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Mobile Video Report Shows No Cookie Cutter Approach to Monetization

by Nitesh Patel | 7月 08, 2016

Consumer research shows watching video on smartphones is becoming an increasingly common activity. This trend is of no surprise as the experience of watching video on smartphones has become acceptable. In the youth market watching video on mobile is the norm. However, mobile video maturity varies strongly by market and therefore mobile operator approach to mobile video monetization must fit accordingly.

In advanced markets like Western Europe, North America, Japan and Korea, factors such as increasing smartphone display sizes and improving screen resolution, greater access to broadband networks (4G and Wi-Fi), larger bundles of data to support mobile video consumption, and a plethora of viewing options, including YouTube, Netflix, Snapchat and Facebook, among others, have helped to grow mobile video usage. Significantly, Facebook’s popularity and scale, with over 1.5 Billion monthly active users (MAU) on mobile means the integration of autoplay video into users’ newsfeed has had a huge impact on driving mobile video to the masses.

Going forwards, Strategy Analytics recently forecast that mobile video viewers are set to double, from 1 Billion to 2 Billion over the next five years, with the volume of video traffic consumed on mobile set for strong growth as a consequence. Many of these key factors driving this growth were outlined in our recent webinar “What’s driving the $25 Billion mobile video market? And what’s there for you? ”

To monetize this growth in mobile video we see operators like LG in Korea, T-Mobile USA, Vodafone UK, and Verizon taking alternative approaches. Tariffing lies at the heart of the majority of these efforts, with LG offering video specific tariffs to address an increasing appetite for video consumption. T-Mobile is also offering a video specific tariff through Binge On, providing zero-rated video to partner sites, but only if subscribers accept video streamed at standard definition. Vodafone in the UK is integrating access to best-of-breed video partners like Sky and Netflix into its tariffs, to help differentiate its plans but to also drive subscribers onto higher price subscriptions. US operator Verizon has been the most ambitious and has developed its own video application, go90, to compete for a share of the growing mobile video ad-market.       

By contrast the mobile video landscape in emerging markets is not as mature, with limited smartphone and mobile broadband penetration, combined with smaller and less affordable data bundles acting as barriers to mobile video adoption and use. The type of content in demand is also more localized in these territories. For example, in markets like Bangladesh mobile operators Airtel and Grameenphone are offering video snacking plans in partnership with providers of video services to stimulate early use.     
Last week Huawei released a whitepaper “Mobile Video Report: Video a Key Driver of Mobile Market Value,” co-authored by Strategy Analytics. The report identifies the key areas in which mobile operators across different regions (both developed and developing) must improve in order to benefit from the boom in mobile video.  It includes a mobile video maturity scorecard to enable mobile operators in different regions to evaluate the prevailing conditions for mobile video across key metrics such as mobile broadband penetration (4G and Wi-Fi), mobile data affordability, consumer readiness for mobile video, the availability of content, and smartphone penetration.

Video Maturity

The report also provides a comprehensive view on the key supply and demand-side factors driving current and future demand of mobile video consumption. 

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