to name a few.
The company focuses on pre-roll interactive mobile video ads, and is responsible for many of the ads you already see on iOS and Android applications. The ads served by Rhythm are interactive in the sense that users can tap on something during the pre-roll ad to visit another website, or view a longer video clip like a movie trailer for instance. Serving over 425 million monthly video ad impressions, which the company says is up 30% over Q2, Rhythm has found the sweet spot of mobile video advertising.
As part of its “Q3 2010 Mobile Video Ad Report” released last month, Rhythm covered data showing completion rates for interactive pre-roll video ads remain high at 87%, exceeding online video and even television. In addition, CTRs are 79% higher on display ads that mention “video” as a call to action vs. other similar ads, the company said, and iPad CTRs for pre-roll video ads are 2x or higher vs. iPhone, iPod Touch and Android.
The mobile video ad space will continue heating up, and we’ll likely hear a lot more from Rhythm going forward. Rhythm CEO Ujjal Kohli said his company was “a bit early” entering the space, but that things have really taken off since the iPhone launched.
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