Telecom Lead India: Spending on consumer mobile media services used via the mobile handset will increase to $200 billion by 2017 from $161 billion in 2012.
According to Strategy Analytics, consumer mobile media services include mobile handset browsing, mobile applications, mobile games, mobile music, mobile video, mobile TV, ringtones, wallpapers and alerts. It does not include usage on the tablets.
Though operators remain concerned at being bypassed by providers of over-the-top media services carriers have gained considerably from consumer demand for media access on their phones.
Data revenue accounted for $100 billion, or 62.5 percent, of total mobile media spend in 2012, Strategy Analytics said its report called Global Mobile Media Forecast: 2001-2017.
Mobile access to web browsing, games, apps and social media services will continue to drive mobile data adoption, enabled by the growing installed base of media-centric smartphones and flexible data pricing.
“Going forward the challenge will be driving mobile media growth in less mature mobile data markets, where a large portion of users have basic or feature phones, remain served by 2G networks, but where demand for information, content and entertainment on mobile devices will be strong,” said Nitesh Patel, director of the Wireless Media Strategies (WMS) research program, Strategy Analytics.
Earlier, ABI Research said that the over-the-top (OTT) revenue is expected to touch $32 billion by 2017 from the expected $8.2 billion in 2012. Subscription services, like Netflix, have led the OTT markets in the past couple of years. By 2014, OTT rentals will surpass subscription revenues.
According to Strategy Analytics, casual data tariffs or service orientated pricing will be a requirement in these markets, particularly as low priced smartphones become increasingly available.
Mobile advertising will become an increasingly important revenue stream, more than tripling to exceed $42 billion by 2017, and accounting for 18 percent of total mobile media expenditure.
While there are headwinds for some of the largest players in the industry, there is a select group of wireless carriers with rising subscriber bases and a track record of successfully tying revenue to data consumption.
From 2007 to 2012, the average revenue per user (ARPU) of data for the four largest U.S. carriers grew from $9.50 to almost $27, a compound annual growth rate of nearly 23 percent, said Kristina Salen, portfolio manager for Fidelity Investments.
Mobile is becoming a core part of digital advertising with companies like Google making it easier for advertisers to deliver ads to mobile devices.
Facebook also reported 30 percent of its digital ad revenue derived from mobile, which underlines advertiser demand to test and experiment with well-targeted mobile inventory provided by popular social networks.
