Mobile has fast become the consumer’s first device, they wake up in the morning and check their mobile smartphone for the time, email, daily schedule, news, messages, and so it comes as no surprise that mobile video is growing quickly as another service on their devices.
Today however consumers pay significant premiums for video viewing on mobile networks compared to more traditional channels, unless operators or content providers implement pricing initiatives to help make it more affordable. In a recent study, analysts from Analysis Mason found that, depending on the country, it costs consumers anywhere between 16 and 180 times more to watch 30 minutes of video on their smartphones using mobile data, than on pay-TV and fixed broadband services. When price differences are so large, it is not surprising that consumers are reluctant to view video content on mobile networks.
So What’s Changed?
“Most successful organizations fail to look for new things their customers want because they’re afraid to hurt their core businesses. Companies rarely die from moving too fast, and they frequently die from moving too slowly.” – Reed Hastings, CEO of Netflix
Carriers are struggling to increase services revenue due to the ongoing pricing war and slowing number of phone net additions. Conversely, equipment revenue growth is decelerating due to the adoption of leasing programs and customers upgrading their devices less frequently. Mobile Video will help operators bolster revenue growth as the market for traditional wireless services continues to saturate. Network densification will be essential for operators to support increased data traffic from mobile video streaming. Carriers are pursuing partnerships to enhance wireless coverage and mobile video offerings.
The popularity of mobile video is evident all around us – in people watching YouTube, Netflix, T-Mobile’s Binge On, Verizon’s Go90 and other content on their smartphones and tablets. This phenomenon is booming as a result of broad support across the mobile ecosystem, including among devices, networks and services. It shows no signs of slowing, and it has crucial implications for how mobile operators direct their infrastructure investments and strategies.
Swisscom, T-Mobile USA and Zain in Saudi Arabia, and other operators have also adopted the zero-rating approach to mobile video. Consumers can view content by certain providers without affecting their mobile data allowances. These providers may need to fulfill certain requirements; in the case of T-Mobile’s Binge On, they need to satisfy certain technical specifications related to video resolution. Customers, on the other hand, may need to purchase services to qualify for zero-rated mobile video, such as a particular allowance for mobile data or a pay-TV subscription.
In China, Spain, and Turkey, some operators provide data allowances dedicated only to mobile TV and video, in addition to normal mobile service plans according to Analysis Mason. These are available to all subscribers for reasonable monthly fees, and streaming is generally limited to the operators’ own video platforms. Somewhere between zero-rating and dedicated data allowances lies the subscription model. This is used by, for instance, StarHub in Singapore, which provides customers with unlimited mobile video streaming for a monthly fee.
So what else can a Mobile Operator do?
For more details download and read our white paper “A New Approach for Mobile Video Services”
Attend our June 28th Cisco Knowledge Network Session at 11:00am ET entitled, “How Does a Mobile Operator Manage Video Traffic and Make Money at It?” register at http://bit.ly/1Ud6JlL
Read the latest Cisco Visual Networking Index.
And watch this space for a series of blogs on Mobile Video