Tablets and phones now account for most video consumption, with implications for both carriers and advertisers.
Consumption of video on mobile devices may soon surpass viewing on desktops, if it hasn't already.
"Small now, but poised for explosive growth. That's the state of mobile video at the start of 2012," wrote fellow Streaming Media author James Careless has his lead-in to his 2012 Sourcebook article on the state of mobile video.
Today, though, the landscape looks much different, thanks in no small part to the advances in delivery technologies as well as the advent of the tablet, complementing the smartphone in a multiscreen consumption trifecta with the television. More details on the state of delivery protocols and multiscreen solutions can be found elsewhere in the 2013 Sourcebook.
Tablets Outpacing Phones
How much has mobile video viewing affected the landscape of overall video consumption? And how much content consumed on mobile devices is video- based versus other forms of content?
The latter question is fairly straightforward -- estimates from mid-2012 show more than half of data consumption on mobile devices is video content -- but the answer to the latter lies primarily in how and where one defines mobile viewing.
For instance, analytics coming from Rhythm NewMedia, Inc., which serves up advertising to new media platforms, bases its insights on a number of mobile platforms in one geographic region.
"Data points are based on ads served across iPhone, iPod Touch, iPad, Android and other devices in the US market," Rhythm NewMedia notes. While the company doesn't break down overall consumption to number of streams served -- a helpful statistic to understand just how much content truly is mobile wireless versus local wireless -- it does provide a few clues.
First, a recent report notes that tablet consumption is far outstripping smartphone video consumption.
"More viewing takes place on [tablet] devices versus smartphones," Rhythm noted in May 2012, "between 50 to 175 percent more viewing."
So tablets are fueling the rise of consumer video content, but is all that occurring on mobile networks? By no means. Another report from Rhythm, a few months later, provides a bit more insight:
"Rhythm mobile video viewers rely more and more on Wi-Fi over time," a slide from Rhythm NewMedia's 2Q 2012 report states. The slide's graphic shows that Wi-Fi-based video consumption across both tablets and smartphones increased from 51% of all of Rhythm's video consumption in 2Q 2011 to 71% a year later.
Not a Zero-Sum Game
So let's break it down a bit: If more than half of all data consumed on service provider networks is video, more than half of all overall video consumption is consumed on a Wi-Fi device, and tablet video consumption outstrips smartphone viewing by a 2:1 to 6:1 margin, could this mean that mobile video consumption is declining?
No. The answer lies in the fact that it is equally true that tablet-based video consumption -- primarily on Wi-Fi networks -- is growing, as is overall video consumption on smartphones.
In fact, the accompanying upward trend of mobile video consumption from cellular service provider networks is unmistakable: We passed the 50% mark in early 2012, where more video than any other type of data is served up to mobile cellular customers, and the trend is projected to reach almost 60% of all content served by the time you read this article.
The reason that tablet video consumption can grow faster than mobile handset video consumption, but not at the expense of each other, lies in a very interesting fact: Most consumers who have tablets also have a smartphone. Yet the corollary is of equal or even greater interest: Smartphone users do not necessarily own a tablet. At least not yet.
That may seem like a no-brainer conclusion, given the gap in time between the introduction of smartphones and the introduction of tablets. It might also seem obvious, given that the majority of tablets sold are Wi-Fi-only while all smartphones sold are inherently connected to a cellular data network.
Yet the reality is a bit more complex, and decisions made around the assumptions of the above statements are crucial to a properly executed mobile video strategy.
Two Devices or Two Users?
One of the more interesting pieces of research into mobile video consumption is also one of the more controversial: Studies indicate that the majority of tablet owners share their tablets with other users when it comes to video consumption.
Two different schools of thought propel the argument of multi-user tablets, each looking at a different aspect.
Deloitte Development, LLC, using its multinational perspective, claims that long-form video content is less likely to be viewed on "smaller tablets," which it says will be used more with apps designed for phones. To show how rapidly the market truisms shift, though, by the end of 2012 we have Apple's iPad mini far outpacing relative sales of its bigger brother, the classic iPad, and increasingly being used for video consumption via full- fledged tablet applications.
Apple, to its credit, scaled the aspect ratio on the iPad mini to work pixel-for-pixel with non-Retina display iPad applications; combined with the lower price point of the iPad mini, we may find the smaller tablets driving the trend closer to a 1:1 ratio of tablet owner to tablet viewers.
Even without the small tablet form factor, Deloitte early in 2012 noted that households already owning a tablet may be leading the charge into individual ownership.
"[I]n 2012 almost five percent of tablets sold will likely be to individuals or households that already own a tablet, which equates to five million tablets worth between $1.5 and $2 billion in revenue," Deloitte notes in its 2012 "Technology, Media & Telecommunications Predictions" report. "[G]iven that the tablet market is only three years old it likely marks the most rapid ‘multi anything' market penetration in history."
