Americans accessing video content via mobile broadband onto laptops and netbooks will total 24m, and create traffic totaling 311 terabytes per month. Americans accessing TV content via ATSC M/H will reach 18m by 2015.
Dr Steve Smith, the report’s author, observes that ATSC M/H will hit FLO TV on three fronts: cost, devices and content. “FLO TV and its devices are prohibitively expensive, especially when compared with free ATSC M/H content.
Competition between mobile phone manufacturers will drive down costs of ATSC M/H devices and provide a wider variety of devices for users. In terms of content, although FLO TV tries to differentiate itself from ATSC M/H by showing programs from national networks, many of the local networks available via ATSC offer such programs. We therefore see these standards as competitive, not complementary.”
The report goes on to argue that although video via carrier networks will exist alongside broadcast mobile TV, mobile video user growth will be steeper because it enables greater content variety, more control for users, more niche programming, and greater opportunities for personalization and advertising.
However, Smith points out that growth will be linear rather than exponential: “Viewing video on small devices out of home is new. It’s different from cameras and MP3 players on phones because people were already taking photos and listening to music on other devices whilst out and about.
Nevertheless, mobile phones are things people always carry with them and use for a variety of activities – texting, social networking, mobile web and so on. The challenge for service providers is to create the kinds of services people want and to help people make the transition from what they are currently doing on their phones to something entirely new.”
Smith adds that 4G roll out and smartphones will be significant in helping drive mobile video take-up. “Research shows that smartphones are not only used by more advanced users, they actually help stimulate advanced use. Also, growth of video applications and larger, haptic screens on smartphones will increase take-up. The importance that smartphones will have for mobile video take-up is indicated by the increase in ownership, which will rise to 132m in 2015. By then, smartphones will account for 64% of all mobile phone sales.
In the meantime, considerable hindrances need to be overcome that the report says will only be resolved slowly over the next three to five years. For users, these include costs related to content, devices and mobile internet; reliability; speed; and lack of control and the kinds of content users want to watch. For service providers, these include slow returns on investment. In terms of monetisation, Smith proposes an advertising subsidized subscription model. “It’s not an either/or scenario. Our research shows that subscription fees are too high, but also that an ‘advertising only’ model will not bring in the returns required. Supplementing subscriptions with advertising will enable lower subscription costs, with the additional effect of increasing subscribers.”
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