Video and Content growth wave in the new Mobile economy
A research report by Ericsson endeavours to put some numbers to global data traffic projections: Mobile broadband subscriptions are expected to reach almost 5 billion in 2016, up from the expected 900 million by the end of 2011.That would represent 60% CAGR. Total smartphone traffic is expected to triple during 2011 and increase 12 fold by 2016 (roughly equal to PC generated traffic). Growth in mobile data traffic between 2011 and 2016 is mainly expected to be driven by video. By 2016 more than 30 percent of the world’s population will live in metropolitan and urban areas with a density of more than 1,000 people per square kilometer. These areas represent less than 1 percent of the Earth’s total land area, yet they are set to generate around 60 percent of total mobile traffic. Overall, an increase in mobile broadband, new smartphones, and higher app consumption will all drive the push for more data and Smartphones alone will account for a huge part of that.
Compare this to the growth in Global consumer Internet traffic which is expected to grow 5X during 2009-14 (CISCO report). Though the time intervals for both these data points are not concurrent, it highlights the growth perspective in data/internet led networks. The same report puts the growth in Mobility based data at 39X between 2009 and 2014. Increasing Video traffic driven by live video and TV are expected to drive global consumer internet video consumption by a factor of 10X between 2009-14 (and to me that is massively understated). The growth in Internet video consumption will be prevalent across all categories of Video: Internet to PC (Long, Short and Live), Internet to TV and Ambient Video/Internet PVR.
Driven by Lifestyle requirements, Living situation and Employment status, consumption of Internet video content is accelerating at a smart pace even as Content and its discovery itself is becoming smarter. What could this mean for consumers and the service providers ?
For the consumer: They would seek for capabilities that enable them to easily and securely access content, applications and infrastructure they seek from any location or device.
For the service provider: It would mean infrastructure capabilities that are re-usable, expandable, scalable for quick time to market and better insight and control over consumer’s end to end experience. Smart content delivery networks constitute a $6bn-$15bn market for service providers by 2015. Massive internet video growth drives puts forth huge operating challenges but also very unique revenue and monetization opportunities. Content management will perhaps not be enough unless the service providers are clear on their consumer segmentation, segment focus and positioning strategies and how much money could be made on these services. Again since this sector is fairly nascent at this point of time, regulatory and anti-trust considerations could also be key influencers.