Despite an increasing consumer appetite for digital content, broadcast television still rules the roost. In fact, according to
Nielsen, broadcast television is watched five
times as much as online programs, even though
connected TVs (which include apps capable of
accessing online content) reached 50% market
penetration in the U.S. in 2015.
So, what’s been keeping online video from
really taking off? Well, it’s not the lack of
bandwidth. Akamai has been consistently reporting that bandwidth speeds are increasing
around the world. It’s also not the lack of content availability. Both pure-play over-the-top
(OTT) providers and traditional broadcasters
are jumping into the online video arena. And
before you play the “live sports card,” the NFL
recently announced that live games will be
available as part of its flagship OTT service,
CBS All Access.
If everything seems to be pointing toward online video, why has it yet to become the de facto method by which we consume video content?
In short, it’s the mobile phone.
In a recent study published by the Streaming
Video Alliance on mobile video behavior, we
found that the biggest frustration people have
about watching video on their smartphones is
that it requires data. (The second biggest frustration is buffering.) What’s more, per data from
Netflix, the mobile phone represents only 9% of
primary usage. It’s abundantly clear that people
are reticent about watching video on their mobile phones because it’s going to eat into their
data allowances. And yet, per the same Streaming Video Alliance study, people are beginning
to use their mobile phones to watch more video.
This is especially true of Millennials, who em-
ploy it more often than many other online-video
capable devices including smart TVs, Chrome-
cast, and tablets. This is all in light of the fact
that most of us are carrying around a verita-
ble super computer in our pockets, and we
check them hundreds of times per day. With-
out a doubt, the mobile phone is an important
part of our everyday lives. What I’m proposing
is that our inability to consume more content on
the smaller screen (because of how much data
streaming requires) is what’s really holding on-
line video back.
That may not be the case any longer.
Netflix, the behemoth in global online video
consumption, recently announced that its subscribers can download some content to their
smartphones and tablets for offline viewing.
Amazon introduced a similar plan for Prime
members in 2015. That means data is no longer
required to stream content. Subscribers can
grab what they want (as much as their devices
can hold) while connected to their home Wi-Fi
and watch it whenever and wherever they want,
though both Amazon and Netflix place some
limits on how long subscribers have to view the
content. This will have a huge impact on the
transition away from broadcast television. It
means that people can use the device they have
with them most often to watch video content.
Of course, it’s no longer “online video” when
it’s watched offline, but that is a moot point
when you consider where the content originated. It’s a sign of the “new world order” for the
television experience, and this new Netflix feature punctuates that this transition is going to
pick up some serious speed.
Sure, data and buffering are still issues for
live, linear content (like sports and other events),
but many organizations are working to address
those challenges. Operators are improving their
networks (5G is coming, and multibitrate ABR
is going to happen), and carriers are increasing
consumer data allowances.
Without a doubt, Netflix and Amazon have
removed the shackles for watching video on the
smartphone (it will be interesting to see their
device stats over the next 6 to 9 months). And,
in doing so, they have given an unquantifiable
push to the transition. You just watch—give it a
few months, but I bet when you look around on
that subway ride, or in that grocery store line,
you’ll see a lot more people watching video on
those smaller screens.
Jason Thibeault is the executive director of the Streaming Video
Alliance. Follow him on Twitter @_jasonthibeault.
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