Mobile video beginning to take hold among Canadian users

Mobile video content has gained a toehold in the Canadian wireless user market and the industry is bullish on its future, according to industry specialists at a conference in Toronto last month. While its still early days for mobile video in Canada, speakers at the Canadian Wireless Telecommunications Association’s All About ME (Mobile Entertainment) conference held in Toronto on February 21 said the interest and numbers are already starting to appear. "Do we have millions of people downloading?" CHUM Television senior VP Roma Khanna asked during her keynote, referring to mobile TV. "Absolutely not," she responded, "but we do have thousands and thousands of people downloading content." Upinder Saini, VP new product launch and content with Rogers Communications Inc. – the first Canadian wireless operator to launch mobile video services – noted during another session that mobile TV has already gained some traction. Some of the company’s channels are experiencing upwards of 25-30 minutes of viewing per month, he said. Figures from QuickPlay Media, a mobile content provider, demonstrate that mobile video is no fluke. Mark Farmer, director of marketing for the Toronto-based company, noted during his presentation that the run rate for mobile video downloads topped the 100,000 mark on a per-month basis as of January 2006 (see chart below for cumulative mobile video downloads). But what types of content are driving mobile video usage? Farmer noted that approximately 90% of the downloads fall into the "sports, babes and music" category, which dispells the notion that timely, personalized and personally relevant information would drive content downloads. The latter represented less than 10% of downloads as of the fourth quarter 2005, he added. There is, however, a shift taking place with respect to downloaded content, and Farmer attributes this to the availability of streaming video and the bundling of video services into subscription packages. "It’s not 90-10 anymore. Some of the stuff that is down at the bottom 10% is shifting and quite dramatically," he said, adding that "Things like weather" are getting more attention from users. "As soon as you include it in a channel lineup of video where people are paying $5, $6, $8, $9 per month, people watch the weather every single day," he said. Farmer said the growth curve for mobile video began to move northward in the August-September 2005 time frame when the higher-speed mobile networks became more broadly available across the country. "I still think this is just the beginning of the curve," he said, pointing to the growing number of Canadians using cell phones. Canada has approximately 17 million cell phone users, giving the country a wireless penetration just above the 50% mark and this is continuing to grow. Farmer also noted that existing users usually replace their handsets every 18 to 24 months, and this will drive increased penetration of video-enabled devices in the market. With the youth market making up a large percentage of new wireless users in Canada, the opportunity for mobile video services looks bright. Market for on-demand content to soar by 2010: Parks AssociatesAmericans’ appetites for on-demand digital content will grow more than two-and-a-half times by 2010, according to a recent study from Dallas-based Parks Associates. "Thanks to broadband proliferation and growing cooperation between content producers and other members of the digital entertainment value chain, we’ll see significant product and service announcements throughout 2006," said Parks Associates VP and principal analyst Kurt Scherf, outlining the key drivers of the trend. The firm expects worldwide broadband consumer connections to nearly double over the next five years, from 184 million in 2005 to 360 million by 2010. In 2010 alone, the research firm anticipates US consumers will buy US$9 billion worth of on-demand content, including games, music and video – a vast increase on the US$2.4 billion predicted by the end of this year. Online gaming is expected to make up the bulk of the revenues in nearly every year, but audio and video content will increasingly gain as 2010 approaches, and combined will account for half of that US$9 million estimate. Hardware manufacturers in both the computing and consumer electronics segments will vie for consumers’ attention as they bring new network-friendly home entertainment platforms to market. On the services side, the race has already begun: Scherf pointed to such early adopters of online content retailing as Apple Computer Inc.’s iTunes music download service and online movie rental service Movielink of Santa Monica CA. Also fuelling the growth in on-demand entertainment are IPTV services, such as the ones currently being rolled out by SBC Communications in the United States. Worldwide, the Parks Associates report estimates that subscriber figures for IPTV services will grow by 1,300%, from five million last year to 70 million by 2010.

Mobile video beginning to take hold among Canadian users

Broadcast | March 7, 2006

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