Is the iPhone too small for advertising?

The New York Times tells us that Hollywood seems to love tiny screens like iPods and iPhones but that advertisers don't... Yet.

Even though iTunes TV and movie sales are soaring, advertising dollars have been slow to migrate to these platforms. In 2006, just $421 million was spent on mobile phone advertising across all platforms. Compare and contrast with the $48 billion spent on broadcast television. If you're wondering why we don't see more free, advertising-sponsored shows and movies on iTunes yet, these low numbers tell you why. Advertisers don't seem to grasp what an amazing captive audience iPod and iPhone users are and will be.

When the iPhone debuts, expect to see this trend change. "The iPhone is going to shake things up and make cellphone companies look like they are behind the curve. It is going to be good for us." the Times quotes Thomas Lesinski, president of digital entertainment for Paramount Pictures.