Friday, December 10, 2010, 10:31 AM ET|Posted by Will RichmondOnce again I'm pleased to offer VideoNuze's end-of-week feature highlighting and discussing 5-6 interesting online/mobile video industry news items that we weren't able to cover this week. Read them now or take them with you this weekend!
4G's performance impresses, lays groundwork for mobile video explosion
Last weekend, Verizon Wireless launched its upgraded "4G LTE" network in 38 U.S. markets including Boston. I was among the eager beavers that stopped by my local Verizon store this week to check it out. As all of the reviews have said, it is blazing fast and very impressive, delivering download speeds comfortably in the 5-12 megabits per second range promised. 4G service from Verizon doesn't come cheap: $50/mo for a 5GB allowance and $80/mo for a 10GB allowance. However, what's most salient to me is how 4G delivery (and even faster future wireless technologies) is going to power an explosion of mobile video viewing. Initially this will be primarily short-form as users are conscious of not exceeding their caps. As more people get exposed to just how good video looks on mobile devices using 4G connections, and the devices themselves proliferate, usage will surge, following the same growth curves seen in Asia. The "broadband" video experience is very quickly getting untethered, allowing out-of-home experiences comparable to those in-home.
Mobile video usage grows in Q2 '10
Setting the stage for 4G mobile viewing, this week Nielsen released data on Q2 '10 mobile video usage, which is already showing strong growth. Mobile subscribers watching mobile video jumped to 22 million, up 43% year-over-year. That's still small relative to the online video users each month and tiny compared to TV viewers, but the growth shows mobile video is beginning to catch on. And while the minutes/user/month at 3:37 in Q2 was up only slightly YOY, and again is minuscule compared to online and TV, all the building blocks are in place for rapid expansion: better bandwidth (4G), explosion of mobile video devices (smartphones, iPad, tablets) and content (both premium and independent). Mobile video is poised to be a very big story in 2011.
Strong online video advertising growth projected through 2014
Speaking of growth, eMarketer's forecast of online advertising offered a bullish outlook on online video advertising's future. As it has said previously, eMarketer sees online video advertising as the fastest-growing category in the next few years, increasing by over 30% per year to almost $6 billion by 2014. As other online ad formats begin to mature, online video ads' share of the market will double to 11.3% in 2013. Key to the growth forecast is adoption by big brand marketers, and consumer goods companies in particular due to the superior branding opportunities that online video advertising offers. Something not mentioned in the forecast that I think is also important is the tremendous innovation happening in the types of online video ad formats and engagement opportunities. For example, just this past week brought new formats from Panache, YuMe and Mixpo, with plenty more on the way.
Netflix signs Disney-ABC, further squeezes Hulu Plus
As has seemingly been the case throughout 2010, it was another week and therefore another significant streaming content deal announced by Netflix. This week it was with Disney-ABC for a catalog of ABC, Disney Channel and ABC Family programs including, for adults, "Grey's Anatomy," "Desperate Housewives," "Lost," "Ugly Betty" and "Scrubs" and for kids, "Phineas and Ferb," "Good Luck Charlie," "The Suite Life on Deck," "Wizards of Waverly Place," "Hannah Montana," and "The Suite Life of Zack & Cody." The Disney-ABC deal underscores how strongly Netflix is broadening its focus from movies to TV shows, and the LA Times estimated its value at $200 million. Company CEO Reed Hastings put an exclamation on that strategy this week too, saying that the company "can live without" a renewal of its Starz deal (though I'm not so sure). Time Warner CEO Jeff Bewkes may think Netflix's lineup is "measly," but with each passing week it's getting more substantial.
Something else the Disney deal reinforces is how Netflix has put Hulu Plus between a rock and a hard place in its own content acquisition efforts. Back in September, in "Netflix's Expanded NBCU Deal Further Marginalizes Hulu Plus" I first explained how Hulu Plus is getting squeezed from all sides: by Netflix, by pay-TV operators' TV Everywhere plans and even by its own free Hulu.com site, which accounts for over 88% of the content also available on Hulu Plus. It may well be that Hulu Plus is exceeding initial expectations, but I'm hard-pressed to see how it really grows given its content acquisition limitations.
HDTV antennas gain in appeal, as part of cord-cutters' bundle
There was a widely circulated NY Times article this week about inexpensive HDTV antennas, which did a nice job of explaining the pros and cons of the seemingly retro approach. Of course the big pro is that antennas provide pretty impressive access to over-the-air HDTV broadcast signals, which in turn allows pay-TV subscribers so inclined to cut the cord. In fact a combination of an inexpensive antenna, an inexpensive connected device (e.g. Roku, Blu-ray, etc.) and subscriptions to Netflix and Hulu Plus would probably be pretty compelling to a swath of American pinched by the economic downturn. The big loss in such a setup would be the live sports programming only available on cable, though some of this could be mitigated by subscribing to MLB.tv and other league services. I don't see antennas sweeping the nation any time soon, but as awareness of them - and other over-the-top solutions grow, it will only further fuel awareness of the cord-cutting option.
Enjoy your weekend!
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Video Research Around the Web
- U.S. Homes Adding SVOD Services Falls To 3.9% in 2Q, Kantar Reports B&C
- As streaming surges globally, Roku is falling behind abroad Protocol
- World-Wide Streaming Subscriptions Pass One Billion During Pandemic WSJ
- Cable Now Controls Nearly 70% of U.S. Fixed Broadband After Biggest Year Since 2008 Next TV
- Cord Cutting’s Worst Year Ever: Analyst B&C
- Disney Plus Will Surpass Netflix in Customers by 2026, Research Company Says Next TV
- Tubi Says Streaming Rose 58% In 2020, With Half Of Viewers Younger Than 35 Deadline
- U.S. SVOD Revenue Spiked 39% in Q3 to $5.5 Billion Next TV