Juniper: TV & video's multi-screen future is on smartphones, tablets
Until comparatively recently, watching TV or video on a mobile device was simply not a great experience; the poor quality displays meant viewers spent most of their time squinting at the device, that is, if the content loaded in the first instance. However, over the past two years, the quality of the viewing experience of TV and video on smartphones, tablets and even high-end feature phones has increased dramatically. Faster processors, better quality displays and greater access to Wi-Fi has led a large proportion of users to watch content on their device every day. In fact, some mobile devices are streaming content at a comparable quality to an HD TV. The scale of this trend is highlighted in Juniper Research's recent report, Mobile/Tablet TV & Video: Content, Broadcast and OTT Strategies, which forecasts the total number of people viewing content on a tablet, smartphone or feature phone to rise to over 2 billion by 2017.
Nevertheless, this growth in the mobile TV and video market has not marked the end of the traditional TV market; it has arguably strengthened it. It has led to the establishment of an ecosystem around multiple devices, or, as it is widely referred to as, the multi-screen environment. No longer is the home TV the exclusive screen for viewing content; consumers are increasingly accessing content on their aforementioned smartphones and tablets, in addition to PCs and laptops, and are frequently doing so while watching the larger screen in the corner of the living room.
Meanwhile, the presence of the OTT content providers is reshaping both the ways in which content is delivered and the strategies with which the more established providers monetize their own offerings. Indeed, given the fairly disparate nature of the core business models of the assorted providers, it is fair to say that the mobile TV ecosystem has become somewhat complicated. For instance, there are YouTube and Netflix, which both stream to mobile devices but monetize their content differently, pay-TV and free-to-air TV providers which both offer VOD (Video-On-Demand) services to mobile devices, and then there are triple-play providers, such as AT&T who provide cable TV, broadband and telephone services. These triple-play providers sit at the center of the "cord-cutting" debate: namely, are pay-TV viewers cancelling their cable TV in favor of services from Netflix, Hulu and Amazon Instant Video? These streaming subscription providers are certainly strengthening their value propositions--Netflix's original series House of Cards was, arguably, a great success; Netflix viewers enjoyed being able to watch as many episodes of the series as they liked on the first day of release, a move away from the traditional linear broadcasting model. Furthermore, they were able to watch content on whichever Netflix-supported device they pleased. One could maintain that the next strategic move for companies such as Netflix to follow would be to utilize cloud technology, allowing users to pause content on one device and resume viewing on another.
Aereo is another player disrupting the traditional value chain. Aereo is a company which allows New York-based subscribers to place-shift TV to their Internet connected device via tiny individual antennas. The service has been embroiled in lawsuits from several US broadcasters on the grounds of copyright infringement, however Aereo is continuing to expand, recently launching the service in Boston and claiming it will offer the service to 20 other cities by the end of 2013.
Although these services allow users to watch content on smartphones, the real home for mobile TV and video is the tablet. The introduction of the tablet as a mass-market consumer product has allowed the mobile TV and video market to grow to the popularity it has reached today. The larger screen size of tablet devices means that when watching films and TV shows, viewers can easily pick out details essential to the plot line. Nevertheless, smartphones are an increasingly viable option for watching content, especially shorter content which users "snack" on, such as 30-second YouTube videos, which can be easily shared on social networks.
Smartphones do have a further use though, as the second screen in this ecosystem. When watching TV shows, viewers often want to access further information about the show, such as player statistics during a football match, actor information during a film or to simply share their feelings about a show on a social network. For instance, during Beyoncé's half time performance at the 2013 Super Bowl, Twitter saw a staggering 268,000 tweets-per-minute. While it is (for the moment at least) unknown precisely how many of these were on mobile devices compared to desktops, the likelihood is that the overwhelming majority hailed from mobile, given the convenience of using a smartphone to access social networks while watching TV.
The key message of Juniper's Mobile/Tablet TV and Video report was that a multi-screen environment has been created. Consumers expect to be able to access content on whichever device they please, and the role of smartphones and tablets in this ecosystem will grow in importance. Mobile devices are used to watch, discover, research and communicate about content, and the innovative players within this market will take advantage of cloud technology, new monetization models and changing consumer preferences to ensure they can see a slice of the $9.5 billion revenues which will be generated in 2017.
Siân Rowlands is a Research Analyst with Juniper Research. Her areas of focus include mobile content and applications.