skip to main content

Straight Talk Consumer and Entertainment Services

Ovum view

Historically, many "mobile" video viewers have in fact been stationary, connecting via Wi-Fi at home or in cafés and other public places, for comfort and convenience or to avoid data charges and performance problems. But thanks to faster mobile broadband and more generous data allowances, video is becoming a meaningful force on cellular networks, too. Here are five reasons why:

  • Smartphones are gaining premium video viewers at the expense of other devices in developed markets. In December 2017, 39.0% of online video subscribers surveyed by Ovum stated that they regularly use smartphones to watch premium services such as Netflix, up from 34.5% a year earlier. Significantly, viewing via PCs, laptops, and tablets declined over the same period, suggesting that some respondents had turned away from these devices and toward smartphones.

  • In emerging markets, consumers use smartphones more than laptops and smart TVs for online video. In several emerging markets where many consumers cannot afford or access PCs, laptops, and smart TVs, smartphones are the most popular device for viewing online video. In Thailand, for example, 55% of online consumers surveyed by Ovum last year stated that they regularly use smartphones to view video, compared to 18% and 14% for smart TVs and laptops, respectively.

  • Cellular networks will take a significant share of video traffic in emerging markets. Although this growth in smartphone use has only partly translated into cellular traffic, video-over-cellular viewing will grow strongly over the next few years, to reach 17.7% of global online video traffic. Growth will be particularly pronounced in emerging markets, where the coverage and adoption of fixed broadband will remain low. In India, as much as 40% of video traffic will be carried over cellular networks in 2020.

  • Video-over-cellular will present unique – and growing – challenges. YouTube, Facebook, and Instagram are responsible for the bulk of video-over-cellular traffic. Major free-to-air and pay-TV services tend to account for a few percent overall, but cause disproportionately large peaks with major live sports and news events. Long-form on-demand services such as Netflix generate relatively small amounts of traffic despite their wider popularity, but operators say this is changing, thanks to zero-rated and unlimited tariffs.

  • Operators and content providers have great opportunities to innovate with bundles. Over 80% of consumers surveyed by Ovum in December 2017 said they would be interested in receiving an all-you-can-eat video subscription service bundled with their mobile tariff, with over 44% identifying it as their number one option. Over 60% said a mobile video bundle would make them more loyal to their existing mobile service provider, and 20% said they would consider switching suppliers to access such an offer.

Straight Talk is a weekly briefing from the desk of the Chief Research Officer. To receive this newsletter by email, please contact us.