Reader Forum: Giving subscribers a choice – the key to mobile video monetization

Editor’s Note: Welcome to our weekly Reader Forum section. In an attempt to broaden our interaction with our readers we have created this forum for those with something meaningful to say to the wireless industry. We want to keep this as open as possible, but we maintain some editorial control to keep it free of commercials or attacks. Please send along submissions for this section to our editors at: dmeyer@rcrwireless.com.
Managed mobile video has been tried before (Verizon Vcast, anyone?) without much consumer interest. Perhaps it was the bandwidth constraints that limited the type of content to a few-second clips instead of a full episode, or the quality and playback experience causing massive buffering times before and during video playback. The point is that the world today is definitely a more mature era for watching videos on mobile screens – and on mobile networks.
Today’s service providers are in the perfect position to monetize mobile video. For example, Comcast is able to offer download speeds of up to 105 megabits per second, complete episodes of popular shows and full movies are available for viewing, and with solutions available to help operators optimize mobile video delivery and consumption, buffering and stuttering are drawbacks of the past.
Operators have countless solutions to optimize the way mobile video content is delivered from both network resource consumption and subscriber’s quality of experience angle. Optimization techniques include mechanisms to dynamically re-encode video content to adapt its bitrate to the viewer’s available bandwidth, managed delivery of ABR video, pacing and caching, amongst others – but it doesn’t make sense for them to invest in these solutions if it’s not going to impact their bottom line. Operators face the challenge of driving new revenues and need to look beyond simply matching or barely beating their competitors’ services and prices. Not only do they have to deliver quality video content, they need to figure out innovative ways to monetize it and create incremental value. Just like video quality of service, methods of charging subscribers for video consumption must evolve in order to secure further revenue.
Operators must understand that mobile data volume has been, and will continue to, increase indefinitely. Innovation and disruption, such as application-based pricing, sponsored content, and targeted promotions, are required to draw in more customers and compel them to pay premiums for certain services. In fact, Cisco’s Visual Network Index report from February indicates that mobile data traffic will double every year, and in 2014, video is forecast to account for 66% of all mobile data traffic.
There are a handful of operators who are altruistically taking advantage of this market progression. Not only have they invested in optimizing the quality of videos being delivered on their networks, they’re also ensuring subscribers have more service choices. The most innovative company doing this seems to be America’s largest privately-owned carrier, C Spire. They looked beyond traditional data, voice and messaging and created a way to offer specific services that complement their subscribers’ lifestyles. By understanding what mobile subscribers want, C Spire was able to offer more tailored and personalized services by segmenting mobile video as a premium service. By doing this, customers had more choice and ultimately, more ways to spend their money the way they want. By being transparent in terms of services, billing and customer interactions, C Spire maximized customer experiences and subscriber longevity while providing the highest levels of QoE possible. In fact, after deploying a mobile data monetization solution to offer streaming video passes, C Spire realized increased revenues and a 20% drop in subscriber churn.
C Spire was one of the first service providers to understand that they cannot continue providing video services at a price below their cost of carriage, as many other operators do today. They’ve created unique price plans that appeal to their subscribers. At the same time, they found ways to monetize mobile data with an approach that makes sense to all their subscribers – whether they stream mobile video or not. By segmenting out video streaming, users will pay a premium for the service – whether it’s a two-hour, 10-hour, daily, weekly or monthly pass – but they will always know what to expect on their monthly bills. The subscribers are spending their money the way they want to, which is the precise objective for the new consumer economy – an ecosystem where people want to buy what they want and only when they need it. For the rest of the population that doesn’t stream mobile videos, they’re not required to pay for a service that they’re not going to use, hence reducing the cost barrier for a basic service.
Yankee Group reports that the number of global mobile video/TV users will jump from 250 million in 2010 to 450 million in 2014. This is primarily driven by the increased amount of mobile video content as well as the advent of “phablets” – phones with tablet-sized screens. Operators who can appeal to the new consumer economy mentality will be the ones who can offer unique services and pricing plans that are transparent and attractive, as well as favorable to themselves and their subscribers alike.