Service provider revenue from mobile video services jumped 317 percent to almost $200 million worldwide from 2005 to 2006, and is expected to triple in 2007, says market research firm Infonetics Research in its latest report.
Similarly, the number of worldwide mobile video subscribers increased more than 300 percent between 2005 and 2006, and is set to soar to over 46 million by 2010, the report shows. Drivers for this strong growth include increasingly powerful and efficient handsets and the expected analog broadcast signal switchoffs.
"We will continue to see healthy growth in the mobile video services market as mobile operators expand the bandwidth of their existing 3G networks through HSDPA and MBMS, roll out dedicated broadcast networks, and deploy new mobile video service delivery platforms (SDPs). Competition among service providers will keep subscription prices lower in the long term, but that revenue will be supplemented by incremental service revenue from on-demand viewing. We expect to see a spike in mobile video service revenue in 2008 due to the Summer Olympics in Beijing which, similar to last year's World Cup, is a deadline for many operators to get their mobile video services up and running," said Jeff Heynen, directing analyst for broadband and IPTV at Infonetics.
Given the consistent results of the leaders within Asia-Pacific, I'm now wondering if mobile video services will always be a premium niche product in North America. Clearly, the business model in South Korea and Japan is no mystery to U.S. carriers, and yet they continue to price video services to appeal to a small subset of their subscriber base. Time will tell if that model will support the subscriber base, and deliver enough margin to cover the cost of their infrastructure investment.
Granted, if a carrier is incapable of building a solid advertiser-supported model that stimulates user adoption, then a high-priced subscription model may be the most suitable fall-back marketing approach. However, I believe that the telco trend to divest their Yellow Page businesses is inherently very short sighted -- since it's not just a directory publishing business, it's a local advertising business.
Meaning, as more and more small businesses discover the emerging opportunity to apply video advertising to their marketing mix, most U.S. telcos will have missed this new opportunity due to their myopic thinking regarding how to leverage a key asset -- prior SMB advertiser relationship development, and associated local market development.
Infonetics report highlights follow:
- Asia Pacific will be the regional stronghold of mobile video subscribers through at least 2010, with 57 percent of the world total in 2006, followed by EMEA at 31 percent, North America at 10 percent, and CALA at 3 percent.
- SK Telecom in Korea and NTT DoCoMo in Japan offer their mobile video services essentially free (advertiser supported), a major reason Asia Pacific's share of mobile video service subscriber revenue is about half that of EMEA, despite having almost twice as many subscribers.
- The number of mobile video handsets sold worldwide nearly doubled from 2005 to 2006 (including video-capable handsets not necessarily tied to a specific mobile video service).
- Mobile video service ARPU (average revenue per user) in all regions increases significantly from 2006 to 2010, tripling in Asia Pacific (from a low base) and more than doubling in CALA.
Similarly, the number of worldwide mobile video subscribers increased more than 300 percent between 2005 and 2006, and is set to soar to over 46 million by 2010, the report shows. Drivers for this strong growth include increasingly powerful and efficient handsets and the expected analog broadcast signal switchoffs.
"We will continue to see healthy growth in the mobile video services market as mobile operators expand the bandwidth of their existing 3G networks through HSDPA and MBMS, roll out dedicated broadcast networks, and deploy new mobile video service delivery platforms (SDPs). Competition among service providers will keep subscription prices lower in the long term, but that revenue will be supplemented by incremental service revenue from on-demand viewing. We expect to see a spike in mobile video service revenue in 2008 due to the Summer Olympics in Beijing which, similar to last year's World Cup, is a deadline for many operators to get their mobile video services up and running," said Jeff Heynen, directing analyst for broadband and IPTV at Infonetics.
Given the consistent results of the leaders within Asia-Pacific, I'm now wondering if mobile video services will always be a premium niche product in North America. Clearly, the business model in South Korea and Japan is no mystery to U.S. carriers, and yet they continue to price video services to appeal to a small subset of their subscriber base. Time will tell if that model will support the subscriber base, and deliver enough margin to cover the cost of their infrastructure investment.
Granted, if a carrier is incapable of building a solid advertiser-supported model that stimulates user adoption, then a high-priced subscription model may be the most suitable fall-back marketing approach. However, I believe that the telco trend to divest their Yellow Page businesses is inherently very short sighted -- since it's not just a directory publishing business, it's a local advertising business.
Meaning, as more and more small businesses discover the emerging opportunity to apply video advertising to their marketing mix, most U.S. telcos will have missed this new opportunity due to their myopic thinking regarding how to leverage a key asset -- prior SMB advertiser relationship development, and associated local market development.
Infonetics report highlights follow:
- Asia Pacific will be the regional stronghold of mobile video subscribers through at least 2010, with 57 percent of the world total in 2006, followed by EMEA at 31 percent, North America at 10 percent, and CALA at 3 percent.
- SK Telecom in Korea and NTT DoCoMo in Japan offer their mobile video services essentially free (advertiser supported), a major reason Asia Pacific's share of mobile video service subscriber revenue is about half that of EMEA, despite having almost twice as many subscribers.
- The number of mobile video handsets sold worldwide nearly doubled from 2005 to 2006 (including video-capable handsets not necessarily tied to a specific mobile video service).
- Mobile video service ARPU (average revenue per user) in all regions increases significantly from 2006 to 2010, tripling in Asia Pacific (from a low base) and more than doubling in CALA.