Nielsen just released their Q3 and Q4 2010 State of the Media for mobile video usage. In the report they state that mobile video users jumped some 40% just both Q3 and Q4 in year-over-year numbers. That's a pretty massive jump so I thought it was time to do some investigating to get to the bottom of it.
At year end nearly 25 million Americans were watching mobile video according to the report. The Q3 09 to Q3 10 comparison shows a 45.53% jump while the Q4 09 vs Q4 10 shows 40.52% But the growth rates are fairly static when you look at them. Usage itself is up as well, during the second half of 2010 the average time per month spent with online video was four hours and twenty minutes, up from 3:37 Q4 2009 to Q2 2010. Teens top out at 8:40 with young adults (18-24) hitting 5:25 in Q3 and 7:13 and 6:30 in Q4 with adults 25-34 hitting right on the average.
Q3 2009 shows 15,744,000 mobile video users 13+ while Q4 2009 had 17,583,000 or about a 2 million user jump quarter-to-quarter. If you were to extrapolate that growth rate then Q1 2010 would be about 19.6M and Q2 would be 21.6M (it was 21.96M). Q3 was set at 22.9M and Q4 at 24.7M so theoretically, mobile video growth is actually slowing.
Here, I charted those numbers for you to illustrate my point. Now the blue line represents the the growth rate from Q3 2009 and Q4 2009 as recorded by Nielsen, the rest are extrapolated on the blue line from the previous numbers. The orange line shows the actual recorded values. So as you can see Q2 2010 was actually an exceptional quarter but that growth in the second half of 2010 is actually lower than the blue line which means there was a decline in growth which seems to be continuing as the lines are getting further and further apart near the top right corner.
So, yes, 40% year-to-year growth in the quarters was nice and all is well in mobile video. But, as with online video itself, there is a decline in growth. Granted, online video user numbers seem to have peaked and I predicted that there will be only a small amount of growth as online video is at 85% penetration in regards to US Internet users.
Now, I've been saving this kick ass infographic from Nielsen until a time when I found a use for it, which is today. In the infographic you can see that there are 228 million mobile phone users age 13+ (the same demographic as the video usage.
So, given that there were 24.7M mobile video users that means that just 10.8% of mobile phone users are actually using them for video.
Sure, I know plenty of people who don't have video-capable phones just yet so that makes a lot of sense.
It also means that there is a lot of room for expansion and so a jump of 1.84M per quarter, growth of roughly 0.8% per quarter isn't all that astounding. At that rate, it would take about 49 quarters to reach 50% of mobile phone users who watch video. That is 12 years from today since it's the last day of Q1 2011.
But that's the problem with flatline extrapolation of data. I did not take into account things like the percentage of new mobile phones that will video capable and at affordable price points, the percentage turnover of people with non-video to video-capable mobile phones, the increase in mobile network speeds that make video more viable on those mobile phones and a wide range of socioeconomic factors.
The Magnificent Christophor: Prognosticator Extraordinaire!
So the good news is it's growing, the bad news is it's slowing, the good news is people are viewing mobile video more, the bad news is...no wait, there's no bad news on that one unless you say that they're mostly younger and have less income to spend on the products you want to market to them.
I don't think that the market growth is really in danger. In fact, with the new 4G networks coming round and the merger of AT&T and T-Mobile (which is terrible IMHO) along with bigger, faster mobile phones, including the so-called superphones with the NVIDIA Tegra chips (Hi guys) in them, I see that growth rate swinging past 1% per quarter later this year. Plus, if you were to put tablets into the mix (just those using 3G and 4G for connectivity) it could skyrocket. Granted, those aren't exactly mobile phones, but they are using the mobile data network. Then again, my PC has a USB dongle to do the same thing, but it's certainly not a mobile phone.
Still, discounting tablets, I believe that mobile video growth will grow as it has been. I also believe that in maybe Q3, when many new phones are out and people have gotten into them, it might see another spike like Q2 2010. That jump isn't tied to an iPhone release (iPhone 4 was released June 24, 2010), however it might mistakenly be attributed to the iPad (released April 2010) by the people that were polled for the research. I also believe that the growth rate quarter-to-quarter will start to see an acceleration thanks to those new bigger, stronger, faster mobile phones.
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