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The State of Mobile Video 2018

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The second motivation we can infer from the “National Security Strategy” report is how the vision for 5G deployment and use in the country will benefit other major infrastructure like transportation. Recent train derailments and autonomous car tragedies could, in theory, be prevented or mitigated should these ultra-low-latency networks be used in the right way. When the machines transporting us can all communicate with each other in real time, accidents can be prevented by technology.

Finally, the government wants 5G for its own advantage as well. The military will no doubt be using 5G (if it isn’t already) for critical tasks such as remote drone operation and real-time global communication. Local governments can rely on the networks for whole-city infrastructure monitoring and control. Traffic lights, street lights, utility usage monitors, and city transit networks are all items that could be improved and streamlined with the addition of some relatively simple technology.

5G is the next big thing. The applications possible with these upcoming networks are practically endless. The additional bandwidth to stream 4K and HDR content to our mobile devices will certainly be a huge boon to the streaming industry, but seeing that as the end-game is grossly underestimating what we can do once we see large-scale adoption of the technology.

One aspect of mobile video that will benefit greatly from faster 5G networks is video advertising. The video ad industry is expected to hit $8 billion by 2019. And considering mobile video ads are considered to be about three times as effective than other platforms, it’s no wonder businesses are spending like crazy on them. The miniscule 1-millisecond latency of 5G will make buffering a thing of the past. Both the ads and the desired content will load quickly enough to prevent users from experiencing the “dead air” of buffering that drives them away. Since user attention spans can be very fickle, this will be key to maintaining high engagement levels.

Another factor to contend with is the ubiquity of autoplay videos and how consumers are dealing with them. More browsers are providing the ability to disable autoplay. Chrome introduced it in January 2018. Safari had the preference built in earlier in 2017. Firefox is capable of stopping autoplay, although it takes an extension or some digging to find it. Even if a viewer does let your video autoplay on a social platform like Facebook, chances are they won’t listen to it. That’s because 85 percent of Facebook videos are viewed on mute, and the completion rates for videos are a paltry 12 percent in the U.S. The German people must be a patient bunch. Their completion rates for Facebook videos are the highest, nearing 25 percent.

The most recent data from the “Ericsson Mobility Report” reveals that 55 percent of mobile data traffic is video content. Don’t breeze by that number. That means that more than half of the data used by consumers each month is strictly video content. This is people watching YouTube, streaming their favorite shows and movies from SVODs, and all social network and live video content. Only 45 percent of their data is spent on audio, web browsing, other social network activity, software downloads, and file sharing combined. Email doesn’t even rank as its own line item. Now that that number has sunk in, fast forward to 2023. At that point, analysts expect video to consume 75 percent of users’ data. And at that time, 95 percent of mobile data traffic will be coursing through smartphones. Tablets, routers, and PCs will make up the remaining 5 percent. As time goes on, the smartphone grows larger and larger on the scale of important devices for which to deliver content.

Finally, let’s not leave the Internet of Things (IoT) devices off of our list. While producers and content creators aren’t having to create video for things like smart doorbells and pet cameras, these devices are certainly going to make a significant impact on the ubiquity of video in our lives. And who’s to say Amazon won’t unveil an ad-supported home security system? They already did it with the Kindle.

Those smartphones that we just discussed will be the primary viewing portal connecting us to the aforementioned IoT devices. In fact, one family recently had their lives saved by a connected doorbell when the device’s motion detection sent an alert to a phone because it picked up on a fire raging on their front porch. Although these devices can be incredibly useful when paired with a home Wi-Fi network and smartphone, their security has been drawing criticism. Again, 5G will play a critical role in making these convenience devices even more viable for average consumers. Being able to communicate in real time to Fido at home or the neighbor at your door will make people’s lives easier and less stressful. With a compound annual growth rate expected to be around 28.5 percent over the next few years, the IoT market is expected to have an economic impact of anywhere from 4 to 11 trillion dollars by 2025.

The key takeaways for the 2018 mobile video outlook can be boiled down to the following: device consistency, massive content consumption, 5G almost but not yet, and IoT device explosion. Everything about our smartphones has become as stable as it’s ever been. Screen sizes are staying mostly consistent. The global OS battle rages on, but the Android (87.7 percent) versus iOS (12.1 percent) battle is at a stalemate. All the rest of the competitors are still relegated to a collective “other” in statistics. Aside from that, most devices are good enough for most consumers, so people just pick what they want and move on for another 2 to 3 years.

Viewers continue their meteoric rise in mobile video consumption. Ads and content will continue to grow at a fast clip, and the revenue both spent and earned on this content will grow accordingly. Expect more “walled gardens” as networks and production companies develop their own SVOD services containing their own exclusive content. The biggest of them all, Disney, plans its own service to launch in 2019. The cord cutters who want to cherry pick only the shows, movies, and networks they want are slowly getting their wish. It’s just going to cost a lot more than they expected.

5G is coming; it really is. But 2018 will not be a year that has a significant impact on mobile users. We won’t see any viable handsets until at least 2019 or 2020.

The Internet of Things often relies on video, but we don’t expect to have to sit through a 15-second ad before we can see who rang the doorbell. That doesn’t mean that video doesn’t play a pivotal role in the success of this new market, though. From pet and kid monitoring to safety and security, IoT devices will be called upon more and more to inform owners via their smartphones while they’re on the move.

[This article appears in the 2018 Streaming Media Industry Sourcebook as "The State of Mobile Video 2018."]

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