June 19, 2013

Growing Tablet, Mobile Video Consumption Will Eventually Lead ISPs to Reallocate Bandwidth


The share of tablet and mobile video grew 19 percent in the first quarter of 2013, according to Ooyala.

Mobile and tablet video now account for more than 10 percent of all online video plays, the most ever recorded in the Ooyala Global Video Index.

Globally, desktop viewers watched live news, sports and special events for an average of 40 minutes per play in the first quarter of 2013.

On average, people streamed live video on smart TVs and gaming consoles for 45 minutes per play, about nine times longer than video on demand content.

Desktop viewers watched live video 13 times longer than VOD in the studied quarter, while tablet video viewers watched live video four times longer than VOD, and mobile audiences tuned in to live video three times longer than they did video on demand.

Both mobile and tablet video viewers spent more than half of their total online viewing time watching long-form videos, and 25 percent of total tablet viewing time was spent with content more than 60 minutes long, Ooyala says.

All of that has implications in other parts of the communications business.

As linear TV is viewed less, and as the number of subscribers dips, there will be new questions about the highest and best use of access bandwidth.

Today, for example, access providers have to decide how much capacity to allocate for linear TV services, and how much to allocate for Internet access, which in some ways is a proxy for streaming video.

If Internet access demands continue to increase, and pressure on linear TV revenue continues, access providers will start to look at whether it makes sense to carry less linear TV and allocate bandwidth for Internet access.

That is a revenue generation exercise: how much revenue and margin do we make selling Internet access, compared to TV services, and what changes if we allocate more bandwidth for Internet access?

Cable TV providers have grappled with this issue before. Though there was in the past some capital investment advantage to delivering linear TV in analog format, cable operators began shifting to digital delivery, even with the higher customer premises equipment costs.

The countervailing advantage was bandwidth reclamation. By freeing up bandwidth, cable operators were able to make bandwidth available for Internet access services.

That logic will continue to prevail if demand for linear services dips and demands for Internet bandwidth continue to increase.

At some point, that same business driver will cause providers of linear video services to rethink how many networks they really do need to carry.




Edited by Alisen Downey



Related Tags

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