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Mobile Video: Where's the Money?

by Gerry Purdy 23. October 2013 08:26


Video is driving the explosion in growth in wireless data thus enabling gigantic monetization opportunities


For Wednesday, Oct. 23, 2013




I was recently asked by Caroline Dunn (Wireless Technology Forum Board member) to moderate a panel at the Atlanta Wireless Technology Forum last Thursday evening, Oct. 17 held at the Crown Plaza Hotel in North Atlanta (Perimeter Center). The session focused on mobile video and how organizations can monetize the explosive growth in the use of wireless data that is, to a large degree, caused by increased use of mobile video.


I led off the session with a forecast of the wireless data traffic. Figure 2 shows the comparative growth of wireless voice vs. wireless data from 2010 through 2013.  As you can see, wireless data traffic crossed over and became larger than wireless voice in 1Q2010. And, as the chart clearly shows, the use of wireless data grows rapidly compared with use of wireless voice.


Figure 2 stops at 2013.  If you look at the continued growth over the next five years through 2018, there is forecast to be a 10x increase in wireless data traffic (use).  This is shown in Figure 3.



It gets interesting when you breakout the growth in wireless data use. This is shown in Figure 4.  Perhaps it's no surprise that the use of mobile video is by far the largest contributor to the growth of wireless data (shown by the large purple area). 






From Figure 4, you can see that all types of wireless data traffic increase over the next five years, from email to file sharing to social networking, but video increases 3x to 4x times more than any other type of wireless data traffic.  It would be natural to want to break down the mobile video traffic by type of content. Compass is working on a project that will identify the major types of mobile video.  It's safe to say that the largest source of mobile videos is on YouTube. With such growth, it's clear that there are many opportunities to monetize mobile video. Our panelists addressed some of the interesting technology issues as well as ways to monetize mobile videos. 

Sam Franklin of Google talked about a new form of monetization for mobile video.  First, he showed an interesting change about the use of the internet (web browsing) via desktop vs. mobile.  This is shown in Figure 5.  It shows that the use of the internet via mobile finally crosses over and exceeds desktop by the end of 2013 and continues to grow from there.




This would suggest that mobile advertising will continue to grow and eventually exceed desktop web advertising. Sam then described a new form of video monetization: the Shoppable Ad.  As shown in Figure 6, this process enables those watching YouTube to click on a product that is shown in the video. The system automatically takes you to a store in which you can buy the item you see in the video.  Google is just now rolling this out, and  they believe it will be particularly useful for people using mobile devices, particularly people who want to buy something they like while watching a video while they are out and about. 




Lance Koenders, President of Laugh Factory, focused on the cost of producing videos. They can produce a web/mobile quality video for about 1/10th what the normal studio costs would be which makes it attractive to produce more web/mobile video segments and get them to be ad supported and make money. 




Even though the Laugh Factory is generating a lot of mobile video traffic (and generating revenue from it), they find that generating mobile video is more challenging than desktop video since mobile video requires a number of transcoders and platforms that they need to support to work that is satisfactory on most popular mobile products. 

Todd Brown of Cisco discussed how they are working with stadium and public performance theaters to enable mobile video playback and access to the internet by tens of thousands of attendees at the same time.


From a technology perspective, the Cisco StadiumVision Mobile solution enables:

  • More effective use of scarce Wi-Fi spectrum by enabling reliable multicast. The same Wi-Fi transmissions can be shared by all mobile devices requesting the same content
  • High-quality and reliable video delivery to a massive number of mobile devices; no more partial or frozen images
  • Low-delay delivery of in-venue content (including streaming video, audio, and data)

From a business perspective, the Cisco StadiumVision Mobile solution helps enable:

  • A better fan experience than pure broadcast of content, because Wi-Fi also supports unicast and interactive communications, enabling application providers to further enhance the experience
  • Additional revenue from new advertising and sponsorship opportunities
  • Additional revenue from fans via subscription to the service and responses to special offers and advertisements
  • The convenience of leveraging devices that fans already have (no need for a special-purpose device)



The panel discussed the business models that are being used in order to successfully monetize mobile videos. These include:

  • Advertising - there are two major kinds of advertising associated with mobile video:
    • Preempt - where a popular site plays a short video commercial before you can see the video that you desire.
    • Standard - search and display advertising on the site around the video being played.
  • Subscription - where users pay a monthly fee to see all the (internet & mobile) video they want.
  • Pay Per View (PPV) - where users pay a small fee to see a video segment such as a TV show or a movie.
  • Sponsorships - these are videos that have a message saying "This video is brought to you by <sponsor>." 

It's clear that mobile video is becoming more popular than internet video although internet video is not going away. The proportion of videos being viewed on mobile devices is growing and will continue to grow for many years. This results in a number of ways for publishers of video content to monetize and generate solid revenue from mobile video. 


The key message for everyone involved with marketing for a company is to realize that you need to consider using video as a way to promote your brand and to realize that there are a number of ways you can make money from offering those videos to consumers.


The videos from the sessions can be found on this YouTube link


Written By:


J. Gerry Purdy, Ph.D.  
Chief Mobility Strategist
Compass Intelligence


Disclosure Statement:
From time to time, I may have a direct or indirect equity position in a company that is mentioned in this column. If that situation happens, then I'll disclose it at that time

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