By Vuclip , CEO & Co-Founder, Nickhil Jakatar
Headquartered in Milpitas, CA, Vuclip is an independent mobile video and media company that serves video on-the-fly, on any device. Founded in 2008, the company has raised $27 million from Jafco Ventures, NEA and SingTel Innov8.
We all know that everything is going mobile. Mobile video is quickly becoming a mass consumer phenomenon and is going to continue to grow in popularity in the near future. A Cisco report released early in this year predicts that mobile video will generate 66 percent of mobile data traffic by 2015. Mobile video demand and thereby data usage is skyrocketing worldwide driven by four major factors: proliferation of low cost smartphones, the surge in mobile web access and bandwidth improvement, virality of mobile videos, and compelling content.
Proliferation of Low Cost Smartphones
The conventional wisdom in regards to mobile video is that someday in the near future the entire global mobile market will rise up to the consumer elite and everyone will have a high-end smartphone and 4G speeds will become global standard.
We think that the economic realities point to something fundamentally different; the continued solidification of a two-tiered mobile world. One, where there is a high-end goods market for a minority who can afford the top tier hardware and data plans, and then a mass market for the vast majority who cannot afford them. And the research supports our philosophy. According to a recent study by Ericsson, around 40 percent of all phones sold in the third quarter of this year were smartphones. Also, in October of this year, a global research firm, NPD Group forecasted that by 2016, low-cost Android handsets alone could account for up to one-third of global smartphone shipments. More mobile devices mean more mobile video consumers, and more mobile video consumption.
Surge in mobile web access and bandwidth improvement
Across the globe, the number of mobile phone users is higher than that of wired Internet users – and it is likely to stay that way permanently. Per Kleiner Perkins Caufield Byers (KPCB), global mobile traffic now accounts for 10 percent of total internet traffic. Internet in the developing world is arriving on phones before even traditional computers and in developed countries such as the U.S., wireless connections have replaced and will continue to replace wired access. About 70 percent of Internet users in Egypt, 59 percent in India, 57 percent in South Africa, 50 percent in Ghana and 44 percent in Indonesia get online only via mobile phones. 3G/4G connections are emerging as a powerful catalyst of mobile video growth. According to Gartner, the worldwide share of mobile video connections on 3G/4G will increase from 18 percent in 2011 to 43 percent in 2015.
In more established markets including North America and Western Europe, the percentage of 3G/4G connections is expected to be as high as 80 percent and 96 percent respectively. With bandwidth becoming cheaper and accessible by the day and increasing availability of public Wi-Fi hotspots, there will be a further uptake of video on mobile.
Virality of mobile videos
We are seeing that with mobile video, social sharing is the new search. What better way to discover content that is interesting than by recommendation from your trusted social network? It is not unusual for mobile video views to be driven by social sharing on Facebook, Twitter and BBM by up to 65 percent. The excitement of individuals to share mobile videos of their vacations, parties, weddings, friends, and family raises the potential for viral success.
The power of social video represents an evolution in digital marketing arena. Gradually, even the marketers are moving from 20-30 second pre-roll ads on mobiles towards adopting a broader strategy that includes longer opt-in videos with built-in sharing capabilities as they realize that video content has the potential to go viral and drive further traffic when it is shared socially.
The Role of Compelling Content
Another key to growth in mobile video is to provide compelling personalized content that consumers from all walks of life can engage with. This means content that reaches the hearts and minds of viewers. Mobile video tends to lend itself to "snacking," meaning that viewers watch short form clips, rather than full feature films and they fit in a fair amount of viewing throughout the day. The desire for entertainment on the move will continue to shape demand for video content.
Mobile video consumption is undergoing a shift in dynamics as consumers look for a more personal and interactive video viewing experience. Here lies a tremendous opportunity for marketers to harness the combined impact of wide reach of mobile video and the power of mobile advertising to hyper target consumers with rich, engaging campaigns. Today, mobile video advertising is an increasingly vital and compelling aspect of many brands' mobile campaigns. According to recent reports from both eMarketer and Gartner, mobile video ads are poised for the fastest growth of all the mobile ad platforms in the U.S. through 2015.
In fact, mobile video ads will generate more revenue in 2015 than banners and rich media generated in 2011, according to eMarketer.
The increasing popularity of smartphones and tablets; improved bandwidth and availability of affordable data plans and consumers’ growing appetite for compelling content, indicates that there is continued strong momentum for mobile video uptake across the globe and we believe this is going to make mobile video a global mass media revolution.