By: Becky Bracken
Cisco has forecast that the sum of all video (TV, video on demand, Internet, and P2P) will exceed 91 percent of global consumer traffic by 2014. In 2009, the Pew Research Center found that 62 percent of Americans had watched video on sites like YouTube or Hulu. According to Analysys Mason, differentiated mobile broadband -- including video--will provide an estimated overall revenue boost of 17 percent by 2015. This will be driven by a 29 percent increase in average revenue per user (ARPU).
Streaming Video as a Value Proposition To Customers
Charter Communications and Time Warner Cable are considered to be the leading candidates to start charging for the amount of data used. Many multiple system operators (MSOs) have seen their profits and customer base slashed with the popularity of sites such as Netflix. A recent study from Sandvine Intelligent Broadband Networks last month found that Netflix accounts for 32.7 percent of peak U.S. internet traffic between the hours of 6 p.m. and 10 p.m., the single biggest bandwidth hog in the U.S.
Netflix's history as an over-the-top (OTT) player, bandwidth hog, and failed original content distributor make it a good example of the shaky relationship between content creators, networks operators, and service providers. Netflix's own content arm, Red Envelope Entertainment, was killed once it was clear it was positioning itself in direct competition with the Hollywood studios it needed for competitive content. The plan for Red Envelope was to offer deals to every independent film at Sundance and own huge swaths of movie real estate. Bad idea. By 2008, Red Envelope Entertainment faded to black.
Video Your Customers Are Dying For, But Don't Know It Yet
For network operators and service providers alike, the best way to get into the video-as-a-service-differentiation game--and win--is to partner with marquis content brands with deep archives just waiting to start generating income.
Most parents probably never imagined â€śSesame Streetâ€ť would become a daily must. Now it's available anywhere on a smart phone, tablet or TV. T-Mobile TV just announced a few partnerships with slam-dunk kids programming producers that are a hit with subscribers. Playground TV Kidsâ€™ programming represents 26 percent of viewership on T-Mobile TV, making it more popular than news and sports combined. For less than six bucks a month, T-Mobile TV provides a large breadth of entertainment for parents of kids up to 6 years old. The package includes live channels and on-demand episodes of popular programs, including â€śPocoyo," â€śCurious George," â€śGo Diego Go," â€śDora the Explorer," â€śCat in the Hat," â€śVeggie Tales," â€śBaby First TV," and â€śSesame Street.â€ť
â€śSesame Streetâ€ť is a great example of a legacy broadcast brand with a deep archive of quality content looking for opportunities to get in on mobile distribution. And since the content is already in the can, the revenues are nothing but gravy.