|
Mobile & Wireless
Analysis
Mobile video to break out in 2009
Enhanced content and new business models will drive growth
by Mark Hyland, QuickPlay Media
The growing adoption of media-friendly devices and increasing demand among consumers for mobile TV and video content suggests that, when it comes to entertainment, the mobile phone is finally breaking out of the “early adopter” phase. In fact, according to a recent IDC report (U.S. Mobile Television and Commercial Video 2008-2012 Forecast, Doc. # 212089, May 2008 Forecast), the number of mobile TV/video subscribers and customers will grow to 27.7 million by 2012.
Much of the momentum around mobile TV/video services can be tied to continued developments and innovations over the past year. During this period, the selection of advanced devices grew significantly, as did the volume and type of available content. Mobile service providers also made it easier and more affordable for consumers to connect with popular and relevant content. As we move into the new year, it’s now time to look back at some of the specific developments from 2008 and look ahead to what we expect to see in 2009.
Looking back at 2008
Over the course of 2008, mobile service providers focused on increasing adoption by removing a number of barriers. Key hurdles addressed included cost, better devices, and discovery and navigation:
Flexible Pricing: It’s no secret that cost has been one of the biggest stumbling blocks to consumer adoption of mobile TV and video services. In fact, in the eyes of many, it’s the number one inhibitor. According to a recent QuickPlay Media-Zoomerang online survey focused on consumer interest and consumption of mobile TV and video content, 43 percent of respondents stated that perceived cost was the number one reason they have not tried mobile TV and video. To address the cost issue, some providers offered free trials and more attractively priced bundles of media services, and experimented with ad-funded content offerings. Of course, better Internet access, particularly through smartphones, meant that more and more free video services are available “over the top.”
Better Devices: The iPhone has changed the game for everyone when it comes to creating a great mobile media experience. Data usage by iPhone users, as well as those with other media-friendly phones like the Samsung Instinct and the latest RIM entries, is sky-high. For many, these devices mark the first time that watching a video on a mobile has been anything more than a curiosity.
Improving Discovery: Service providers also continued to address the challenge of making it simple for consumers to locate and connect with quality content. Web 2.0 discoverability features, such as content recommendations, content search or “What’s Hot” today, and integrated search, were enhanced, thereby making it faster and easier for customers to find popular and relevant content.
Looking ahead
In 2009, we will see a significant focus around increasing service relevance by enhancing content and adjusting service access and content business models. The increasing inventory of mobilized content — both on-deck and off-deck — will spur greater usage of mobile TV and video services as the mass market becomes more comfortable with the third screen in general. In 2009, some of the key developments we expect to see are as follows:
Ease of access: Providers will continue to focus on the ease of access of the content, by integrating together live broadcast and video on demand services. This expansion will remove the limited “siloed” approach employed previously in favor of presenting to consumers content they’ll want first via a single interface, rather than split between live streaming, on-demand channels and other media. Frankly, this kind of integration is needed to save broadcast-TV-only services from irrelevance.
Premium content: Long-form premium content will gain in popularity, with providers introducing DVR-like features that help consumers adapt long-form content to uniquely mobile behavior, including the ability to watch in a series of bite-sized “snacks.” Mapping mobile behavior with premium content will open up myriad opportunities for operators and content producers alike.
Aligning value: Pricing and business models will be adjusted to better align with consumers’ value perceptions. Operators will capitalize further on the growing demand for premium long-form content and maximize service revenues by aligning content pricing with popularity. Specifically, they will segment their offerings into low cost base packages and higher priced premium packages. We will also see an increasing mix of ad-supported content. However, subscription and Pay-Per-View models will continue to generate the majority of revenues.
Respectable growth: New economic realities indicate that growth will continue, though it will be tempered. Operators need to revise their pricing strategies and bundles to entice consumers to maintain their current spending levels, and increasing that spend will be a challenge. However, mobile TV and video services present a significant opportunity to increase ARPU because of their ability to stimulate mobile data usage by engaging consumers with premium content options. The iPhone, Blackberry Storm and Bold, Android devices and others will also continue to drive increased consumption of mobile data including video services. As a result, despite the current economy, mobile consumption can and will grow respectably.
We are amidst unprecedented times — both in economic uncertainty, and technical innovation. The speed at which new technologies reach the market and the rapidity with which media companies are mobilizing their content mean the mobile consumer experience is taking center stage. As we turn the page to 2009, we’re encouraged by all the positive steps the industry can take to stimulate the growth of the mobile market.
In 2009, interest in mobile TV and video will grow, as consumers seek out high-quality, affordable sources of entertainment. To that end, operators will continue to explore new ways to capitalize on this demand with innovative personalized services and pricing experimentation all designed to translate interest into adoption.
Mark Hylandis Vice President of Marketing at QuickPlay Media, a provider of mobile video solutions for companies offering video and TV services over broadband wireless networks. Mark is a frequent speaker at many influential industry events including: CTIA Wireless & Entertainment, Digital Hollywood and Mobile Content Strategies.
|
