134 Million Mobile Internet Users in 2013

There will be 134 million mobile Internet users in 2013, eMarketer now projects. Despite the global slowdown in new mobile phone sales, smart phone shipments will grow by 3.4 percent in 2009, International Data Corporation researchers project.

In fact, smart phone sales will grow three times faster than will sales of feature phones in 2010, IDC projects.

By 2013, Informa predicts smartphones will make up 38 percent of all handset sales worldwide, more than double their share in 2009.

“It is increasingly evident that for many marketers, mobile applications constitute a necessary avenue for reaching and engaging with their customers, either by building and marketing a proprietary application or sponsoring a third-party app,” says Noah Elkin, eMarketer senior analyst.

http://www.emarketer.com/Article.aspx?R=1007124

Shift from "Push Marketing" to "Pull Marketing" is Well Underway

It would be hard to name just one single reason traditional media are in trouble. In fact, there are several forces at work. Users are shifting attention to newer formats: getting news online rather than from newspapers, for example.

Then there is the shift of revenue: with classifieds now cannibalized by online sources, newspaper economics no longer are viable, as display ads and subscriptions always fall short of what is needed to product the product if classified revenue is pressured.

There are more subtle forces at work as well. "Push" marketing, which tends to drive display advertising, is not working as well as it used to. Other formats offer hope of better results, and most of those are Internet mediated.

Information richness now is the order of the day, so there simply are other ways to learn things, again typically mediated by Internet and mobile mechanisms. That means less "need" for traditional media.

Also, many if not most companies have discovered that the traditional media role has blurred. Companies can themselves become content creators, aggregating their own audiences. To a large extent, it now is true that "anybody can become a content creator."

That means less money will be spent on traditional advertising, and more on creation of content, which is the foundation for "pull" marketing. Instead of pushing messages at people who may be unwilling to receive them, companies are inviting users to participate by creating interesting content in various ways.

All of those forces now are at work.

Even Free PCs and Broadband Wouldn't Get People to Use It, Ofcom Finds

Some 43 percent of adults who currently do not have Internet access would remain disconnected even if they were given a free PC and broadband connection, U.K. regulator Ofcom says.

That's an important finding as it reinforces an important fact about broadband adoption: in some cases "access" might be an issue. But it is not the only issue, and might not even be the most-important issue.

If people don't want broadband, building more access facilities will not do anything to increase uptake.

The confusion is widespread. Many seem to assume there is a "broadband problem" in the United States because lots of people do not buy it. That's a bit like assuming there is a "Lexus" problem because more people do not buy them.

Product demand, not product supply, rapidly is becoming the main barrier to further gains in broadband use.

About 30 percent of U.K. residents do not use the Internet, Ofcom's survey found. About 20 percent of people without Internet access say they will start buying some form of Internet access within the next six months.

Some 42 percent of adults said that they had "no interest" or "no need" for the Internet. About 61 percent of such non-users are older or retired, and 61 percent say they never have used a computer.

For 30 percent of those currently offline the main reasons given for that choice was financial or lack of skills.

Some have proposed that subsidizing PCs and dropping prices, plus building more networks or adding more connections, would solve the "broadband" problem.

Ofcom says that may not be true.

When asked what would change their minds about going online, only nine percent said cheaper deals would be an incentive. Free training was identified by 11 percent as a behavior changer.

But the majority (58 percent) simply said they were "not interested" in having broadband or "don't know" what would entice them to buy it.

http://news.bbc.co.uk/1/hi/technology/8091398.stm

Cable Operators Should Worry About Hulu, Not YouTube

Hulu is a bigger threat to cable operators than YouTube is, argues Bernstein Research analyst Jeffrey Lindsay, who has been surveying hundreds of consumers about their internet TV viewing habits.

The reason is that most consumers typically indicate some willingness to pay for professional content, but few say they would pay for user-generated content. And that's where Hulu emerges as a strategic threat to other distribution formats, compared to YouTube, which remains a haven for the sorts of video people say they don't want to pay for. 

Hulu has rights to most of professional TV content, is getting viewer traction and most importantly has an advertising format brands understand.

The problem with YouTube is that much of the video is not the sort of fare most advertisers want their brands associated with. 

The majority of respondents polled by Lindsay said they would be willing to pay for professional content, for prices ranging from $1 for a TV show to $5 for a movie. 

But most would not pay for user-generated content. 

The Internet video seems well established, though. Some 74 percent of respondents said they watch internet TV on their computer monitors rather than connecting their PCs to the TV. 

