Streaming Media to Mobile Audiences

Growth Expectations and Early Deployments
No matter how you count it, streaming to mobile phones is big business. Ovum senior analyst Dario Betti predicts that video messaging will generate $650 million in worldwide service revenues in 2005. But Betti adds, "Mobile video will really take-off in 2007 and 2008. By then one in four users will be sending video messages." By 2007, this could be one in four of over a billion subscribers of next-generation mobile services worldwide. Using its model, Strategy Analytics estimates that by 2008, over 150 million users worldwide will be wirelessly accessing video clips (including sports, movies, and adult entertainment), generating revenues of just under $4.7 billion.

Shawn Ambwani, executive vice president of marketing and business development for Nextreaming, a provider of MPEG-4 solutions to the mobile streaming media market, summarizes the opportunity on behalf of many vendors investing in this market. "Video is going to be a natural part of the mobile space as it evolves from voice, to multimedia messaging including still photography, to video messaging, to videoconferencing."

Service providers are also counting on growth of mobile streaming video and video messaging services. According to Mauro Sentinelli, managing director of Telecom Italia Mobile, active data users generate four to five times more revenues for the service provider than a voice-only subscriber. MMS subscribers are spending about 8 times more than a voice-only subscriber. With MMS still being predominantly photos and sound clips, it’s easy to imagine how video messages will drive MMS revenues even higher. Some of the prominent mobile operators that have deployed streaming media services include AT&T Wireless, O2 in the U.K., Optimus in Portugal, Hutchison 3G in Austria and the U.K., WIND in Italy, Orange in Switzerland, Telstra in Australia, Vodafone in the U.K., Germany and Australia, and MobileOne of Singapore among others.

Challenges
Initially mobile video was an attractive way for mobile operators to recoup their investments in 2.5G infrastructure. With the exception of a few operators such as Hutchison 3G, who have already deployed mobile video over UTMS networks, most of the mobile service providers offering video have launched their services using underutilized 2.5G networks. But the utilization of the data capabilities of 2.5G networks is growing fast from Internet access, MMS photos, downloads of ringtones, icons, and other mobile multimedia treats. As 2.5G networks start to get heavily used, the Quality of Experience (QoE) for mobile video will degrade unless operators respond with more investment. Upgrading networks to 2.75G (e.g. GSM-EDGE) technology will help by doubling (or, in some cases, tripling) the available bandwidth per user. However, many argue that 2.75G hardly begins to address the real challenges facing mobile video as its adoption grows.

For mobile video to reach its potential, operators will need to maintain the quality of user experience as subscriber numbers rise. Subscriber satisfaction with video and audio quality depends on reasonably steady flows of sizable chunks of data to the user’s handset. Degradation of experience due to delays introduced by the mobile network congestion and bandwidth fluctuations need to be avoided. Artifacts and stream interruptions during play back are unacceptable. Further, in the case of video messaging, when downloading or uploading a clip takes 2x, 5x, or 10x longer than the length of the experience, subscribers get impatient.