Mobile video anticipated to reach 390M consumers by 2016: study
January 10, 2012
Mobile instant message use is expected to skyrocket by 2016
Mobile video is on the rise and is expected to be accessible to 390 million consumers by 2016, according to a study from ABI Research.
Despite the increase in mobile video available, carriers will have a difficult time monetizing the content. In addition, the “Mobile video services” study looked at how carriers and video providers must balance their services to give consumers content while still making revenue.
“The industry experts I interviewed seemed quite convinced that freemium models – or providing a basic service tier free to all users and then making money from premium features that are sold to the small minority of heavy users and businesses, as well as advertisements – will be commercially successful,” said Aapo Markkanen, London-based senior analyst for consumer mobility at ABI Research
“I was previously somewhat under the impression that supporting a lot of free users would be prohibitively costly, but it appears that we have technologically reached a level that allows the service providers to do so,” he said.
One of the main problems with companies’ current mobile video plans is finding a way to get consumers to pay for content while knowing that they can access the content for free elsewhere.
The study specifically looked at the carrier’s role in mobile video and how it is used in video messaging via MMS.
With the increase in data usage and message plans, many carriers have had to adapt their strategies with new plans for consumers.
Additionally, services like Apple’s iMessage and RIM’s BBM that lets users send free text messages and multimedia to other users on the same platform is proof that consumers have adapted to mobile messaging and expect it to be either low-cost or free to them.
Video is also beginning to play an equal role in text and voice services for consumers.
According to Mr. Markkanen, in order for mobile video messaging to be profitable, it must start to be included in a package of services for mobile users.
The implications of this study prove that text message plans are slowly being phased out because of the high numbers of texts that consumers send.
Text messaging is now seen by consumers as a necessary component of their carrier’s plans and with the option of free messaging services available to them, users are becoming less likely to pay for the services.
Brands are also recognizing the need to offer consumers more sophisticated mobile messaging programs.
For example, Starbucks recently began a SMS program to bolster its database and increase the number of consumers in its rewards program (see story).
Additionally, new advances in more data-driven mobile devices will pave the way for mobile video in the coming years.
“For the mobile video industry as a whole, the main prediction probably would be that the growth of 4G networks and 4G-capable devices will be what will allow the mobile video services to take off in a large scale,” Mr. Markkanen said.
“In comparison to 3G, 4G enables service providers to deliver far better user experiences and that will no doubt show favorably in the consumer uptake,” he said.
Lauren Johnson is editorial assistant on Mobile Marketer, New York
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