Why Mobile Video Can Only Get Bigger

by Sohini Bagchi    Nov 18, 2015

video

Video has been one of the biggest contributors to the growth in mobile data traffic in recent years. With more people having access to mobile devices and are choosing to view videos on their mobile devices even on-the-go, experts believe this trend will further fuel in the coming years.

A recent semi-annual Mobility Report by mobile network equipment maker Ericsson states that it expects a tenfold surge in mobile data traffic between 2015 and 2021, while in June it forecast an eightfold growth between 2014 and 2020. The telecom major raised its forecast for mobile data traffic growth as it found that the use of video is on a steady rise while the number of smartphone subscriptions continues to surge.

The report projects that video is expected to increase its share of total mobile traffic in 2021 to 70 percent, up from around 50 percent in 2015.

In an earlier report, Cisco researchers have predicted that mobile video viewing will increase 13-fold between 2014 and 2019, accounting for a massive 72 percent of total mobile data traffic by the end of 2019.

Analysts are of the opinion that mobile video content has much higher bit rates than other mobile content types, as a result of which mobile video will generate much of the mobile traffic growth.

The many growth drivers

Researchers notes OTT video-streaming providers like YouTube and Netflix are being the primary growth drivers. A significant increase in the number of people using their smartphones to watch YouTube and Netflix has caused mobile data traffic to rise 65 percent in the last one year. Video site YouTube, which was bought by Google in 2006, now accounts for between 50 and 70 percent of video traffic on an average, and has around one billion users - one third of the entire internet population.

Ericsson also finds mobile data traffic from smartphones, tablets and laptops grew 65 percent between the third quarter of 2014 and the same period in 2015. By the end of 2021, it forcasts around 90 percent of all traffic will be driven by smartphones.

Jessica Ekholm, Research Director at Gartner states that the availability of more affordable 3G and 4G handsets is fuelling growth in mobile data traffic. Gartner expects video streaming to account for over 60 percent of mobile data traffic in 2018, as consumers increase the number of videos they watch and upload. “Fast, uninterrupted, video experiences encourage people to increase their video usage,” Ekholm says.

Researchers observe, mobile video is fuelled mostly by the younger population, but older people are also catching up. Mobile videos are short and catchy and hence are increasingly attracting the attention of viewers. Over 60 percent of overall ad views for video less than 20 minutes, states video ad platform FreeWheel in a research.

Larger mobile screens also boost mobile video consumption, find researchers. A data from Strategy Analytics found that 42 percent of phone owners would watch more videos on phones with larger screens.

The rapid rise in mobile video consumption means that the mobile video ads are rising just as quickly. Video ad revenue is expected to climb from $5.96 billion this year to $12.71 billion in 2016, according to eMarketer, the scenario will be dominated by mobile videos in the near future.

Not without challenges

In countries like India, even though mobile videos are expected to grow at a rapid pace, the quality of mobile video remains a key challenge at present. “As mobile access becomes ubiquitous and devices more capable, subscribers will be less likely to tolerate degraded quality. Instead, they will expect an experience similar to that which we now enjoy on wired networks,” says Vidya Nath, Research Director, ICT Practice, Frost & Sullivan.

“To capitalize on the growing demand for mobile video, operators must first optimize their networks to deliver video efficiently, at scale, and with exceptionally high quality,” she says.

For mobile video players, revenue generation is yet another challenge. In the current setup, mobile advertisers have yet to explore the potential of mobile video calling services. 

Despite such challenges, it can be said that mobile video will continue to grow at a rapid pace. As Jonathan Wilner, VP- Product at Ooyala mentions in a recent Forbes article“The increase of premium content that is available is undoubtedly revolutionized the growth,” he says. “… and underneath the covers it is a technological change that is happening with much better tablets and smartphones, much better wireless coverage that allows people to do streaming outside the home in particular.” That pretty much sums up why mobile video consumption is here to stay and in a big way.