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The State of Mobile Video 2013
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."