Global market for mobile video $30bn by 2017
November 9, 2011
GIA (Global Industry Analysts) says the market for mobile video services is projected to reach $30 billion by 2017, primarily driven by factors such as continued deployment of high-speed mobile networks, increasing availability of sophisticated mobile phones that enable users to download and play videos, introduction of economical data plans by service providers and growing popularity of social networking sites among mobile users. Robust demand from developing markets such as Asia-Pacifica and Latin America also augurs well for the market.
Buoyed by the huge demand for data communications from mobile users in both business and consumer markets, content providers, right from independent content developers to large-scale movie studios are beginning to develop applications, music, games movies and videos especially for mobile devices. Not surprisingly the use of mobile devices is extending beyond the traditional communication functions to embrace novel concepts such as mobile videos, and games. Mobile video segment especially is gaining tremendous popularity over the last few years. Despite being a small market, mobile video services continues to grow, with video-on-demand, video telephony and video messaging capturing a significant share of the market’s revenue. With Internet providing a large number of video services, and service providers increasingly willing to offer these services on mobile devices, video is rapidly making inroads into the mobile arena across the geographies.
The impact of the 2007-2009 recession, in retrospect, reveals a market that has withstood the recessionary pressures largely as a result of the continued growth in sales of mobile video capable smartphones and increase in the number of phones supporting 3G and other faster networks based on High Speed Packet Access (HSPA). Consumer interest on downloading and streaming mobile video and mobile TV content remained largely unchanged during the recession period, proving that ‘quality entertainment’ was left uncompromised even amidst tight economic conditions.
Consumer spending on choicest of mobile videos largely remained intact despite the witnessed reduction in household wealth, low consumer confidence, reduced discretionary spending, and lower new application development efforts. In other words, served right on to consumer handsets, mobile video services allow users to cut down traveling expenses and provide an alternative to other expensive entertainment options, such as, public movie screenings and live sports action and therefore are best for entertainment in a weak economy. Continued interest shown by wireless carriers on data centric services, particularly for utilising their networks optimally and improving their ARPU by offering value added content to cost conscious customers, also boosted prospects for mobile video services market during the period, as the same resulted in increased promotional activity and more attractive pricing options for mobile TV and video services. With mobile users graduating towards a richer, and more sophisticated mobile experience, the market for video delivery has and will continue to remain opportunity-rich, and dynamic.
Growth in the market, although stabilising, will nevertheless be driven by introduction of novel video services. Introduction of economical and flexible data plans by service providers will attract many new users to the market, thereby increasing revenue making opportunities. Widespread deployment and availability of 3G mobile network infrastructures across the world will continue to drive adoption of video services over mobile. With mobile network operators making active efforts to move towards 4G technology, the popularity of mobile video services is expected to increase further.
Asia-Pacific is also the largest regional market for mobile video services in terms of subscription. Rapid proliferation of 3G enabled handsets, introduction of 3G services in major nations such as China, and India and growing popularity of mobile video services such as mobile video sharing, mobile video communication and mobile TV are primary factors driving accelerated adoption of mobile video services in these markets. Streaming Services represent the largest service segment in the US mobile video services market. Growth in the market is particularly driven by increased advertising of subscription-based streaming video services in the nation. Multicast Video Services market represent the fastest growing service segment in the US mobile video services market with revenue waxing at a CAGR of about 38.7 per cent over the analysis period.