Features

Mobile Video Revenue Set to Sky Rocket

By Sophia Mayengbam

Mobile consumers today are increasingly demanding multiple functions in their devices. Consumers not just satisfied with polyphony ring tones; video services has become increasingly popular providing a huge opportunity for the content providers. According to analyst firm Infonetics Research mobile video is the wave of the future and sees a huge jump by 2009. Infotenics sees revenue generated from mobile video services around the world is set to skyrocket to USD 5.6 billion in 2009 from USD 46.2 million in 2005, a staggering 11,997% jump in 5 years.

According to Infonetics the forecast hold true if mobile video providers are able to resolve a number of quality- and content-related issues and the research opined that they are.

According to research the firm the number of mobile video handsets sold worldwide is expected to grow from 28 million in 2005 to 336 million in 2009. This growth will further push the penetration of video services among customers.

Infonectics forecast that the number worldwide mobile video subscribers will jump 8,006% between 2005 and 2009. Another research by ABI forecast that demand for video services will explode so that by 2011 more than half a billion customers will subscribe to video services on their mobile phones. ABI said that the revenue coming in from the services will be much more widespread than in today’s mobile ecosystem. One important factor is the revenue coming in from the subscription will be far surpassed advertising revenue.

Infonetics pointed out that the mobile service wouldn’t be a success until vendors and providers address a long list of difficult but surmountable challenges.

"The success of mobile video hinges on a number of factors, including the availability of handsets with reduced power consumption, value for the subscriber's money, ease of use, acceptable price points for multimedia handsets, and most importantly, the right selection of standard and unique channels, content, and services," said Jeff Heynen, directing analyst for broadband and IPTV at Infonetics.

Heynen said that these challenges can be easily overcome. He continued, "Mobile video needs to replicate the home TV experience as much as possible, be it over broadcast (RF) or unicast (3G) mobile devices. The mobile video services available today leave a lot to be desired, but people are still subscribing because they’re excited about the future of the technology. The convenience it provides outweighs its limitations."

Infonetics found that mobile operators are beefing up to improve services. Mobile operators are expanding the bandwidth of their existing 3G networks through HSDPA and MBMS, rolling out dedicated, RF-based broadcast networks, and deploying new mobile video service delivery platforms (SDPs), all steps that pave the way to offer the same content as we see on regular satellite, digital, or cable TV at home.

To cash on the lucrative market, Cisco which core business is providing network gear for business and telecommunications companies, has expanded its operation in consumer market.Cisco has agreed to acquire Arroyo Video Solutions, a provider of on-demand television, cash to extend its presence in the consumer entertainment market.

"The entertainment industry is going through a major shift while consumer desire for personalized on-demand service is on the rise. The industry is quickly evolving from pure video-on demand to anything-on-demand with any content delivered to any end device,” said Michelangelo Volpi, Cisco senior vice president and general manager, routing and service provider technology group.

Another example is Mobix Interactive, a company specializing in the creation and delivery of video mobile content. The company is not only working with mobile operators but is also being approached by handset manufacturers and specialist mobile retailers as well.

Infonetics’ report indicates that sports will serve as a major content anchor for most mobile video service providers, as exclusive coverage will help drive advertising revenue, subscriber growth, and support for other prime time programming. According to another report by analyst group Informa Telecoms & Media the 2006 FIFA World Cup was a major catalyst in the increase in the number of mobile video subscriptions.

"This year's World Cup will prove a major catalyst for mobile TV growth. It will give operators a chance to show what they can already do and test consumer demand," said David McQueen, senior analyst and report author for Informa Telecoms & Media.

In the US, Sprint/Nextel has a 5-year USD 600 million deal with the National Football League (NFL) to deliver highlights from the week's games and real-time updates of scores and player statistics. And in South Korea, Japan, and throughout Europe, mobile video operators who streamed and broadcast the 2006 World Cup games and highlights saw a huge spike in mobile video subscriptions. Infonetics expects more of the same in the future.

According to Infonetics Asia Pacific leads the market with roughly half of the world’s mobile video subscribers and the largest portion of mobile video service revenue, every year from 2005 to 2009. According to In-Stat Asia-Pacific will lead the way with 95.1 million anticipated subscribers by 2011, followed by Europe with 68.7 million subscribers and The Americas with 9.1 million.


print	save	email	comment