 | Issue: | Latin America 2008 |
| Article no.: | 12 | |
| Topic: | Clearing the static about mobile video | |
| Author: | Francisco Varela | |
| Title: | Strategic Partner Development Manager | |
| Organisation: | YouTube | |
| PDF size: | 271KB |
About author
Francisco Varela leads mobile operator relationships for YouTube. He has global responsibilities for creating and overseeing YouTube’s strategic partnerships with companies such as Vodafone, T-Mobile, Verizon, Sprint and DoCoMo. Mr Varela also works on product strategy for the YouTube mobile site and other YouTube syndication efforts. Prior to joining YouTube, Mr Varela worked for the mobile software company Openwave Systems in London, responsible for Openwave’s EMEA legal team. Mr Varela also spent nearly five years as International Counsel at Yahoo! Inc., where he worked on Yahoo!’s strategic alliances and acquisitions. Mr Varela earned his Juris Doctor degree from the University of California, Berkeley, and was selected in his third year to study at the Harvard Law School.
Article abstract
Consumer demand for mobile video is driving increased content availability and cooperation among industry players. While much of the demand is entertainment-focused, mobile video is also offering real social benefits. Governments and NGOs need to focus upon ways to use mobile video more efficiently to meet societal challenges such as education, health and poverty. Industry players must now begin to work together to standardise platforms, and provide a uniform experience for consumers and advertisers alike. A common platform can build profitability.
Full Article
While overseas on vacation, I wanted to send a video to our relatives back home. I could imagine the smiling faces as I shared this beautiful beach moment in almost real-time. With my mobile phone I recorded a short video of my daughter building in the sand. I was about to send the video out, but I had some doubts: • Do I want to spend ten minutes sending each individual a MMS?; • Will the video play properly on each of their phones?; • Can their local mobile networks handle video messages?; and • How much will this cost to send? It’s only a minute of video, but on our last trip I was horrified by the cost of international text. I quickly realized it would be easier, and cheaper, to download the video to my laptop and send it from an Internet café. My problems are common, and they plague mobile video delivery and consumption. If we want to use mobile services to generate social interaction and information, then we need to focus upon eliminating technological complexity and barriers in the mobile video experience. The challenges are formidable, but companies that succeed in improving the mobile video experience will be rewarded with greater market share and consumer loyalty. Mobile video demand From the vacuum cleaner to the personal computer, we have seen how innovative products create consumer demand. Apple’s iPhone resolved long-standing questions about demand for next generation services on mobile devices. The phone’s simple, intuitive, interface gave even inexperienced users access to applications and websites previously reserved for PC users. The iPhone makes mobile video easy, so users quickly become regular mobile video consumers. However, ease of use is only half the reason for mobile video’s success on the iPhone. For in-country users, mobile operators established unlimited, flat fee, data plans so viewers did not have to worry about a sky-high data bill at the end of the month. Do you want to send a video or receive an SMS with a video URL? No problem – it is all covered by the flat rate. It is clear that consumers want data intensive services on their mobile device – they just do not want to suffer to pay for them. We have seen terrific subscriber increases on high-speed 3G or better networks. The GSM Association reported in August that HSPA (High Speed Packet Access) subscribers rose from 11 million to 50 million during 2007. The deployment of WiMAX and LTE (Long Term Evolution) networks will bring even greater speeds for data hungry consumers. Industry cooperation Fortunately, within the last year or so mobile operators and device manufacturers have made great efforts to enable more appealing next generation experiences. Increasing numbers of carriers have introduced fixed-cost high capacity or unlimited data plans, and at least seven new handsets have next generation interfaces and full Internet browsers. The development of Internet browsers of these advanced handsets is vital. Due to the range of handsets and operating systems, mobile video providers must adapt their content and applications using handset-specific software interfaces. They need to develop mobile browsers that, similar to the PC – provide a uniform and seamless experience for all mobile platforms and devices. Consumers need a common Internet-based platform for viewing, sharing and uploading their video experiences no matter what device they use. Societal benefits The demand for next generation mobile services is clear, and the industry is moving in the right direction, but what will be