By Tae Sung Park, CEO Vidiator
The mobile internet revolution is being driven by video and music streaming. Mobile TV for example is one of the biggest growth areas in the mobile industry. Deloitte has predicted that around five billion hours of catch up TV will be watched using mobile devices on the move this year, whilst also expecting mobile video consumption to double in the first half of this year.
On top of this, people's viewing habits are changing; we believe that under 30's in mature markets and the under 40's in emerging markets will spend up to one hour every day viewing content on mobile devices (both free and premium content) and especially live channels helped by new 4G and Wi-Fi networks.
Operators reluctant
These statistics clearly demonstrate consumers' increasing appetite for video content, but so far operators have been somewhat reluctant to launch paid-for services.
This reluctance stems from a concern about major investments into hardware and infrastructure and a fear that the service will fail and the investment will be lost. But by playing it safe and overlooking the very real business case, operators potentially risk losing out on a very lucrative revenue stream, one that other dynamic companies are now starting to benefit from.
Consumers today want 'everything, everywhere' content accessible on all of their devices whether that's a laptop, tablet or smartphone, and they want access to that content wherever they happen to be.
With many operators yet to offer their own solutions, companies such as Netflix, Lovefilm and Sky's latest addition Now TV, are seizing the opportunity and storming ahead with their paid-for streaming services. The success of these services shows that there's a solid business opportunity there.
Money to be made
Vidiator recently commissioned an independent survey of 1500 people across the UK, India and Malaysia to find out what people want from mobile video and if they'd ever pay for it. The results showed that not only was there a market, but a much bigger one than many had imagined. Altogether, 73% of people said they had already paid or are considering paying for mobile video in the UK, compared to 74% in Malaysia and 64% in India.
Furthermore, the majority of the people who said they would be willing to pay for these services said they would pay for this on top of existing subscriptions to cable and satellite providers. This should serve as a massive wakeup call to operators struggling to monetise the large amounts of data currently overloading the networks; people are genuinely willing to pay them for video content if the service is up to scratch. So why aren't there more premium content services on offer?
Quality counts
It's worth pointing out that these results come with one key caveat; people will only pay for video that's good quality and that's delivered quickly. Put simply, a lot of the content on the market today isn't good enough or at least not for many people to pay for.
Some of the more common problems include buffering and poor quality images, however the biggest issue saw over 50% of people in the UK, 68% in India and a massive 89% of people in Malaysia dissatisfied with the time it takes video to load. This isn't an easy fix, but solutions do exist to deliver video more intelligently. Operators are naturally wary of major investments into new services, but high quality video streaming services don't require new infrastructure and can be delivered efficiently using improved software solutions, keeping the initial investment low.
This is a 'new media revolution' that is being driven by the consumers and their changing viewing habits. By taking into account not just our survey results but these wider industry trends, it's surely time for operators and broadcasters to stop fearing the market or doubting the potential ROI of launching their own service. There is a clear business case for mobile operators, broadcasters and content owners to tap into the growing global audience that is turning away from the traditional living room TV in favour of 'on the go' content.
Monetising video shouldn't be a complex issue or one that requires months of in-depth study and lengthy deployment projects as these survey results have shown what content providers need to do; deliver good quality content and do it quickly.
Vidiator is a new media delivery specialist, that provides content streaming solutions from encoding live and recorded video content, to streaming this content to a whole host of internet and 3G enabled devices via its Xenon platform.
