What is the Next Must-Have Content?
By: Tim Young
The latest update of Cisco’s Visual Networking Index (VNI) Global Mobile Data Traffic Forecast came out a few weeks ago, and it once again underscored the broader trends that we’ve seen in the VNI and other market analyses for years: people love consuming content, especially video. Global mobile traffic increased by 69% in 2014, reaching 2.5 exabytes per month. Mobile traffic alone was 30 times the size of the entire Internet in 2000, and video was a big part of that. Mobile video traffic represented 55% of all mobile data traffic, an increase from 2012, when video first claimed more than half of all mobile traffic.
This fits, of course, with larger data trends identified by the VNI in the past. Worldwide, IP video is predicted to represent 79% of all IP traffic by 2018, up from 66% in 2013. Total Internet video traffic (business and consumer, combined) will represent 75% of all Internet traffic in 2018, an increase from 57% in 2013.
So yeah. Video is a big deal. But you know that.
The issue is made trickier, of course, by the changing nature of video content, in terms of origin, quality, and interactivity. What are some of the ways these changes will play out, and how will that affect operators? Moreover, what other content trends are growing, looking to join video as a major source of data traffic? And, of course, who will ultimately be able to grab their share of the many dollars flying around in the world of content?
About Ericsson
Ericsson’s TV & Media solutions help content owners and operators to maximize content and consumer value with unique, blended multi-platform, multi-screen TV. Enabling compelling consumer experiences on all devices, our offering spans the media value chain of content acquisition, creation, management, exchange and delivery to consumers. http://www.ericsson.com/tv-media/
The Financial Angle
First of all, a word about revenue: It is a common presumption that many users, Millennials in particular, won’t pay for content. However, a recent study by Deloitte’s Technology, Media, and Telecommunications industry practice suggests that the “generation that won’t spend” is spending an awful lot on content. The firm predicts that 18-34-year-olds will spend more than $62 billion on content in 2015. That equates to $750 for every consumer in that age bracket.
Pay TV is, by far, the largest piece of that pie, and the average millennial will spend $316 for it this year. They’ll spend $125 on music, $100 on computer games, $75 on trips to the movies, $60 on books, $40 on streaming video services like Netflix, $25 on live sporting events and $19 on newspapers.
Looking across those numbers, you see a couple of centuries’ worth of industries on their way up and down, each competing for their share of the pie. Moreover, this number is smaller than it may have been for some previous generations, but it doesn’t take into account the other associated costs of content consumption, many of which also directly benefit communications service providers.
This demographic is likely to need or want a smart phone with a big data plan and a wireline data connection with speedy service and a large (or no) cap. They typically replace their PC and tablet every four years and their game console every five years. All told, they spend an average of $3,000 per year on hardware and connectivity, a big chunk of which goes to their service provider.
