There have been several research reports lately predicting an explosion in mobile data usage, mainly attributed to an expected explosion in use of mobile video. A recent article on a report on mobile data by Coda research consultancy again brought up the forthcoming crash in network capacity for mobile operators, mainly due to mobile video. Wedbush Morgan and Cisco addressed this just a few months ago as well, where Cisco contributes most of the expected growth to mobile video. Coda is slightly more conservative in their estimates, saying the US will experience about 327 petabytes (petabyte = 1m GB) of usage in 2015, vs Wedbush expecting this to be reached around two years earlier. The number by itself means very little (unless you are a hardcore network techie), but just consider it a 40-60 fold increase in the next few years, and think of the streaming video quality on your 3G handset as you move around the city, and you will realize problems are afoot.
Mobile Data Traffic PB/Month by Geography
A lot of hopes are pinned to the upcoming world cup coverage, and UK research agency Mobile Squared predicts this event will be pivotal for the uptake of mobile TV. Clearly, content – along with flat rate data pricing – is a key driver for uptake:
But here is the thing: If the quality of the network is not there, well, then the usage will not be there. Users simply will not accept being charged for a service when the quality of service is poor. It does not matter if the world’s coolest content suddenly becomes available on mobile (Avatar 2 mobile only? Come on James, it can be done!), as mobile users simply do not have patience with poor quality, and mobile operators know too well what it costs to have people call and complain. Sorry football fans, unless you are in a wifi zone, I’d head for the nearest pub rather than relying on your phone to give you the live coverage you so desperately need (benefits include beer and avoiding 90 minutes of squinting to see the ball). Mobile operators better hope users will either be on wifi or at the pub, or they will have to prepare their call centers for a tough few weeks this summer!
Also, although business models are becoming more attractive for mobile content in general due to Apple showing that 70/30 works for getting content providers excited, keep in mind that even the online business case for video is not quite there, and although the mobile platform is great for charging for content, the revenue models for mobile video are hardly there yet. Mobile Squared do point out that at least various charging models are in place, but greedy revenue shares by operators will be a hindrance until resolved.
So although I do support the concept of mobile video – in fact, one of my partner companies, RubberDuck Media Lab, is experiencing huge demands for their platform, I think this is another case where the industry is over estimating the impact in the short run – but where it will all be under estimated in the long run. As a media company or mobile operator though, you have no chance but to jump into it, because customers are starting to demand it – for the World Cup and beyond.