People have been turning to the Internet for news and entertainment for years. But as smartphone and tablet use has skyrocketed, so too has mobile video consumption. More viewers are choosing to access news and sporting events online in part because more live video content is available online. More businesses are using videos to engage customers. More consumers are accessing videos for product research and how-tos. More original content is available than ever before.
Millennials are mobile. They are the future of this industry.
Maribel Lopez, founder of San Francisco-based Lopez Research notes that there are "so many dimensions to mobile video."
"I'm noticing video as a customer care trend. You're seeing video for patient care, video for business travelers to the family," she said.
Huge Growth in Video Viewing
Ooyala, a Santa Clara-based video publishing and analytics company, recently released a report indicating that smartphone and tablet video views more than doubled between the third quarter of 2013 and the third quarter of 2014. Smartphone and tablet video views made just six percent of all online video views in the third quarter of 2012. Since then, growth has exceeded 400 percent, according to Ooyala.
"The way they access TV is on a laptop over Wi-fi, or smartphones or tablets," he said. "They don't look at a big screen as something they want or need. Or if they are watching something on a big screen, they'll be using smartphones to access other content or info about what they're watching."
Millennials & Multiscreen Viewing
Other research supports this. An August 2014 eMarketer report called "Tablet and Smartphone Video Viewing: Multiple Screens, Young Users Drive Growth" cited research by Deloitte which found that training millennials (ages 14 to 24) had the highest combined share of smartphone and tablet video time at 16 percent. They were also the only group with a majority of time spent viewing on screens other than TV, which in Deloitte's survey included desktop/laptop systems, smartphones, gaming devices and tablets.
This comes as no surprise to O'Neill.
"Millennials are mobile. They are the future of this industry," he said. "North American mobile data traffic alone is expected to grow by five times by 2020."
Overall, Ooyala's report found that 30 percent of all video played in the third quarter was done on a smartphone or tablet.
"We expect that to pop up to 50 percent by next year," he said. "In the third quarter a year ago, it was just 14 percent."
EMarketer Senior Analyst Paul Verna said that unsurprisingly, older users tend to gravitate toward more traditional screens, like TVs.
"Generally speaking you're going to see more millenials watching smartphone and tablet videos and short form content in general," he said. "The comfort level that younger users have with accessing media on the go on smartphones and tablets is not entirely clear cut, though. Older users are coming around as well."
Publishers and program creators are paying attention to mobile video's growing popularity.
"Very few people do one type of viewing," Verna said. "And the amount of original content is going way up."
Popular Web-Based Content
Original Web-based shows like Netflix's House of Cards are gaining in popularity. Professional gamers are creating videos on YouTube while everyday folks are creating shorter, funny video clips and posting on humor sites.
"There's a lot of creating of original content that has no other home but the Web," Verna said. "Clips that get a lot of views get shared a lot, and sharing is a big part of what drives the whole content world."
Also, more sports events and news are being accessed live via mobile, he added.
"So much of our media consumption has shifted to mobile. Companies like Facebook and Pandora – three years ago they saw a certain percentage of usage on mobile and now today it's some big multiple of that," Verna said. "Video is a big part of that."
Mobile video advertising is another huge component of the industry's growth. In early September 2014, VentureBeat reported that U.S. advertising firms and marketers will spend about $1.5 billion on mobile video ads by the end of 2014, more than double the $722 million spent in 2013. eMarketer principal analyst David Hallerman told VentureBeat that mobile video ads accounted for nearly 19 percent of all digital video ad spending in 2013. He predicted that figure would climb to nearly 26 percent by the end of this year and quadruple to more than $6 billion by 2018 for "huge growth."
Looking ahead, mobile video is expected to become practically ubiquitous.
"Just about every company that has an app and is trying to reach its user base through mobile realizes that video is going to be part of that," Verna said. "It's what a lot of content developers and marketers are focused on with regard to mobile."
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