Mobile video is exploding at a rate unimagined only a few short years ago. Whereas the quick YouTube clip had been a satisfying enough diversion, consumers armed with next-generation devices now demand the latest bandwidth-busting, 2-gigabyte Hollywood opus. The end user wants it on his iPad, and he wants it now.
For the industry at large, this creates no shortage of challenges. According to the Cisco Visual Networking Index, by 2016, 71 percent of global mobile data traffic will be video, placing a heavy burden on the network. But along this next frontier of mobile video there are also unprecedented and exciting opportunities.
Last week, I traveled to San Francisco to attend the New Digital Economics (Silicon Valley) Executive Brainstorm & Innovation Forum. A prime focus was the evolution and advancement of the new web, particularly emerging mobile web business models and how rich media and video will play a role. In short, what does the future monetization of the video web experience really look like, and where is it headed in the next few years?
The event was highlighted by the interaction of executives across the entire web ecosystem—from service providers to media companies and equipment manufacturers. My particular focus was on digital entertainment and what the untethered, mobile video experience portends for the industry.
Over the course of my discussions and brainstorming sessions, some core themes either emerged or were reinforced:
1. Collaboration Is Key. There is a growing consensus that the old adversarial model is obsolete. For the entire ecosystem to succeed and for the whole market to accelerate, there must be positive relationships among all players: video media companies such as Fox and Disney; video aggregators such as Hulu and Netflix; network providers; and data and analytics specialists.
2. Look to the Cloud. The dizzying proliferation of new devices drives a one-content-to-many-endpoints relationship. By definition, this requires a cloud-based architecture, storing content away from the device. Thus, the wide-ranging market transition driven by cloud will continue to be a key enabler for future mobile video experiences.
3. The Fusion Experience. Increasingly, consumers won’t just buy the device. They won’t just buy the content. And they won’t just buy into the network. What they will buy is a fusion of all three. Kindle has already demonstrated the viability of this concept. And there is an emerging consensus that these types of network-embedded, device-enabled content video experiences will spread. Of course, Kindle started with books, which are relatively low in bandwidth. A potential impediment to video within this type of fusion model is its heavy burden on the mobile network. As Cisco has stressed, it becomes essential to take advantage of alternatives to the network. Chief among these will be Wi-Fi, especially since, as Cisco has found, 84 percent of “mobile” video consumption takes place around a fixed location, such as the home or office.
4. Sit Back, and Let the Content Find You. Data and analytics are creating a model whereby the consumption of content can be highly personalized. Say you like Clint Eastwood westerns. Amazon, for instance, can quickly and proactively position other suggestions, within the context of your taste and interests. Before you know it, you’re exploring other giants of the genre, from John Ford to Sam Peckinpah. Interestingly, surveys show that while consumers resent data-driven, personalized advertising as an invasion of privacy, personalized content suggestions are welcome (even if, technically, they are a form of advertising for the content provider). With video, there is a great opportunity to create new revenue from old content, like those classic westerns.
Overall, these trends portend an exciting future, brimming with possibilities. The astounding success of the tablet is indeed a game changer, and mobile video is now mainstream, broad in scope, and here to stay. By adopting the right strategies, the entire mobile web ecosystem can thrive.
Tags: analytics, business, Cisco, cloud, collaboration, data, digital entertainment, equipment manufacturers, IBSG, media companies, mobile, mobile cloud, models, monetization, network, rich media, Service Provider, service providers, video, visual networking index, web, wi-fi