Sharper screens, multicast, and phablets set the stage for the year ahead. As consumers watch more on mobile devices, how many subscriptions will they pay for?
From new delivery technology to higher-resolution screens, the world of mobile video delivery changed forever in 2014. In the process, companies such as Apple and Samsung have left us confused over whether we’re consuming more on smartphones, tablets, or something in between.
Mobile video consumption in all its forms continues to rise dramatically. Ericsson projects that video will make up 50 percent of all mobile data traffic by 2019, versus approximately 40 percent in 2013. After factoring in the overall growth in mobile data, that means the mobile video market will be 13 times larger in 2019 than it was in 2013.
The overwhelming amount of content is becoming an unwieldy mess. More and more content is being made exclusively for tablet and phablet consumption, although some estimates place laptop and desktop viewing patterns at an overall 77 percent for viewers’ preferred device types.
One reason it’s harder to wade through all this premium content is the fact that content creators and providers each have their own proprietary apps and services. Netflix, Amazon, Google Play, HBO, Comcast Xfinity, and Showtime are a few of the several providers vying for consumers’ monthly subscription fees, and content available on each of these services is often only available on one premium service at a time. The use of an app to replace a television channel can easily be extrapolated; we’ve already heard HBO announce that it plans to pare off all its content into a subscription-based streaming service in 2015, meaning millions more users will have the HBO GO app on a mobile device of their choice.
But in most cases, content can only be searched within the app itself, leading to unnecessary and time-consuming opening and closing apps to see if a particular piece of content is available. While discovery of relevant content isn’t easy, third-party service providers are beginning to address the issue, with each providing a website or app that attempts to curate the wild world of app-based premium video content.
Streaming video search engines and apps—such as Filmgrail, Rovi, or Can I Stream It—offer a user the chance to type in the name of a film, movie, episodic series, or—in some instances—a sporting event, and receive back details on how many (or how few) streaming services the particular piece of premium content is available for viewing.
Ads, Ads, Ads
Pre-roll, mid-roll, post-roll, dinner roll? What works, and which ones make viewers click away instead of waiting for their content?
Testing shows that too many pre-roll ads annoy customers. While pre-roll may seem the best placement for the advertiser, it’s also the placement point at which advertising can be most easily ignored by the viewer. Post-roll ads have pretty much been abandoned, with the exception of those clever “subscribe” requests on some of YouTube’s better-known channels.
To hold viewer attention, nontraditional or viral ads continue to be most effective, as they tend to stick better in consumers’ minds and generally leave a better impression of the sponsor’s product or service. Nothing spreads more effectively than word-of-mouth or social network sharing. But what if viewers just won’t sit through the ad?
It would be wise for video advertisers to take a cue from podcast advertisers. Some of the most popular podcasts online today use great creativity when recording their ads and credits. This American Life listeners will sit through the entire credits and sponsor ads at the end of the program just to hear what quote from the show would be taken out of context and used to embarrass Torey Malatia.
There’s also always a different reader in an unusual location recording ads for Radiolab’s sponsors, and even tech companies have risen to the occasion: An ad for MailChimp at the beginning of the Serial podcast has taken on a life of its own, getting its own remix and high customer retention states. If video can translate some of these audio-only podcast advertising ideas into memorable video ads, engagement and acceptance will increase compared to traditional ads.
Two big technology areas emerged into their own in 2014: MBMS and HTML5.
Multimedia Broadcast Multicast Service, or MBMS, is a point-to-multipoint content delivery technology. In development for several years and recently made more viable within the AWS spectrum being used on LTE networks, MBMS offers hope for multicasting broadly viewed content such as a national or even international sporting event or breaking news.
On the mobile browser front, another trend is emerging. Since most mobile OS browsers support modern web video technologies such as HTML, the type of mobile OS utilized becomes less important at least for non-encrypted content. Yet while proprietary streaming services—for instance, Netflix, which currently cannot be used within a mobile browser—are currently stuck with an app-only delivery approach, a number of mobile rights management and encryption technologies are finding their way into the humble browser.
Still, Nielsen revealed that smartphone owners spend 86 percent of their time using apps, compared to 14 percent accessing content through the mobile web browser.
In 2015, we probably won’t see a “TV” app on your phone that can switch through channels the way your home set does, and maybe not ever if the app approach mentioned at the top of this article continues unabated.
Second, as we touch on in the State of the Enterprise article, it could even be that MBMS and multicast derivatives are abandoned entirely, replaced by peer-to-peer or other hybrid solutions.
Third, as content creators and providers each create their own “walled garden” apps, consumers will run out of both screen real estate and expendable income for multiple subscriptions. In the end, to keep their mobile devices manageable and their pockets at least partially full, we predict that consumers will trend toward paying for just a few services from well-known content providers. What’s less certain is whether these paid services will tip more towards those with the largest variety (Netflix and Amazon) or those with the must-see programming (HBO and major-league sports apps). Regardless of the outcome of the app war, video search tools will gain more relevance as available content begins to grow at exponential rates.
Finally, if promises of cheaper 4K televisions continue—as they likely will—consumers will grow more used to the idea of viewing 4K content in 2015. This will lead to the natural succession of mobile content moving from 1080p, which is the current baseline standard on phablets, to 4K content viewing demand for mobile devices. Qualcomm’s flagship Snapdragon 810 already enables 4K processing for mobile devices, and we expect it will add the ability to localcast to second screens in 2015 as early as March at the Mobile World Congress show in Barcelona.
As we leave 2014 behind, and anticipate new delivery technologies, including cellular multiplexing for traditional webcast delivery from the field, it’s safe to say that mobile consumption will continue to rise. While it might not outpace laptop and desktop online video consumption in the next year, the end of 2015 should set the stage for 2016’s tipping point into mobile delivery that equals that of content delivered to the desktop, the laptop, and even the set-top box. In fact, one might even wade far enough into the prediction swamp to envision a time that all large-event live over-the-top (OTT) content will be delivered via mobile networks to further blur the line between what’s mobile and what’s traditional over-the-air television.
This article appears in the 2015 Streaming Media Industry Sourcebook as The State of Mobile Video.