On the other hand, Rhythm NewMedia noted that in mid-2012, that shared tablet usage meant a greater advertising opportunity.
The company stopped short of saying that more than one person was viewing content on a tablet at a time, but they noted that "the fact that more than half of tablets are shared between two or more users means that the tablet audience is even larger than previously predicted" when it comes to overall viewership audience size.
One of the more interesting implications, however, of shared mobile device video consumption usage may be the lowering of advertising rates.
This multi-user, single-tablet revelation goes to the heart of a primary tenant of the mobile video consumption marketing machine: We assume that users carry a tablet as a personal device. After all, while we might have been more likely to room with a sibling growing up than we were to share a desktop computer with them, the advent of laptops, smartphones, and tablet devices seemed to herald the coming of an age of very personal computing in which one person alone consumes content on a device, across the foreseeable "coolness" lifetime of that device.
At least that's the premise of all those targeted advertisements and the idea of personalized video -- with its accompanying personalized advertisements -- runs counter to the notion of shared media consumption not just in terms of the mindset of personalized delivery but also in terms of the rates one can charge for advertising on what turns out to be a multi-user, single-tablet reality.
While broadcast television advertising CPM rates are based on the assumption that a number of viewers may relate to an advertisement while an equal or greater number of viewers may fail to relate, the question naturally arises as to the implications of shared video consumption on devices that were intended to be one-user devices.
In fact, Apple still seems a bit stunned by the idea that iPads are used interchangeably between students in classroom settings, if the lack of robust administrative controls in even the most recent iOS operating system is any indication. Apple accounts for between 70% and 85% of all tablet sales and almost 100% of all educational tablet sales, so the lack of "user accounts" on tablets means it's difficult for an advertiser to determine if viewership on a particular iPad is the aggregate of multiple unique users or merely a single viewer with wildly eclectic tastes.
Smaller Is Bigger?
So, with the smaller size tablet beginning to increase overall tablet sales, first with Android-based devices and now with iOS-based devices, where does that leave the venerable smartphone when it comes to video consumption? After all, if televisions and desktop monitors are, on average, getting much bigger but tablets are trending a bit smaller, the mobile handset almost seems the odd man out.
Turns out that's not necessarily the case: a Business Insider Intelligence (BII) report notes that "[m]obile video is quickly becoming a mass consumer phenomenon, much as digital photos were earlier in the smartphone adoption cycle."
BII notes that 4G and LTE -- coupled with device design improvements in screen quality, size, and battery life -- are driving better mobile video consumption trends. Tablet video consumption is higher, but only by approximately 15% when it comes to truly mobile (cellular-based) video consumption. And the overall online video consumption on all non-Wi-Fi devices almost doubled from April 1, 2012, to June 24, 2012, from 2.6% of overall online video consumption to almost 5% of all online video consumption.
The Olympic Effect
These numbers don't begin to tell the whole story, though, because they don't include the single biggest sporting event of 2012, the London Olympic Games. The games did more to shift the playing field toward mobile content viewing than anything else to date.
As we reported during the Streaming Media Europe conference, the BBC Online service during the games reached more than 65% of the adult U.K. population, with staggering global numbers as well.
"57 million browser requests were made to bbc.co.uk," said Jane Weedon, director of business development for BBC Future Media.
"With 12 million video views for mobile devices, and more than 1.9 million downloads of the Olympic smartphone app, more than 34 per cent of content requests to the BBC Sport website were from mobile devices," said Weedon, noting that mobile viewing peaked at almost 40% on the weekend.
The fact that usage peaked on weekends meant that consumers are more comfortable watching breaking sporting events on their mobile devices (or at least are less concerned that they will lose the opportunity to view events as they happen). This viewership appears to have come at the expense of desktop and laptop viewership, with consumers trending toward either the highly mobile screens -- smartphones and tablets -- or the big screen television when they wanted to share the moment with friends.
Even those on smartphones could share the moment with friends, through social media and tweets, which peaked considerably during key live events. Weedon noted that mobile tablet consumption was interesting, with tablets being used both as a second screen -- to catch up on previous events while watching live on television -- as well as just prior to bedtime as the primary screen.
All in all, the total number of video requests -- more than 111 million -- was double that of any previous BBC event, with the trend toward mobile video firmly entrenched in time for next year's World Cup in Brazil and the Olympic Games in the same venues 2 years later.
Time to Segment
Regardless of whether we hoard a device just for ourselves or share it with others, one trend is clear: The consumption of video on mobile devices has grown so rapidly that we now have an opportunity as an industry to begin to segment mobile viewership into categories.
In 2013, there is a firm need to delve into the various types of consumers, their preference for types of video content across each device they own -- or borrow, as we've seen with tablet viewership -- and embrace the fact that the majority of online content viewing is now viewed on portable and mobile devices.
This article appears in the forthcoming 2013 Streaming Media Industry Sourcebook.
