Mo­bile Video: There’s Money, Honey

Tel­cos and OTTs are both woo­ing cus­tomers with mo­bile videos. Who kisses first is the ques­tion.

PCQuest - - CONTENTS - Au­thored by: John Giere, Pres­i­dent and CEO, Open­wave Mo­bil­ity

Whether it’s binge­ing on stranger things, cute pets or epic fails - peo­ple just can’t get enough of video on their mo­biles. By ev­ery met­ric we’ve seen, which in­cludes live op­er­a­tor us­age data, mo­bile video is the killer app. Peo­ple aren’t just check­ing out video clips to fill a few spare min­utes here and there. Mar­ket­ing pro­fes­sion­als will tell you that there is se­ri­ous ROI as­so­ci­ated with telling their mes­sages with video - 60 per cent of them agree that if peo­ple can choose be­tween text and video for the same mes­sage, they choose video.

HD ev­ery­where

It is not just short-form video that is trans­form­ing the way we use our mo­biles. As mo­bile de­vices get more

so­phis­ti­cated and mo­bile speeds get faster, for the Net­flix gen­er­a­tion, mo­bile phones are in­creas­ingly an HD ex­ten­sion of the view­ing ex­pe­ri­ence they’re used to at home. Thanks to faster net­works and higher qual­ity screens, they can binge watch the lat­est block­buster se­ries…al­most any­where, it seems. So much so that nearly 40 per cent of mo­bile video traf­fic is now HD. This find­ing is from Open­wave Mo­bil­ity’s Mo­bile Video In­dex re­search of live data from more than 30 op­er­a­tors around the globe from 2013 to 2017. The growth in HD traf­fic has far ex­ceeded op­er­a­tor pre­dic­tions.

The mo­bile video mega-trend is leav­ing op­er­a­tors be­tween a rock and a hard place.

The cus­tomer is al­ways right, right?

Firstly, this trend is com­ing from the sub­scriber. They – we – can’t get enough of video! It re­flects the pop­u­lar­ity of watch­ing OTT stream­ing video ser­vices like YouTube or Net­flix. To­day over 820 mil­lion peo­ple across the world watch YouTube and Net­flix on mo­bile de­vices. This trend re­flects the pop­u­lar­ity of plat­forms like Twit­ter, Face­book and Snapchat who use video to max­i­mum ef­fect. And, the num­ber one rule of busi­ness is to give the cus­tomer what they want. Video it is.

Buffer­ing is bad busi­ness

An­other rule: don’t make the cus­tomer wait! The con­se­quences of buffer­ing are dire. If subscribers en­counter buffer­ing or poor qual­ity video, they turn off. Our re­search found that all it takes is six sec­onds of buffer­ing. And what’s more, poor QoE when it comes to mo­bile videos is their num­ber one frus­tra­tion. Whereas just a few years ago, dropped calls were subscribers’ pet peeve. Videos that don’t load or buf­fer re­ally frus­trate subscribers. Poor QoE leads to churn, ev­ery mo­bile op­er­a­tor’s worst night­mare.

Work­ing in the dark

The ob­vi­ous thing to ad­dress the chal­lenge of QoE would be to man­age traf­fic flow in such a way as to op­ti­mize video, and of course, that is what op­er­a­tors are try­ing hard to do. The prob­lem comes from the next ma­jor find­ing in our Mo­bile Video In­dex report. Three quar­ters of all mo­bile traf­fic is now en­crypted. En­cryp­tion pro­to­cols pre­vent op­er­a­tors from be­ing able to pro­file or op­ti­mize data with con­ven­tional traf­fic man­age­ment tools. Thanks to UDP-based en­cryp­tion, Google’s QUIC and Face­book’s 0-RTT, Open­wave Mo­bil­ity pre­dicts that by Novem­ber 2018, ap­prox­i­mately 90 per­cent of mo­bile in­ter­net traf­fic will be en­crypted.

Put sim­ply, how can op­er­a­tors man­age what they can’t see?

If video is the killer app, who’s the win­ner?

It’s no se­cret that OTT play­ers have eaten into op­er­a­tor rev­enues. In 3 years OTTs wiped out voice rev­enues. In 2.5 years they wiped out messaging rev­enues. Is mo­bile data next? You bet.

The chal­lenge mo­bile op­er­a­tors are left with is two-fold. One, they must find a way to re­claim their subscribers, to “mon­e­tize” them once again. Two, as in­creas­ing en­cryp­tion ob­scures their view of their own net­works, mo­bile op­er­a­tors need to re­think how they can de­liver HD- qual­ity (and beyond) to subscribers.

As they say, change is the only con­stant, and HD is just to­day’s chal­lenge. Look­ing ahead for what is in store for op­er­a­tors, Dim­itris Mavrakis, re­search di­rec­tor at ABI Re­search, com­mented, “If AR/VR, 3600 video, tac­tile in­ter­net ap­pli­ca­tions and new use cases achieve com­mer­cial suc­cess and come to the mass mar­ket in the next few years - cur­rent us­age es­ti­mates will be blown out of the wa­ter.”

JOHN GIERE, Pres­i­dent & CEO, Open­wave Mo­bil­ity

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