The app of the month is Meerkat, a live video-streaming service that took off just as the annual South by Southwest interactive conference gathered in Texas. Meerkat has only existed for a few weeks, but it already has hundreds of thousands of users, including several Hollywood stars.
The startup has capitalized on its hot launch, using it to raise $12 million to fund its growth.
Meerkat, which relies heavily on Twitter as a distribution network, isn’t a particularly novel idea. Live video-streaming apps have existed for years, with mostly modest success. And Twitter will soon launch its own similar tool, Periscope, built by a startup it acquired earlier this year.
But Meerkat’s—and perhaps Periscope’s—timing seems right. After years of buildup, mobile video is finally breaking through.
In the US, for example, some 50% of iPhone owners, 46% of total smartphone users, and 36% of overall mobile subscribers reported watching video at least once in a month, according to comScore’s January 2015 survey. That’s up significantly from a similar survey in late 2009, when 23% of iPhone owners, 12% of smartphone users, and 3% of overall mobile subscribers reported using video.
What has changed? Almost everything. Mobile phones are faster and more powerful, with large screens capable of displaying beautiful, high-definition video. Mobile networks—where LTE service is available, at least—can now easily handle high-quality streams in both directions. Data service is frequently affordable.
Crucially, content is also increasingly optimized for mobile. Compare early attempts at mobile video services—such as MobiTV, which squeezed traditional, linear television onto tiny mobile screens—with today’s mobile-native offerings, such as Snapchat’s new network, Vine, and Meerkat.
And credit the rise of social distribution networks, such as YouTube, Twitter, and recently, Facebook, which said on its fourth-quarter earnings call in January that it was delivering 3 billion video plays per day, with 65% of views occurring on mobile.
“A shift to mobile is changing the way people consume video,” Facebook’s chief operating officer Sheryl Sandberg said on the call.
Meanwhile, advertisers understand video as a creative format and are used to spending handsomely for it on television. So Facebook and others are expecting real growth from video ads over the next several years. (Facebook’s smart move here has been to autoplay video in feeds, something Twitter is now testing.)
As a result, time spent watching mobile video is also increasing. In the fourth quarter of 2014, the average American spent 102 minutes per month watching video on a smartphone, according to Nielsen. That’s up more than 20% year-over-year. But it’s still a relatively small percentage of total screen time, compared to 149 hours of traditional TV per month, 43 hours of smartphone app and web usage, or 10 hours of watching video on the internet.
That leaves room to grow—but how much? Here’s one estimate, courtesy Cisco, which expects global mobile video traffic to grow to more than 17 exabytes—or million terabytes—per month by 2019, up about 10 times from 1.4 exabytes per month last year. (It’s worth noting that Cisco isn’t an unbiased observer. The company, which sells networking equipment to telecom service providers, stands to benefit from higher usage and demand.)
By another measure: Cisco projects video to represent 71% of all mobile data traffic by 2019, up from about 55% last year, and representing the bulk of mobile traffic growth.