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Mobile Phone Hang-Ups: Viewers Wary of Using Up Their Data
People would stream a lot more video to mobile devices if not for restrictive data caps. But thanks to Netflix and Amazon, things are starting to change.
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Despite an increasing consumer appetite for digital content, broadcast television still rules the roost. In fact, according to Nielsen, broadcast television is watched five times as much as online programs, even though connected TVs (which include apps capable of accessing online content) reached 50 percent market penetration in the U.S. in 2015.

So, what’s been keeping online video from really taking off? Well, it’s not the lack of bandwidth. Akamai has been consistently reporting that bandwidth speeds are increasing around the world. It’s also not the lack of content availability. Both pure-play over-the-top (OTT) providers and traditional broadcasters are jumping into the online video arena. And before you play the “live sports card,” the NFL recently announced that live games will be available as part of its flagship OTT service, CBS All Access.

If everything seems to be pointing toward online video, why has it yet to become the de facto method by which we consume video content?

In short, it’s the mobile phone.

In a recent study published by the Streaming Video Alliance on mobile video behavior, we found that the biggest frustration people have about watching video on their smartphones is that it requires data. (The second biggest frustration is buffering.) What’s more, per data from Netflix, the mobile phone represents only 9 percent of primary usage. It’s abundantly clear that people are reticent about watching video on their mobile phones because it’s going to eat into their data allowances. And yet, per the same Streaming Video Alliance study, people are beginning to use their mobile phones to watch more video. This is especially true of Millennials, who employ it more often than many other online-video capable devices including smart TVs, Chromecast, and tablets. This is all in light of the fact that most of us are carrying around a veritable super computer in our pockets, and we check them hundreds of times per day. Without a doubt, the mobile phone is an important part of our everyday lives. What I’m proposing is that our inability to consume more content on the smaller screen (because of how much data streaming requires) is what’s really holding online video back.

That may not be the case any longer.

Netflix, the behemoth in global online video consumption, recently announced that its subscribers can download some content to their smartphones and tablets for offline viewing. Amazon introduced a similar plan for Prime members in 2015. That means data is no longer required to stream content. Subscribers can grab what they want (as much as their devices can hold) while connected to their home Wi-Fi and watch it whenever and wherever they want, though both Amazon and Netflix place some limits on how long subscribers have to view the content. This will have a huge impact on the transition away from broadcast television. It means that people can use the device they have with them most often to watch video content. Of course, it’s no longer “online video” when it’s watched offline, but that is a moot point when you consider where the content originated. It’s a sign of the “new world order” for the television experience, and this new Netflix feature punctuates that this transition is going to pick up some serious speed.

Sure, data and buffering are still issues for live, linear content (like sports and other events), but many organizations are working to address those challenges. Operators are improving their networks (5G is coming, and multibitrate ABR is going to happen), and carriers are increasing consumer data allowances.

Without a doubt, Netflix and Amazon have removed the shackles for watching video on the smartphone (it will be interesting to see their device stats over the next 6 to 9 months). And, in doing so, they have given an unquantifiable push to the transition. You just watch—give it a few months, but I bet when you look around on that subway ride, or in that grocery store line, you’ll see a lot more people watching video on those smaller screens.

[This article appears in the January/February 2017 issue of Streaming Media Magazine as "Mobile First."]

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