Mobile video's simple math: quality video equals higher ad spending

Streaming video on mobile devices has a bright future, with viewers spending an increasing amount of time watching content on their smartphones and advertising revenue expected to reach $25 billion in five years, according to Strategy Analytics. But getting eyeballs onto ads may be problematic if high-quality video isn't part of the picture.

The popularity of mobile video is a good thing for providers like Verizon and its fledgling Go90 streaming service. "The strongest growth in mobile video revenue will come from advertising-funded content as advertisers look to catch up with the increasing quantity of video consumption," said Wei Shi, analyst, Wireless Media Strategies, for Strategy Analytics. "Advertising spending on mobile video will grow at a 28 percent CAGR in the next five years."

A new IBM Cloud Video study found that about 15 percent of the 1,000 viewers it surveyed in April watch video on their smartphones. Of those surveyed, 49 percent said the biggest challenge to watching content on their smartphone or tablet was the small screen.

Naturally, the smaller the screen, the less compelling the video experience -- hence the enduring popularity of the large-screen TV in U.S. living rooms. But being able to view the same content on any screen they access is also important to consumers, many of whom are spending more time viewing on mobile devices.

A recent VDMS survey found that viewers overwhelmingly want a high-quality video experience on every screen they use, including mobile. Further, VDMS platform analytics found that nearly half of all mobile video viewing sessions last 31 minutes or longer, offsetting the notion that short-form video is a more popular format for mobile devices. Android devices clock slightly longer viewing times than iOS: 63 minutes per session versus 62 minutes, respectively. That longer engagement comes with a big caveat, however: if a mobile video's quality is poor, viewership tanks as much as 78 percent.

Verizon's study noted that the quality problem is already evident to most viewers. "Nearly one third of viewers abandon viewing at least every other time they watch on a mobile device," the report said. Further, it predicted that fixing streaming quality problems could result in 25 percent more ad revenue for AVOD providers, regardless of the device their content is being viewed on.

For more:
- see this Strategy Analytics release
- see this VDMS study
- see this IBM Cloud report

Related articles:
Verizon's Go90 rolls out new features to attract more users
AOL's Ackerman outlines the new crossroads between digital video, television
HBO NOW outage proves OTT industry needs to look QoE problems in the teeth

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