User Generated Video: Limited Ad Revenue

User-generated video will continue to account for close to half of total online video streams between 2008 and 2013, but disappointingly will produce no more than four percent of ad-related online video revenue at any time during this period, acccording the Diffusion Group.

According to Mugs Buckley, UGV currently accounts for 42 percent of online video streams, yet generates less than four percent of video ad-related revenue. Conversely, professional online video (including both short-clip and long-form content) accounts for 58 percent of streams and 96 percent of ad-related revenue, a reality unlikely to change over the next five years.

While the business of online video remains immature, Buckley notes that the continued growth in online TV viewing among consumers and the push to get this content directly to the TV will cultivate the larger audience for professional online video content.

No Mobiles on Planes?

H.R. 5788, "The Halting Airplane Noise to Give Us Peace Act of 2008," was approved by the House Transportation and Infrastructure Committee on Aug. 31, 2008. That does not necessarily mean anything much. It is just a committee vote, and the legislation is not yet scheduled for a floor vote, much less for consideration by the Senate. But some of us agree that people talking on mobiles can be quite an annoyance in the now-cramped confines of aircraft.

The European Union, though, seems to be moving ahead on inflight cellular service.

AT&T Bet on Jobs

Leslie Cauley, USA Today staff writer, says AT&T got a one-year extension of its exclusivity deal for iPhone sales in the U.S. market as part of the new deal with Apple to pay an upfront fee, rather than a share of monthly recurring revenues. The original exclusive deal was set to expire at the end of 2009. So AT&T has another two and a half years to wring more magic out of the iPhone before contending with other carriers.

The iPhone might seem like a no-brainer now, but back then it was little more than a concept, with no name, design plan or software operating system. And it was offered by a computer company that had zip experience in wireless.

And credit AT&T CEO Randall Stephenson for making a key, and somewhat "un-telco-like decision." in staking so much on the Apple deal.

"We're not betting on the handset," Stephenson says. "We're betting on Jobs."

That appears so far to have been the right decision. It isn't just the handset. It was the intuition that Steve Jobs, whose firm never had built mobile phones before, could bring something spectacularly new to handset design, and by extension to the mobile data business.

Imagine any stodgy, old school CEO at a firm that big, betting on a person, rather than a company track record. It's a sign of new thinking, for sure.

UK VoIP: Naked DSL Will Help

Continental Research estimated in April 2006 that Vonage had about six percent share of VoIP usage in the U.K. market, which is heavily skewed towards PC soft clients. But Vonage U.K. seems these days to be focusing on several user segments with higher propensity to use landline replacement services. A key segment is users with frequent needs to call the United States, says Vincent Potier, managing director, Vonage U.K.

But change could be coming. It is possible that customers will be able to buy a "naked DSL" service in the U.K., in the future. That will be important since 75 percent of broadband customers in the U.K. use DSL.

Still, the European VoIP market really was defined by Skype. Users expected to use headsets and make occasional calls on a scheduled basis, especially when calling internationally.

So Vonage has had to position itself as a different sort of experience: a replacement for the landline. Up to this point that has been a bit of a marketing challenge as U.K. users must buy a bundled voice line when buying DSL. So the opportunity for cost savings is not as great as would be the case in a "naked DSL" environment.

Still, more and more European countries are offering naked DSL, including France, Norway and the Netherlands. There being a fairly clear correlation between mass market VoIP and naked DSL availability, Vonage U.K.'s growth prospects will be aided quite a lot if the naked DSL option surfaces

13% Mobile Handset Growth in 2008

In the second quarter of 2008, tier one handset vendors enjoyed year-over-year unit shipment growth of between 15 and 22 percent, says ABI Research. ABI estimates that 301 million units were shipped during the quarter.

The mobile device market will deliver 13 percent growth to take 2008 annual shipments to 1.3 billion units.

“If there is an economic slowdown, no one bothered to tell the mobile device buying public,” says ABI Research vice president Jake Saunders. “In particular, consumers in emerging markets in Asia, the Middle East, Africa and South America shrugged off inflation fears to sign up as mobile phone users.

These healthy gains in net subscriber additions are stimulating replacement and upgrade sales. In developed markets handset purchases tended to be flat, but those consumers who did purchase dug deeper and paid out more for coveted higher-end handsets and smart-phones.”

In terms of market share, Nokia has passed the 40 percent threshold for the first time (40.3 percent). Samsung secured second place with 15.2 percent, while Motorola barely managed to keep ahead of LG with its 9.3 percent versus LG’s 9.2 percent, and both edged out Sony Ericsson (8.3 percent). There is a distinct possibility that LG might overtake Motorola by the end of 3Q 2008, putting Motorola into fourth place, ABI researchers say.

Social Networking Might be Key to Mobile Advertising

Social networkers also are much heavier consumers of digital content including text messages, mobile email, photos, music, games and mobile TV, say researchers at ABI Research.

“The fact that online social networkers consume more mobile content and media than mobile subscribers who aren’t into online networking may not be really surprising,” says principal analyst Nick Holland. “However, what we have long suspected is now confirmed by the numbers: for most kinds of mobile content, online social networkers consume about twice as much as their non-networked peers.”

What drives online social networkers towards consumption of mobile media? They are on average younger and more tech-savvy for a start. Also, many social networking networks are organized around a specific media-related interest such as photography or music.

“Advertising on social networks isn’t working particularly well, so promotion of mobile content on online social network sites should be a high priority for mobile operators, content distributors, media companies, and advertisers," says Holland.

Send a Text Message, Carriers Say

The earthquake that hit Southern California on Tuesday almost by definition was going to lead to a temporary spike in call volume and temporary blocking of many dial attempts. The perhaps interesting angle was advice by AT&T to "try text messaging on a mobile" as a way of getting messages such as "are you okay?" or "I'm okay" through the congestion. Good advice.