[Vidéo sur mobile] Interview with Stéphanie Hospital, Executive VP Orange
1 / What are the prospects for the mobile video market?
The mobile video / TV market has exploded in recent years and is expected to continue its strong growth.
There has been a very strong increase in the number of pay-per-view video views, rising, in 3 years, from 5.2 billion to 46 billion per year, for France, the United Kingdom and Spain. To this must be added the videos consumed by subscription, which went from 104 to 160 million annual downloads in 3 years.
Mobile video sites have also seen their audience grow significantly. In France, audiences increased by 11% from February to July 2012, going from 10.8 million to 12 million mobile video users. In the United Kingdom, the penetration rate of mobile video gained almost 20 points from August 2011 to August 2012, from 19% to 38%.
2 / What are the reasons for the explosion in video consumption on mobile?
The key factor is the arrival of smartphones with sizes and screen qualities far superior to traditional mobile phones. The penetration rate of smartphones has exploded. While in 2010, only 20% of the number of French subscribers owned a smartphone, we estimate this share to be over 40% today and expect a rate of 75% for the Orange base in 2015. However, 70% of smartphone users consume video on their mobile, 13% of which are daily.
The arrival of tablets will further accentuate this phenomenon. Launched at the start of 2010, they are experiencing unprecedented enthusiasm: sales literally exploded from 2010 to 2011, going from 17 to 65 million units sold, and should still experience very strong growth in 2012 and the following years. It is estimated that viewing videos is the 3e use on tablets after Internet access and consultation of emails. Thus, more than 1 in 2 tablet users watch videos at least once a week (compared to 1 in 3 mobile users).
Thanks to this new equipment, the consumption of videos on mobile devices has more than quadrupled in the space of one year: in January 2012, more than 27 million videos were viewed on these devices compared to 6 million a year earlier.
We must of course mention other development levers, including the evolution of operators’ tariff offers, with the generalization of data packages which have strongly favored video consumption, as well as the increase in mobile speeds, which should be continue with the development of 4th generation networks (LTE).
The evolution of the content offer also plays a role – in particular the development, by television channels, of applications which allow direct access to live or catch-up content as well as to bonuses or additional services and this, without taking out a subscription.
Finally, the development of social network sites, community video platforms and the phenomena of viral consumption to which they offer their support, also strongly contribute to the development of mobile video uses.
3 / What are the novelties on this market?
In general, we have never consumed as much video on the go as today. In particular, we can observe a sustained development in the uses of multi-tasking: viewers consume video on their mobile devices simultaneously with their consumption on the television.
In terms of supply, in addition to generalist video-on-demand platforms financed by advertising, we note the rapid development of alternative models of TV or video consumption: catch-up or live TV and paid video on demand, in particular. by subscription (SVOD)
Driven by these new services, revenues are also starting to take off. In particular, advertising revenue is expected to increase sharply on mobile TV and video services. It is thus expected that mobile video advertising spending in France will more than double each year over the period 2011-2015, going from 0.2 to more than € 7 million. At European level, the expected growth is even stronger: from 2.6 to 78 million €
4 / What is Orange’s position?
Beyond the development of data offers, Orange strongly supports the development of video uses. We have key assets for this:
A strong content offer with pre-embedded services in our terminals, a powerful mobile portal consulted by nearly 6 million customers each month and an application offer very well positioned and rated in the various app stores (Orange TV, Ligue application 1…)
Orange TV, strong of the 2e wider range of on-demand channels as an access provider, and which today has more than 4.7 million subscribers in France
It should also be noted that Dailymotion is the 10e mobile site in France and 6e on the iPad. The number of videos viewed from mobiles and tablets has tripled in one year and represents an increasingly significant share of the audience. In terms of advertising revenue, the market is also starting to take off and we have high hopes for this year.
We are also positioning ourselves on innovative uses, such as social TV. Launched in July 2011, TVcheck is thus a free application which offers a kind of “gamification” of the TV experience. It allows its users to interact around TV content, in a framework offering social functions such as comment, recommendation or even status update. The connection between the application and the broadcast program is based on a visual recognition system, so that the user just has to point their smartphone at the TV screen for the program to be identified.
We have also developed an Orange TV Program application, an interactive guide that allows subscribers to view TV programs from a wide selection of channels, enriched by Web services and content, but also to follow and send live tweets on the TV program of your choice.
5 / What do you think are the next trends to follow?
Multi-screen uses are a subject of major attention in our eyes: whether it is multi-tasking or consumption patterns of the same content through several terminals. So it will be easier and easier to start a program on your tablet and continue it on the living room screen. To enable the development of these practices, mastering over-the-top active ingredients such as the Dailymotion player is key.
Social experience and the recommendation of content are also structural factors in the evolution of practices and economic models. In the TV experience, the content, in itself, will remain the heart of the promise of value. However, the value gradually invests the interactive, social, community experience that accompanies their consumption. This is why TV / video offers, in their mobile versions, are integrating more and more social functions: recommendation, gamification, commentary, program bonus.
This socialization of content brings users back to the screen and offers advertisers a vast potential for multi-screen campaigns. In addition, thanks to social networks, the collective experience of the TV meeting is recreated. Even at a distance and on the move, we all find ourselves in front of the big screen as in the past.
Strategy Analytics April 2012
Médiamétrie Mobile July 2012
comScore GSMA August 2012
A total of 300 units sold in 2016 are expected. Source: Idate 2012
Online TV barometer 2012
FirstPartner – Nov 2011
Médiamétrie, August 2012