the gains for society, particularly for developing countries? Most of us have received links to web videos. You may even have uploaded your own videos, but few people have experienced examples of Web-based video beyond entertainment and limited news clips. The former President of Peru, Alejandro Toledo recently visited our offices. He quickly grasped the basic concepts of Web-based video technology and how it could contribute towards education and the fight against poverty especially in remote and sparsely populated regions where fixed line broadband cannot reach. Aid workers, for example, are limited in the reach of the programmes they can deploy; there are areas they cannot even attempt to access due to the dangers including health and safety concerns. Mobile services, however, can easily reach many previously unconnected areas. Imagine how much easier it is to teach people about proper water purification or early immunizations when the information is delivered by video in their native language, instead of by an aid worker with a field manual speaking another language. With relatively small capital investment costs, NGOs can use Web-based mobile video to reduce training costs and the field costs for aid workers. By working together to produce a series of educational videos about basic health issues, formatted for mobile Internet access, NGOs could further reduce costs and increase effectiveness. There are a number of technical and organizational obstacles, but this is easily and quickly achievable. Society is already profiting immensely from ‘citizen journalism’. In July 2005, a series of coordinated bomb blasts hit London’s public transport system during the morning rush hour. The first images most of us saw of the attack were mobile videos captured by the public. While the pictures were of poor quality, stomachs clenched with the images of smoke filled stations on our screens. This event gave us a glimpse of the power of mobile video as a source of raw, on the spot, news. Recently, Reuters and Nokia cooperated on a mobile journalism trial; Reuters featured the best raw news stories from the public on its site. Hundreds of thousands of people have downloaded popular news clips posted by independent mobile journalists. Some of the mobile videos, such as the assassination of Benazir Bhutto in Pakistan, have had a global impact; they have been seen by millions of viewers around the world. Similar to PC-based video, mobile video consumption habits and popularity will evolve, and occasionally surprise; it will benefit society by bridging existing technology and information gaps. Profitability The growing usage of mobile video will bring greater profitability to companies that invest in a better mobile experience. With voice call revenues declining and the saturation of key mobile markets, both mobile operators and device manufacturers need to continue diversifying their products. Video is the most data intensive mobile device service. Except for business subscribers, few consumers will need an unlimited data plan unless they view videos on their handsets. We are already seeing that consumers are willing to pay both for the device and the accompanying plans to access video services. In July of this year, AT&T reported a thirty per cent increase in second quarter net income as wireless data revenues grew to US$2.5 billion. Mobile data revenues increased by more than fifty per cent compared to the prior year. This growth was credited both to an increase in subscribers, many lured by the iPhone, and the rising demand for data resulting from increased smartphone penetration. Roughly 18 per cent of AT&T subscribers now have smartphones or integrated devices. These subscribers include non-business consumers, such as university students, who are purchasing smartphones because of their ability to access the mobile Web and videos. Mobile device manufacturers will also benefit from rising demand for full featured data devices with video view and capture functionality. The market research firm Canalys estimates that shipments of high-cost smartphone units next year will increase by more than 30 per cent to 241 million units and another 19 per cent the year after. We also see tremendous growth in mobile video advertising. Mobile advertising will only reach its full potential with a better, more unified, mobile video viewer experience. Currently, advertisers must split their spending between Internet based mobile video sites, mobile software applications and even operators with proprietary video sites. In short, an inefficient and confusing situation compared to PC advertising where advertising budgets are allocated among competing sites on the same commonly understood Internet platform. Even with these existing inefficiencies, iSuppli corporation estimates that mobile video advertising revenue will reach US$1.5 billion in 2009 and over US$3.7 billion in 2011. Companies that invest in next generation mobile network, hardware and services will find that consumer demand for video will provide a separate revenue stream that supplements and will eventually eclipse existing revenue sources.
