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Mobile Video Growing Pains

By : Chris Tribbey | Posted: 04 Jan 2010

Mobile video may be facing a technological hurdle as it gains in popularity, according to industry pundits.

Demand for mobile video applications is high.

According to ABI Research, more than 60% of mobile devices today are video capable, and according to research firm Parks Associates, video applications, along with gaming and music, are by far the most popular among consumers, downloaded by 71% of mobile customers.

This is great news for content owners, with mobile video avenues broadening every day. Screen Digest estimates that by 2013, revenue from mobile video will hit more than $3.4 billion worldwide. ABI Research says mobile content traffic has the potential to more than double in 2010, with streamed video content accounting for 15% of all mobile usage.

But all this added video content is causing mobile video industry experts to worry whether the current pipeline for content can handle it all. The mobile industry only has so much room in the airwaves, and it’s begging the government for more.

“While 2009 proved that there is strong demand for mobile content, 2010 will be much more about how to sustain usage,” said Ronan de Renesse, senior analyst with Screen Digest. “The successes of 2009 could become the nightmares of 2010.”

Steve Largent, president and CEO of the wireless industry trade group CTIA-The Wireless Association, is pushing for Congress to pass H.R. 3125, the Radio Spectrum Inventory Act. It would force the National Telecommunications and Information Administration and the Federal Communications Commission to inventory all available airwaves to see what bands are underused and could be reallocated.

“With more than 276 million subscribers in the United States, it is vital for our industry to secure at least 800 megahertz of additional spectrum within the next six years,” Largent said, “Spectrum is our industry’s backbone and it is what allows us to continue to innovate and create new apps, products, and services. Without this additional spectrum, our industry will cease to provide U.S. consumers with the most innovative and most competitive wireless offerings in the world.”

Verizon Wireless is an example of how quickly mobile video has been offered in large quantities to consumers. The company’s mobile video has grown from a small selection of V-CAST short-clip videos in 2005 to hundreds of available programs today, including live programming, such as sporting events and MSNBC’s coverage of the Michael Jackson funeral. Some of its smart phones, like the Droid from Motorola, are even coming pre-loaded with video programs such as YouTube.

“Over the past few years, it has evolved from a series of short form clips to long-form programming from all the major broadcast and cable networks,” said Verizon spokeswoman Debi Lewis. “We've found that our customers like the option of catching up on something they may have missed, or sharing something with their friends and family when it's convenient for them. And we see the demand for long-form content growing.”

The Open Mobile Video Coalition, a mobile digital TV group, released survey results in early December that showed 90% of mobile device owners want to watch live programming on the go, and the group expects smart phone penetration to hit 50% of all cell phones in 2010.

Thomas Ellsworth, CEO of GoTV Networks, a mobile content firm that makes made-for-mobile programming, said it’s an “arms race to get smart phones into the hands of consumers.”

“The capability of smart phones to show long-form content, with battery life and memory, has enabled consumers who have taken advantage of it,” he said. He added that the challenge for mobile companies is to encode content so that it’s easily available to mobile video consumers, but without sacrificing quality.

“The issue for operators with mobile video is data traffic. It is a bandwidth intensive medium,” said Dan Shey, mobile services analyst for ABI Research. “The issue is downstream transmissions of video over operator data networks caused by use of mobile broadband connected laptops, net books and smart phones, all with browsers that can play video from Internet Web sites.”

And consumers aren’t slowing down in buying those mobile devices that demand broadband access. Nielsen in late December issued a report showing that 15% of all American households have a smart phone, and one in five households do not have a landline, relying on cell phones only. Parks Associates estimated that at the end of 2009 there were more than 90 million smart phones in use in the country.


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