Light Reading

Mobile Video's Time Is Now

Kaps Korner
Kaps Korner
Kaps Korner
1/12/2012
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10:30 AM -- LAS VEGAS -- 2012 International CES -- Write it down, bookmark it, do whatever you need to draw a line in the virtual sand: 2012 will be the year that mobile video emerges as a major force moving producers, service providers and the world's biggest business brands delivering viewable content.

Anywhere you looked at CES this year there was proof that mobile video was not just the next big thing, but the big thing that was happening now. From cellular providers angling to get consumers using high-speed data on as many devices as possible to back-end gear suppliers looking to ease the distribution channels, to content providers looking for Web-based outlets, mobile video was a main topic of interest. And the good news is, it should mean a bigger economic pie with pieces for everyone, up and down the entire mobile-video food chain.

To be sure, there are still headaches and barriers to consumption that must be eliminated -- like ESPN's weird gymnastics of cable-service authentication necessary to watch games on mobile devices. And there are still some exclusive rights, like Verizon's exclusive NFL contract for mobile, that inhibit widespread adoption by tying mobile consumption to a single provider or platform. But that's normal for early-days adoption. When cable started out, it offered mostly reruns and the big question was whether it would attract advertisers. Now look at cable. All growed up and has eaten broadcast's breakfast, lunch and dinner. Web video will follow a similar path, perhaps more complementary than destructive. But it's not a future idea. It's here. Now.

For cellular carriers like AT&T and Verizon Wireless, mobile video is the answer when the question is "why do I need a 4G link in my phone or tablet?" At AT&T's developer summit here on Monday there was the usual announcement of an assortment of new smartphones -- but what really stood out were some video-dedicated devices, like gaming-centric platforms from Sony and the Samsung Note, a phone/tablet hybrid whose 5-inch fat-boy screen is clearly not there just to make text messages look better. (See AT&T Promises Superfast 'Blended 4G'.)

Intel's Inside Track
You couldn't miss the message about mobile video at Intel CEO Paul Otellini's keynote speech Tuesday afternoon. Otellini harped frequently on video capabilities of the company's "reference designs" for phones, tablets and the new lean ultrabook laptops, with one of the latter's cool features being an origami-like folding trick that lets you turn the thin PC into a tablet perfectly angled for video viewing -- "even if the guy in front of you puts his seat back," Otellini said.

Light Reading regulars of course know all about the gymnastics necessary on the back end to make that video stream available to all kinds of devices, and Cisco was here talking about the latest tweaks to its Videoscape system, designed to make life easier for the service provider. But perhaps what was most telling was the talk and attitude being shown by the entities who control the content -- mainly the big media companies -- who now seem to be falling over themselves trying to find ways to get over-the-top video over the market-acceptance hump. (See Cisco's Videoscape Stresses Cloud Control.)

"If Web video was touted in 2010 and came to fruition in 2011, in 2012 it's now part of the plan," said Scot McLernon, chief revenue officer for YuMe, which provides ad-serving tools for mobile video outlets. According to McLernon and other participants on a mobile-video panel Tuesday, it's no longer a question of if or when advertising will come to mobile video. Now it's simply a question of how much.

"If you name an area [of business] or name a major advertiser, they're probably already doing something with us or with Hulu or with others," McLernon said. "They just have to decide how much it makes sense for them to spend."

The big sticking point in the past -- whether or not entities like major motion picture houses were willing to put their top content out online -- is also quickly becoming moot, as working models like Hulu, YuMe and others sign up customers with real money to spend. The extra income also makes worries like security and concerns about piracy recede in importance, as (like Apple did with iTunes) enough people pay for content to keep the creators happy.

"The more money I bring to the table, the less worries I hear about from Paramount about security," said Emil Rensing, chief digital officer at Epix, the "next-generation multiplatform premium entertainment channel, video-on-demand, and online service" whose EpixHD service brings top-end movies from Paramount, Lionsgate and MGM to the Internet and mobile devices. "When they start worrying about those things I say, 'did you see the check I brought in? I think we're good, guys.'"

And it's not just the big companies who are making a few more bucks off their blockbuster movies so you can watch it on an iPad in the tub. Web-only players, both small and large, are finding paying audiences for their work, either through syndicators like YuMe or just tapping their own audiences, like the recently famous $5 video that netted comedian Louis CK a profit in the six figures.

"There's an incredible amount of opportunity [for content creators] at all kinds of price points," said David Gale, executive vice president at MTV's MTVX division. "The Louis CK thing rang a big bell. It shows that creative people can continue to push the envelope."

"I don't know what content creators need to get paid, but we're writing some pretty substantial checks," said YuMe's McLernon, who said the company has more than 600 providers who use its service. "That's a lot more outlets for consumers to find that content," he said.

— Paul Kapustka, who knows content when he sees it, is editor in chief of Mobile Sports Report. Special to Light Reading.

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kelliott14
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kelliott14,
User Rank: Light Beer
12/5/2012 | 5:45:37 PM
re: Mobile Video's Time Is Now


Great insight Paul and completely agree. According to media analysts Nielsen, 30 million people watched video on their mobile phones in 2011. As numbers like this only grow, how will service providers cope with the increase in demand & the strain this places on their networks? Video viewership is largely responsible for congestion. When I'm watching mobile video, I expect a certain level of quality. How important will it be for providers to understand their networks & allow for a better user experience? Thanks.

kaps
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kaps,
User Rank: Light Beer
12/5/2012 | 5:45:27 PM
re: Mobile Video's Time Is Now


@kelliott14, I think it's safe to say that video transport is the no. 1 concern of every mobile provider out there right now. Verizon is doing a bunch of gymnastics after finding out in 2011 that different devices behave differently on the client side, so they are busy "optimizing" video for each handset... a messy problem that you are bound to hear more about.


My guess is that you will start to see some of this become an asset -- as in higher prices for better guaranteed delivery of video. It's going to cause some net neutrality headaches but basically there is no way around this, as people ask for more video the networks are going to get overloaded so price differentiation is the only way out.


I would say that all the big carriers basically "get it" about the need to optimize for video. Now will they actually perform under stress? That's something for LR Mobile to keep a close eye on.

kaps
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kaps,
User Rank: Light Beer
12/5/2012 | 5:45:27 PM
re: Mobile Video's Time Is Now


@kelliott14, I think it's safe to say that video transport is the no. 1 concern of every mobile provider out there right now. Verizon is doing a bunch of gymnastics after finding out in 2011 that different devices behave differently on the client side, so they are busy "optimizing" video for each handset... a messy problem that you are bound to hear more about.


My guess is that you will start to see some of this become an asset -- as in higher prices for better guaranteed delivery of video. It's going to cause some net neutrality headaches but basically there is no way around this, as people ask for more video the networks are going to get overloaded so price differentiation is the only way out.


I would say that all the big carriers basically "get it" about the need to optimize for video. Now will they actually perform under stress? That's something for LR Mobile to keep a close eye on.

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