(Note: Each day this week I'm writing about one key takeaway from last week's CES 2011. Also, next Wednesday, January 19th, The Diffusion Group's Colin Dixon and I will be hosting a complimentary webinar, "Demystifying CES 2011," in which we'll discuss key CES highlights and answer participants' questions.)
One of the clear trends that emerges from the video-related product announcements at CES 2011, and in the months leading up to it, is that mobility is video's next frontier.
Just as online video adoption grew out of massive online Internet use, mobile video consumption is going to ride the tremendous wave of mobile Internet use. And by many accounts mobile Internet usage is on the cusp of a massive expansion. The analyst Mary Meeker believes that by 2014 there will be more mobile Internet users globally (about 1.6 billion) than desktop Internet users. In just the past year, the number of Americans who have used the Internet from their mobile phones has increased from 32% to 40%, with those reporting they accessed the 'net several times a day from a mobile phone jumping from 24% to 43%, according to Pew.
Unquestionably the big growth in mobile Internet use has been facilitated by the explosion of video-friendly smartphones and tablets. Indeed CES could have almost been renamed "Tablet-Fest 2011" as numerous tablets were introduced, all seeking to imitate the iPad's huge success. In 2011, IDC predicts 330 million smartphones and 42 million tablets will be sold worldwide. In the U.S., Nielsen estimates that by the end of 2011, smartphones will have a greater market share than feature phones. Certainly Verizon's iPhone announcement yesterday is another smartphone accelerant, with Verizon loyalists finally gaining access to the iconic device. A recent study from MeFeedia underscored Apple's role in driving mobile video adoption: 43% of mobile video usage was from iPhones and iPads, with Android bringing in 21%. In addition to the proliferation of devices, the rollout of speedy 4G networks will make mobile video consumption easier and more pleasing to viewers.
These factors are already driving mobile video adoption. In Q2 2010 (the most recent quarter where data is available from Nielsen), almost 22 million Americans watched mobile video, up 44% from a year earlier. Admittedly, the 3 1/2 minutes hours each user watched per month is a drop in the bucket compared to current TV and online viewing, but the amount will no doubt increase rapidly. Notably, teens watched over 7 minutes hours per month in Q2, providing a glimpse, yet again, into how digital natives are the fastest adopters of emerging technologies. In fact, another recent study indicated that video viewing is already the number one mobile application at 35%, with YouTube alone gobbling up an incredible 13% of global mobile data bandwidth (for its part YouTube recently said its mobile site received 7.1 million visitors per month, and that 75% of m.youtube.com users said mobile was their primary way of accessing YouTube).
Put it all together and it's clear that mobile video use is real, and poised for significant growth ahead. But while it's tempting to think that mobility only means "out of home" mobile video use, in reality another dimension of the change ahead is mobility within the home. On this point, tablet apps from Netflix, Hulu Plus and others, along with those more recently announced by pay-TV operators, enable tablet-based viewing of both live and on-demand programming are also meaningful. It may not seem quite as sexy to be able to roam to various rooms in a house to watch your favorite show on a tablet, but in reality, it's very convenient and flexible. It's also a potential money-saver, allowing rooms without set-top boxes, or even TVs, to now be usable for video viewing.
It's also important to note that mobility doesn't only mean entertainment-oriented applications. Apple's "FaceTime" video chat app, introduced with the iPhone 4, and Skype's new video calling feature are both great examples of communications uses. Then there are the mobile video capture and live streaming applications inherent to mobile devices. Just last week, Skype's acquisition of mobile video platform Qik underscored the growth ahead in that space. Add in the various enterprise, user-generated, commerce, location-based and other uses, and it's clear that video mobility has a breadth of opportunities ahead.
For participants in the video ecosystem, mobility is the new watchword. Just as mobile phones taught us not to think in terms of fixed lines only, and smartphones have taught us not to think of computer-only Internet use, video must now be thought of as untethered from a fixed location. That's a pretty exciting prospect.