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Video on mobile still an analyst favorite

Wedbush latest report on mobile video usage offers more predictions on the upcoming explosion on mobile video. The report brings up some interesting items on these predictions:

  • There is a massive expectation in growth where video will equal 66% of mobile data traffic in 3 years (at least according to Cisco), with a 28x growth from 2008-2012 (according to Yankee Group)
  • The growth expectations do not match expectations in revenue growth (15% CAGR in the period)

But look at the charts side by side in terms of growth in phone accessing the internet regularly and the estimates in mobile data traffic, and you really see the disconnect (click to see larger version):

Growth in Data

Phones Accessing the Internet

(Source: Yankee Group, Cisco, Wedbush)

The growth in handsets going online is according to the chart expected to roughly grow by 17% YOY from 2010-2013, while growth in data consumption in the same period is expected to grow 222% YOY! The differences in the growth curve between the two obviously assumes a sudden massive uptake of mobile video in the next 3 years among existing and new handset owners. But unless Hollywood suddenly throws gigantic production budgets behind small screen entertainment formats, or the NFL switches Monday Night Football to mobile only, this is not likely to happen.

Furthermore, the facts are the networks are already congested in many markets today, and upgrades are expensive and time consuming.  Anywhere near a demand predicted by Cisco will strangle many networks, and as I have argued before, if the quality of service is not there, demand will not be there, regardless of how much you like Monday Night Football.  Wedbush makes a strong case for data optimization technologies, and this space will be interesting to watch. I was part of launching a streaming video player back in 2001 where we streamed Big Brother in Sweden on GPRS speeds. My company, Mobile Media, dropped development on the technology at the time to refocus the product line, but the thinking was right back then with regards to data optimization, and it looks to be so in the future.

Posted in Mobile Entertainment, The Business of Mobile.

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