Internet TV viewing might for that reason be viewed as ancillary to traditional TV viewing, rather than competitive. But users also watch shorter clips than on their TV, a 30-minute TV show or less in most cases.

http://www.washingtonpost.com/wp-dyn/content/article/2009/06/09/AR2009060900941.html

Video Will Be 90% of Consumer IP Traffic in 2013

By 2013, annual global IP traffic--driven principally by video--will grow more than 500 percent from current levels, Cisco now estimates. ideo. In 2013, the Internet will be nearly four times larger than it is in 2009. By year-end 2013, the equivalent of 10 billion DVDs will cross the Internet each month.

Cisco forecasts that 90 percent of consumer IP traffic, a majority of total IP traffic, will be video in 2013.

In 2013, Internet video will be nearly 700 times the U.S. Internet backbone in 2000.

Also, video communications traffic growth is accelerating. Though still a small fraction of overall Internet traffic, video over instant messaging and video calling are experiencing high growth. As a result, video communications traffic will increase tenfold from 2008 to 2013, Cisco says.

Real-time video is growing in importance. By 2013, Internet TV will be over four percent of consumer Internet traffic, and ambient video will be eight percent of consumer Internet traffic.

Live TV also has gained substantial ground in the past few years. Globally, P2P TV is now slightly over seven percent of overall P2P traffic at over 200 petabytes per month.

Video-on-demand traffic will double every two years through 2013, with consumer IPTV and CATV traffic growing at a 53 percent CAGR between 2008 and 2013, compared to a CAGR of 40 percent for consumer Internet traffic.

Cisco also predicts that mobile data traffic will also be overtaken by video, reaching 64 percent of total mobile IP traffic by 2013.

Cisco expects mobile video to grow from 33 petabytes a month in 2008 to 2,184 petabytes (or 2 exabytes) a month in 2013, which represents a 131 percent compound annual growth rate.

Peer-to-peer is growing in volume, but declining as a percentage of overall IP traffic, Cisco says. P2P file-sharing networks are now carrying 3.3 exabytes per month and will continue to grow at a moderate pace with a compound average growth rate of 18 percent from 2008 to 2013.

Other means of file sharing, such as one-click file hosting, will grow rapidly at a CAGR of 58 percent and will reach 3.2 exabytes per month in 2013.

Despite this growth, P2P as a percentage of consumer Internet traffic will drop to 20 percent of consumer Internet traffic by 2013, down from 50 percent at the end of 2008.

Google: One Billion Video Streams a Day?

Google reportedly has confirmed that it serves up one billion video streams a day, far more than most had guessed. That is four to six times higher than the best industry estimates! 

Until now, Comscore, for example, has estimated that Google streams 225 million videos a day, or about seven billion a month. Nielsen has estimated Google's video streams at 5.5 billion a month. 

Based on an assumption that Google represents about 40 percent of global video streams, that implies global usage of about 80 billion streams a month, again, far higher than most had supposed. 

What remains a challenge is the business model. To some extent, user interest in online video does drive demand for bigger ISP access pipes. 

But highly customizable, targeted episodic content underwritten by advertisers, which was supposed to be the model, remains just a hope. Hulu is essentially legacy linear TV with online distribution and fewer ads. Great for viewers, not good for content owners or distributors. 

Some criticize brands or agencies for being too lazy to learn how to use online video, but there is a simple explanation for why more doesn't get done in some digital media realms: it sometimes isn't a rational use of one's time to do so. 

About 11 percent of advertising budgets are allocated for all forms of online media, according to eMarketer. So in many cases, a time-pressed marketer would be hard pressed to justify spending quite a lot of time on 11 percent of the spend when a smaller amount of time can be spent optimizing nearly 90 percent of the spend. 

http://www.washingtonpost.com/wp-dyn/content/article/2009/06/09/AR2009060900324.html

$13 Billion Mobile Apps to be Sold in 2013

Mobile Internet access will see significant gains over the next five years, with the number of mobile Internet users reaching 134 million in 2013, says  eMarketer. By 2013, Informa predicts smartphones will make up 38% of all handset sales worldwide, more than double their share in 2009.

And means growth is use of mobile applications. Analysts at Piper Jaffray estimate that combined spending on consumer and business mobile applications will top $13 billion worldwide by 2012, a nearly fivefold increase over 2009.

Since advertising and marketing efforts likewise ultimately follow people to where they are and what they are doing, “it is increasingly evident that for many marketers, mobile applications constitute a necessary avenue for reaching and engaging with their customers, either by building and marketing a proprietary application or sponsoring a third-party app,” says Noah Elkin, eMarketer senior analyst.

http://www.emarketer.com/Article.aspx?R=1007124