Welcome to ZenUnwired; a blog dedicated to tracking developments in technology and strategy, and to deciphering the impact of these developments on wired and wireless ISP's, device manufacturers, OS and application developers, and most importantly - you.

Monday, March 1, 2010

Data traffic on wireless networks is growing exponentially. How will carriers and content owners compete?

Online video viewership is exploding dramatically in the US. As a 2009 study by Arbitron & Edison Media Research shows, only 3% of the US population watched video online in 2003. This number has grown dramatically in recent years and now stands at 27% of the US population.

It is only but natural that as mobile devices become more advanced and capable, video viewership is going to ‘place-shift’ from the PC to the mobile device. In fact, the Pew Research Center reported today that 37% of American adults with a cellphone use their device to access the Internet, with one-third of the nation’s total cellphone users accessing some form of news wirelessly. Weather (26%) was the most often accessed piece of information from a mobile device, followed by news and current events (25%), the downloading of a news applications (18%), sports scores or stories (16%), traffic information (13%), financial information (12%), and news via e-mails or text messages (11%).

These trends point to certain strategic questions:

  1. For wireless carriers: As recent AT&T/iPhone issues have shown, mobile networks in the US are ill equipped to handle this surge in data traffic. So does this mean that these trends solidify the business case for 4G? Also, given the decoupling of revenues and data traffic, how do wireless providers price their services?
  2. For content providers: What lessons have content providers learnt from the internet era (when the advent of the internet decimated traditional revenue streams of the print media) that they can apply in the mobility era to successfully monetize their content?