nScreenMedia OTT multiscreen media analysis

Cisco forecasts explosion in video on mobile networks

Cisco revealed its forecast for the growth in mobile data network traffic through 2017 this week. Mobile data consumption is slated to grow at a startling 66% (compound annual growth rate) over the next 5 years reaching over 11 exabytes a month in 2017. By comparison, broadband data traffic is forecast to grow at a more modest 26% CAGR. What is more remarkable is that video will be the largest component of this traffic, consuming 66% by 2017. The Cisco data makes clear we will not confine our video watching to the home; that multi-screen, multi-network video delivery is the new realty for video services.Cloud delivery is a critical tool in the delivery of mobile media in general but especially so for memory hungry video. Many devices have limited storage capacity and the only way to effectively serve them is through the cloud. Cisco forecasts mobile cloud traffic will grow 14-fold between 2012 and 2017 with 84% of traffic cloud-delivered by the end of the period.What does this all mean for the individual user? Today, the worldwide average amount of data consumed on mobile plans is just 131MB a month. By 2017 that will increase 10-fold to 1.2GB a month. Using the Cisco figure of two-thirds of traffic devoted to video, that means the average mobile data plan subscriber will be consuming almost a gigabyte of video a month in 2017. According to Cisco this equates to about 6 hours of video a month. [1]

While growth in mobile delivered video is impressive enough it does not represent all the video that will be consumed on mobile devices. Far from it. Cisco estimates that by 2017 almost half of all data consumed by mobile devices will come from WiFi offload. Simply put, WiFi offload is where the primary data network of a device is a mobile network but the user choses to switch to a WiFi network when available. Device users may opt to do this either to save mobile bandwidth, and stay beneath a mobile data cap, or to get improved speed. Whatever the reason, the implication is that video consumption on mobile devices will actually double when accounting for WiFi offload. According to Cisco’s numbers, that means the average consumer with a mobile data plan will consume 12 hours a month of video.

Today laptops remain an important device in the consumption of mobile data. However, that will change by the end of 2013 when mobile devices, particularly the smartphone, take over. By 2017, traffic to smartphones will absorb 68% of mobile bandwidth with the laptop accounting for just 14%. Interestingly, Cisco claims that owners of 4G smartphones will consume about the same amount of data per month as a tablet user in 2017: over 5 GB per month. This is more than 4 times the bandwidth used by the average user and could imply using almost an hour a day of video on the devices. I asked Cisco to clarify which device they thought would deliver the most video and, surprisingly, they said the tablet would only consume marginally more than the smartphone. The larger screen of the tablet provides a much better video viewing platform and other research from TDG and Nielsen finds consumers prefer it over the smartphone.

There is much more data in the Cisco VNI forecast and I recommend you read the full white paper to get a complete picture. However, as we discussed in yesterday’s opinion about NPD TV streaming data, Cisco mobile VNI underscores just how critical mobile devices are to any video delivery service.

[1] Cisco’s 6 hours of video equates to a video stream of about 0.5mbps, which should provide good quality video on most smartphones

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