Weekly Update

Preparing for TV’s mobile-first future

Mobile first” has been a watchword for both online publishers and developers for several years now. As mobile devices increasingly become users’ primary means for accessing the internet, developers have been forced to conceive and design the core user experience for their apps and services around the smaller screen real estate, lower processing power and slower connection speeds available on mobile device compared with a desktop and a fixed broadband connection.

While mobile-first makes sense as a design principle the monetization tools available to web publishers have not caught up with the trend. Small screens leave less space for display ads, click-through rates on lower on mobile than on desktop, accurate measurement remains elusive and the high commissions charged by app store providers on in-app ad and subscription sales undercut margins.  Publishers can also lose access to valuable user data when the point of access shifts from a desktop browser to a mobile app.

Based on a series of recent reports on online video usage, television networks could also soon be facing the same sort of difficult transition to a mobile-first digital world as other content publishers.

According to Adobe’s latest U.S. Digital Video Benchmark report, mobile devices accounted for 29 percent of all online video starts in the third quarter, a market share increase of 45 percent over the same period in 2013. Mobile starts were split almost exactly evenly between tablets and smartphones (14.3 percent and 14.2 percent, respectively).

That finding dovetailed with Ooyala’s third-quarter Global Video Index report, which found that mobile devices accounted for 30 percent of all video plays in the quarter, a 20 percent market share gain over last year. Year-over-year, smartphone and tablet views more than doubled, increasing 114 percent. Ooyala now forecasts that mobile devices will account for fully half of all video viewing by the end of 2015, a full year ahead of its previous forecast.

What people were watching on their mobile devices was also surprising. Ooyala reported distinct spikes in mobile video viewing in the U.S. in July and August, coinciding with the FIFA World Cup (July) and the U.S. PGA Championship and U.S. Open Tennis tournament (August), reflecting the growing impact that live sports streaming is having on mobile video viewing. Similar spikes occurred in France around the Tour de France and in the U.K. during Wimbledon and the British Open. A recent study by Sports News Media and Kantar Media found that 42 percent of U.S. consumers say they use their mobile devices to watch sports, with more saying they watch primarily on their smartphones (34 percent) compared to 22 percent who say they watch on tablets.

Clearly, mobile devices are being used for than video “snacking.” Long-form on-demand content, much of it TV programming, is also growing as a share of mobile viewing. According to Ooyala, tablet viewers spent over 68 percent of their video viewing time watching content longer than 10 minutes, and 15 percent watching content longer than an hour. Smartphone users spent nearly half their video viewing time watching long-form content. As other types of publishers have before them, the TV industry’s digital strategy increasingly will need to incorporate the mobile-first principle.

It won’t be easy. Speaking at the Sports Video Group Summit in New York last week, Matthew Panto, assistant executive director of the Ivy League’s digital network, noted the difficulty of producing live sports broadcasts for mobile devices. “What do you do with something like graphic overlays that show scores, or statistics?” he said. “On a small screen they’re too small to read. So do you strip them out for your digital feed?”

Monetization is also problematic. Like stat boxes and scores, ad overlays, common in broadcasts of soccer games and other sports without commercial time-outs, are also too small to read, noted One World Sports president/CEO Sandy Brown. Both Brown and Panto said sports broadcasters will increasingly need to produce two parallel streams: one for big-screen TVs, and one for digital platforms with a mobile-first design.

The good news video publishers is that video ad views on mobile devices are growing rapidly. According to FreeWheel’s third-quarter Video Monetization Report, mobile video ad views were up 77 percent over 2013 and now account for 14 percent of all video ad views. The bad news is that video ads in mobile apps are viewed far less frequently than ads in desktop browsers. According to Adobe, browsers yield 24 percent more ad views per video start than mobile apps.

Either way, the growth of the mobile web is not likely to abate. As with other types of content, over-the-top video providers will need to learn to think mobile first.