The Growth of Mobile Video

ipad-review-3-new-10One trend worth noting is the explosion of mobile video, meaning on-line video that is watched on devices other than televisions or computers. Ooyala recently published a report looking at the trends in mobile video and the numbers are eye-opening.

  • In the past year mobile video watching has doubled and the rate of growth is accelerating. In February 2014 it represented 21% of all on-line video being watched and by June had grown to 27%.
  • It’s projected that by 2016 that more on-line video will be watched on mobile devices than on televisions and computers.
  • Cisco projects out further and says that mobile data could represent 69% of the world’s Internet traffic by 2018.

This has some real implications for anybody in the video business. Not only is on-line video growing rapidly with content being provided by Netflix, AmazonPrime and YouTube, but that video is being watched more and more on smartphones and tablets rather than televisions and computers.

This trend is being driven by a lot of different factors:

  • In the US this trend is partially driven by age. A recent Nielsen poll showed that Millenials are now watching 4.5 hours less of traditional TV per month than they did a year ago.
  • There is a big increase in TV Everywhere and cable operators say that about 90% of US cable subscribers now have access to TVE.
  • There has been an explosion in the number of mobile devices capable of watching video and sales of smartphones and tablets are sharply up.
  • There are now more worldwide users connected to the Internet through mobile devices than through landline connections.
  • There has also been rapid growth worldwide in both 3G and 4G mobile networks. Akamai reports that the average mobile data speed in the US is 5.5 Mbps. They also say that there are 21 countries that now have mobile speeds that average over 4 Mbps.
  • There are huge amounts of content being produced, particularly in the shorter lengths of under 30 minutes.

Viewing habits still vary by size of screen:

  • 81% of the on-line video watched on television screens is of lengths greater than 10 minutes.
  • 70% of the on-line video watched on tablets is of lengths greater than 10 minutes.
  • But smartphone users prefer shorter content and 45% of the video watched on smartphones is of 6 minutes or less. But the viewing of 30-minute+ videos on smartphones is growing rapidly

The interesting thing about mobile data is that in the US a large percentage of this traffic is being carried through WiFi using landline connections. The capped mobile data plans make it very hard for most customers in the US to watch very much data on their mobile plans without paying a big premium price. As I’ve reported in other blogs, American consumers are getting very smart about using WiFi whenever it’s available.

It’s also worth noting that video quality is increasing. Netflix and others broadcast a lot of content in high definition and are now starting to stream in ultrahigh definition 4K. The quality for shorter videos on sites like YouTube is also getting better with much more HD content. And better quality means more bandwidth demand for the network operator.

What does this all mean to network owners? My takeaways include:

  • The explosive growth of on-line video that is being watched on landline networks means a continued pressure to offer faster speeds in order to support multiple devices watching video.
  • A cable provider must offer a TV Everywhere product to stay relevant.
  • This is more mounting evidence that we are losing Millenials from traditional cable TV packages.

Statistics on How We Watch Video

Old TVExperian Marketing has published the results of yet another detailed marketing survey that looks at how adults watch video. This is perhaps the largest survey I’ve seen and they talked to over 24,000 adults about their viewing habits. This one has a bit of a different twist in that it correlates TV viewing with the use of various devices. The conclusion of the survey is that people who use certain devices are much more likely to be cord cutters.

Probably the most compelling statistic from the survey is their estimate that as of October 2013 the number of cord cutters has grown to 7.5 million households, or 6.5% of all households. This is several million higher than previously published estimates. This survey shows that age is an important factor in cord cutting and that 12.4% of households that have at least one family member who is a millennial between the ages of 18 and 34 are cord cutters. And something that makes sense is that over 18% of those with a NetFlix or Hulu account have become cord cutters.

The survey also shows that the number of people who watch streaming video continues to grow and that 48% of all adults and 67% of those under age 35 watch streaming or downloaded video from the Internet each week. And this is growing rapidly and both of those numbers increased by 3 percentage points just over the prior six months.

The main purpose of this survey was to look at viewing habits by type of device. One of the surprising findings to me is that smartphones are now the primary device used to watch streaming video. I guessed it surprised me because this is not one of the ways we watch video in our household other than videos that pop up from Facebook. But during a typical week 24% of all adults or 42% of smartphone users watch video.

The television set is still the obvious device of choice for viewing content and 94% of adults watch something on their television each week. Only 84% of adults now use the television to watch live programming and the rest are watching in some different manner. For instance 40% of television watchers still view content from DVDs, 32% get content from a DVR, 13% watch pay-per-view and 9% watch streaming video. As of February 2014, 34% of television sets are now connected to the Internet. Of those 41% use AppleTV, 35% use Roku and the rest have Internet-enabled TVs.

Adults are watching content on a lot of different devices now. Something that might be surprising to bosses around the country is that 16% of adults with a PC at work use it to watch streaming video. One fourth of adults who own game consoles watch streaming video, 26% of adults who own a home PC use it for videos, and 42% of adults who have either a smartphone or tablet use them to watch video.

The survey also looked at what people watch and the time spent with specific programming on each kind of device. For example, YouTube is the source for 59% of the video watched on PCs and the average adult spends over 21 minutes per week watching it. Only 7% of content viewed on PCs is NetFlix, but the average time spent is over 23 minutes per week. And over 10 minutes per week is spent on PCs watching Hulu, Bing Videos and Fox News.

The survey also asked how adults feel about advertising that comes with the video on each kind of device. Not surprising to me, only 9% of those over 50 found the advertising on their smartphone to be useful and 14% found advertising on the TV to be useful. But younger viewers are not quite as jaded as us baby boomers and 36% of millennials find advertising on their smartphone to be useful and 39% find TVs advertising to be useful.