YouTube and not pay-TV to benefit from 4G rollout
Joseph O'Halloran | 12-12-2010
Yankee Group expects 2011 to be a big year for 4G, as operators scramble to roll out network upgrades, new devices become available and marketing for next-generation services reaches, what it calls fever pitch, and yet the leading telecoms analyst believes that few in the mobile pay-TV industry will benefit.
In its new report, " 4G Fuels the Decade of Disruption," Yankee Group predicts a slow start for 4G and notes that nobody should prepare for a huge initial explosion in service take up: by the end of 2011, it predicts that leading 4G candidate technology, LTE, will account for 0.04% all mobile lines. However , the analyst does adds that 2011 will likely be a pivotal year as moves made by players now will determine their ultimate fate in the marketplace.
Yet, somewhat counter intuitively, given that 4G offers everything that 3G didn't at launch—that is high enough bandwidth on which to base compelling mobile video and mobile TV experiences—Yankee Group does not see mobile video won't as the killer 4G app everyone expects.
The analyst says that despite what it calls “prodigious” amounts of network bandwidth video applications consume, they do so largely on behalf of only 30% of mobile users who watch video at least once a week. Furthermore, it suggests, mobile video use isn’t just constrained by bandwidth, but also by how much undivided attention mobile consumers can spend on video.
On video’s prospects, the analyst concludes : “Without today’s constraints on mobile bandwidth, we see consumers increasing their use of music services…more than their video consumption…The losers will be those companies that have spent millions to develop pay mobile video platforms that largely go unused through 95% of a 4G user’s day. Companies such as FLO TV have already gone bust; expect more to join their ranks as unpaid video distributors such as YouTube continue to dominate the majority of 4G video usage.”