TV-only stance could prove costly in the future

"Creating a high quality experience for the mobile video viewer is an essential ingredient to the success of a streaming video service." -Dan Taitz, President, Penthera

The recent upfront and NewFront festivities made it loud and clear that TV networks, advertisers and consumers are all embracing streaming video. While several networks talked about ambitious streaming plans, there was one word that should have been mentioned much more: mobile.

By embracing streaming, broadcast and cable networks at least understand that consumer behavior is changing, but the full story goes beyond how content gets delivered to the same TV screen. Creating a high quality experience for the mobile video viewer is an essential ingredient to the success of a streaming video service. Mobile viewership is soaring, yet many OTT providers are prioritizing the big screen and giving the mobile experience short shrift. Those providers are doing so at their peril. A TV-only stance is understandable, especially for legacy media companies, but it doesn’t align with the rapid growth in mobile video consumption. A failure to devote time and resources on the mobile side of the business now could prove costly in the near future.

The number of US smartphone video viewers will reach 187.7 million in 2019, growing to almost 205 million by 2022. Globally, the mobile video viewing audience is nearly 2.4 billion people. This year, for the first time, consumers will spend more time with mobile devices than they will with traditional TV. For adults under 50, this trend is even more pronounced: 41% of media time is spent with mobile and tablet compared to 22% with TV for 18-34 year olds, and 36% mobile and tablet compared to 34% TV for 35-49 year olds, according to Nielsen. Advertisers are paying attention, too, as nearly 50% of all video ads were viewed on a mobile device in Q1 2019, up from 40% last year. Despite this surge, even Netflix, widely seen as the standard bearer in OTT services, doesn’t prioritize mobile in the way that it should. Netflix’s share of downstream mobile internet traffic is just 2.4%, well below YouTube, Facebook and Instagram.

Last summer, John Stankey, the CEO of Warner Media, which oversees HBO and is planning its own standalone streaming service, indicated he was aware of how mobile is attracting consumer attention. “We need hours a day. You are competing with devices that sit in people’s hands that capture their attention every 15 minutes,” he told the NY Times. Yet what was missing from Stankey’s remarks was an understanding that streaming services, like HBO Now, could actually be what is holding someone’s attention within that handheld device.

Of the three hours and 43 minutes that consumers are expected to spend on their mobile devices each day, 40 minutes will be spent watching video, according to eMarketer. That represents significant growth, and more growth is projected, but that leaves more than three hours of daily mobile time available for OTT platforms to capture from other apps. Subscription OTT services that want eyeballs and engagement should be building out their mobile platforms to seize this opportunity. Given the advertiser interest in mobile video, AVOD services should be giving mobile equal consideration as well.

It’s not that mobile has been completely ignored, but for too many streaming services it’s an afterthought. Verizon’s short-lived go90 mobile video service lasted less than three years and reportedly had trouble finding an audience. One reason for audience troubles might be that consumers don’t need new mobile-specific platforms. They want their existing OTT subscriptions and services to come with them via mobile.

PlutoTV, recently acquired by Viacom, is a good example of a service that recognizes and is trying to exploit the mobile opportunity. Viacom is positioning itself to remain relevant in the next five years, while some of the established subscription giants aren’t making the same effort.

Streaming services seeking to maximize viewer engagement and satisfaction, and the revenue that comes with it, need to spend time thinking about the viewer experience across all of the devices that viewers use. This means building a friction-free user experience for mobile video and making it easy to discover content. It means solving connectivity issues so that viewers can enjoy video without interruption. Obviously, a frustrating mobile viewing experience will deter customers from streaming on mobile devices. But the problem is much bigger than that. Even if mobile viewing represents a small fraction of viewership, bad experiences on that platform will lead to overall dissatisfaction with the streaming service, and that’s bad for a brand. This is especially true for the key millennial demographic, because 18-34 year olds spend nearly twice as much time with mobile than with TV.

Mobile is not (yet) more important than the TV experience. Today, and for the foreseeable future, viewers will spend more daily time watching connected TV devices than watching video on a smartphone. However, mobile consumption is growing rapidly, especially among younger audiences, and OTT providers have a huge opportunity to grow their customer base and engender loyalty by ensuring that the mobile experience is the friction-free experience that consumers demand. To do that, they need to stop treating the channel as an afterthought.

Penthera is a global software company that develops and deploys products to help OTT providers improve the mobile video experience and drive business results.