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Here's what happened in mobile this week

Bii hulu video consumption devices

OTT DEVICES DRIVE DIGITAL VIDEO STREAMS FOR HULU: While mobile devices are driving a significant uptick in digital video consumption in the US, OTT devices like smart TVs, connected devices, and gaming consoles are driving long-form premium content, according to a new report from Hulu. The popularity of OTT devices and time-shifted viewing habits for premium content drove OTT devices to account for almost 60% of all streams on Hulu in the first quarter of 2015.

  • The share of video streams on PCs has fallen sequentially, and it will likely continue to do so in the quarters to come. In the most recent quarter, PCs accounted for less than one-fourth of Hulu’s digital streaming, down from 41% the same time last year.
  • Mobile is holding steady. Mobile devices accounted for 17% of Hulu’s streams in the most recent quarter, which held steady from Q3 2014. This share is unlikely to remain flat, as greater phablet adoption in the US, among other factors, helps drive mobile video consumption.

Hulu ascertains that mobile’s stagnant share, combined with the drop in PC viewing, points to a growing trend of living room streaming habits. When content is streamed to a large screen, viewers tend to watch with friends and family; OTT devices average 1.4 viewers per stream, and for certain programming, the “co-viewing” factor, as Hulu calls it, can reach an average of two viewers per stream.

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Bii data offload 2019

GOOGLE WANTS FAST, FREE WI-FI TO BE UBIQUITOUS, STARTING WITH NYC:Google’s recently launched city-oriented innovation startup Footpath Labs is setting its sights on improving cities with pervasive Wi-Fi access. Footpath Labs is directing a group of investors in acquiring Control Group and Titan, two companies working on an endeavour dubbed LinkNYC to blanket NYC with free, fast public Wi-Fi. Via this joint acquisition, the two companies will merge into a new startup called Intersection. Intersection will work with partners like Qualcomm and Comark to bring free public gigabit Wi-Fi to NYC.

Fast, free Wi-Fi is important to Google’s own mission and the greater ability of telecoms to service dense cities.

  • Project Fi, Google’s mobile virtual network operator (MVNO) endeavour, is predicated upon consumers accessing mobile communications on Wi-Fi. While it’s unlikely that Google is looking to become a bona fide mobile operator, it is looking to prove new technologies around seamless handoff between Wi-Fi and data networks. The success of Google’s project large-scale and long-term will have a lot to do with the access of high quality Wi-Fi.
  • Telecoms have a hard time handling very dense cities like NYC because the high concentration of consumers bogs down even the most efficient data networks. While small cells and Wi-Fi handoff are two tactics that can help alleviate overburdened networks, both small cells and Wi-Fi access are far from pervasive. If NYC and other dense cities were blanketed with Wi-Fi networks it would help telecoms be able to handle larger capacities.

Wi-Fi handoff will be increasingly important in the years to come as smartphone penetration increases ahead of the rollout of 5G networks. Over half of 4G traffic will be offloaded in 2019, when mobile data traffic is expected to be six times the 523 petabytes per month it saw in 2014.

BLACKBERRY’S SOFTWARE STRATEGY MORE IMPORTANT THAN EVER: BlackBerry, one of the smartphone industry’s original titans, continues to shrink as its device turnaround strategies fall flat. The company sold just 1.1 million phones in Q1 2015, down half a million from the preceding quarter. Comparatively, both Apple and Samsung each sold ~75 million in the same quarter. Last year, BlackBerry embarked on a retro comeback campaign in which they introduced a revamped version of their legacy smartphone model in hopes that nostalgia from its once-large user base would catalyze sales. BlackBerry CEO John Chen said the company will follow through with plans to launch new devices later this year and believes the company can still profit from its handset division.

As BlackBerry device sales continue to atrophy, the company’s focus on software is crucial for it to sustain itself in the mobile arena. Though the company’s software and patent licensing business grew 150% to $US137 million sequentially, Chen attributed much of that from two large deals and doesn’t expect to see growth in the software division in the current quarter.

PROSPECTS IMPROVE FOR INDIE APPS: As with most industries, a high concentration of revenue among a small group of companies indicates a monopoly-driven environment with difficult prospects for new entrants. While revenue consolidation in the global mobile gaming industry was high in Q4 2013, it dropped by 40% through Q1 2015, according to App Annie’s new App DNA report (see screenshot, below). Not only are mobile gaming revenues distributing more evenly, but so are downloads; in tandem, these point to improved monetisation and marketing opportunities for small and mid-sized game development studios and independent developers. Of course, this balancing varies by market:

  • Both mobile gaming download and revenue concentration dropped in western markets, like the US and the UK, in Q1 2014 year-over-year (YoY).
  • In South Korea, revenue concentration grew despite an evening download distribution, which highlights some difficulty for smaller app developers to monetise their products.
  • The opposite held true in China (based on iOS stats only), where mobile gaming downloads saw heavier concentration YoY but more evenly distributed revenues.

This global balancing may not persist as the volatile app market continues to change. There’s a long-standing tendency for mobile trends that catch on in Asian markets, like China and South Korea, to see delayed traction in Western markets, like the US and the UK. We’re starting to see this trend hold true with apps becoming gaming platforms, which drives consolidation in terms of downloads and revenue. Asian companies like China’s Tencent, which owns popular mobile messaging app WeChat, and Japan’s LINE have been building out platforms over the past few quarters and have looked to games to monetise their users. The US is starting to see some of the same, particularly with Facebook Messenger’s recent addition of mobile gaming. If the west follows this eastern mobile trend, it’s possible for mobile gaming revenue and downloads to see more consolidation.

SNAPCHAT, ‘THE BEST MOBILE VIDEO PLATFORM’: Snapchat, the US-based ephemeral mobile messaging app, recently made brand-friendly updates to its product that enables advertisers to reach its large mobile millennial base. Although most information regarding mobile ad performance on Snapchat has previously been conjecture, recently released stats from the company have shed some light on how brands are faring on Snapchat.

  • There are more than 2 billion video views on Snapchat each day.
  • The mobile and first-person nature of Snapchat is proving appealing for live events. Up to eight times as many 13 to 34 year olds in the US opt to view Snapchat’s live stories rather than TV for similar events.
  • Because Snapchat is mobile-only, it boasts some benefits over Facebook and YouTube, both of which must cater to desktop users in addition to their mobile bases. Ads on Snapchat are always full-screen, always willingly viewed by the consumer, and always made for mobile. None of these items are true for Facebook or YouTube.
  • Snapchat’s vertical videos see a completion rate up to nine times that of horizontal mobile videos.
  • Consumers who saw an ad for a movie on Snapchat were three times as likely to have seen the movie as opposed to non-Shapchatters in same demographic.

Snapchat is far from the most ubiquitous mobile messaging platform in the game (see chart, below), but its 100 million daily active users are members of a demographic highly sought by advertisers. Of the 13 to 35 year-olds in the US who use a smartphone, 60% use Snapchat, and almost 40% of Snapchat’s monthly users fall in the 18 to 24 year-old age range.

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