Mobile Entertainment. Mobile is the new media

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1 Entertainment is the new media

2 The proliferation of smartphones and the subsequent entry of tablets have resulted in a major shift in mobile entertainment and mobile user behavior. Streaming media and video services, mobile TV and games, etc., have re-defined digital entertainment ushering in new fresh experiences for mobile users. The result is an unprecedented increase in mobile content and consumption. The steady increase in games and app downloads, average TV viewing times on mobile, and an expanding mobile entertainment audience base signals a substantial demand for such services currently and projected growth in the future. The entertainment industry, too, is fast realizing the potential and benefits of adopting mobile as a key media to not only reach a growing audience but also to make content production and distribution agile and cost-effective. So, what s causing these changes in the entertainment sector? What are the factors catalyzing the mobile entertainment boom? How is the mobile driven environment taking shape? Our cover story this time focuses on mobile entertainment and studies the drivers, barriers, opportunities and the potential future ahead. entertainment grows big Types of Entertainment Gambling Infotainment Types of Entertainment Adult Services TV Music Games Entertainment: is the new media/ 2

3 A few years ago, mobile entertainment just meant ringtones, wallpapers, a few full tracks and video downloads that you could share with friends. You could, of course, carry a good amount of music, images and videos on your mobile phone, courtesy the memory card, but it has come a long way since then. Entertainment leads in Products purchased on Smartphones Digital Purchases(movies, TV shows, songs/music,ebooks) Clothing or Accessories Tickets(movies, concerts, theatrical productions, sporting events) Daily Deals Gift Certificates Electronics Delivery or Pickup Hotel Stays 37% 35% 34% 34% 32% 31% 29% 47% Car Rentals Airline Tickets 24% 24% source: Millenial Media/comScore Entertainment Study, 2012 Latest studies by Juniper Research reveal strong growth among games and infotainment applications will drive mobile entertainment revenues from $36 billion last year to over $65 billion annually by It also finds that growing satisfaction with mobile TV on tablets will raise average monthly viewing to 186 minutes per month in users who pay for music content will more than triple to reach 178 million by devices are challenging other entertainment media to be the preferred choice. This change has touched upon every key function of the industry, from content production to promotion and distribution.the advent of mobile devices with large screens and rich multimedia functionalities supported by speedier bandwidth have led to democratized access to content anywhere and anytime. Consumer demand has also shifted. Now the consumer can get access to his favorite movie, sitcom, news or any other TV program on his primary device, which is either a smartphone or a tablet. apps, on the other hand, have revolutionized the way people discover and view content. Every major movie, music and game studio today has released or is releasing an app which is quickly becoming the access point for users to explore and enjoy their content. Entertainment has moved beyond a fixed slot and closed doors to on-demand and streaming. Entertainment: is the new media/ 3

4 A new study from TVGuide.com finds that people are watching more TV now than ever. Fortytwo percent of viewers are watching more streaming content than last year, and 89 percent of respondents said that they discovered new shows on demand or online after episodes or seasons had already aired. Further, 30 percent of respondents who pay for video said that they are watching more paid video than they did in And, 68 percent of respondents are watching one to five hours of video per week via apps on their mobile devices. The Factors Driving Smartphone Ownership is on the Rise US 31% 38% FR 27% 38% UK 30% 45% GE 18% 23% JP 6% 17% Phase 1 (Jan+Feb 2011) Phase 2 (Sep+Oct 2011) source: Google The ubiquity of mobile devices, the growing ownership of smartphones, rise in mobile internet adoption and speed and realization of mobile as a major distribution channel by content producers are the key drivers behind the massive growth in mobile entertainment. Furthermore, app stores provide a perfect platform for content producers to promote and distribute their content cost-effectively sparking a massive upsurge in usage. Brands too have realized the importance of mobile devices as a perfect distribution channel and the result is the availability of thousands of free apps and games with an audience already hooked in to their devices. Entertainment: is the new media/ 4

5 Opportunities in Entertainment Types of Entertainment investing in 4% 2%2% Theatrical Release 19% 43% TV(Cable & Network programs) DVD release Digital goods & entertainment 30% Theatres & ticketing services Console games source: Millenial Media 2011 Gaming Sophisticated features in mobile phones and tablets have resulted in immersive games with engaging game-plays. There has been a significant change in the gamer profile; gaming is no longer restricted to teenagers. A typical mobile user is between 20 to 25 years old. Currently, we are witnessing a significant interest for games in the 40+ age group. social games have gained tremendous traction of late. Music entertainment is also bringing tremendous opportunities to the music industry. apps are aiding the industry by reaching out to a new audience, driving-up paid content and retaining customers by continuously engaging with him. The success of apps like Spotify, Last.fm, Pandora and Shazam, etc., serves as a good example for other players to reach their audience via apps and benefit from it. Gambling Mobility is also serving as a potent tool for the gambling industry. apps serve as a great medium for casinos and others in the gambling industry to reach their audience and allow them to place their bets Entertainment: is the new media/ 5

6 from anywhere at anytime. TV For the TV industry, mobile apps have emerged as a successful enhancement. In addition to allowing viewers to watch their favorite programs on-the-move, thereby, increasing eyeballs and TRP; the apps are also great tools for creating channels to engage their audience through social media sharing, recording, information on stars, upcoming programs, teasers, reminder alerts and polls, etc. Movies The movie industry, struggling to attract people to the theatres and multiplexes, has found mobility to be a great way to create buzz before the release of a movie. A mobile game based on the movie characters and mobile app with trailers, star cast interviews, release updates, etc., have proven to be immensely successful in luring an audience and getting the cash registers ringing. Content Production Mobility is also playing a big role in the production phase with apps developed to connect and monitor recording devices, pre-visualization composers for storyboards and set-designing, etc. Brand Promotion There is tremendous scope for brands to use mobile entertainment to engage with an exploding mobile connected consumer base and to interact with them. Businesses are slowly realizing the potential for promoting their brands through games and catering to the need for instant gratification with products and services. Early adopters like Coca-Cola, Nike, etc., had reasonable success, encouraging others to make mobile games a key element in their marketing and branding. Entertainment: is the new media/ 6

7 The Entertainment Market $70,000 Total Revenue(in $m) from Entertainment to 2016 $ Infotainment Social Media TV Music Games Adult Gambling The mobile entertainment market has changed radically, in scale and shape, over the past few years. content once driven by value added services like ringtones, caller tunes, wallpapers, etc., is now being driven by streaming videos, high-end gaming, social media tools and other entertainment apps. According to Juniper Research, global mobile entertainment is estimated to reach $65.9 billion in 2016 from $36.1 billion in 2011, registering a CAAGR of over 12 percent. gambling is predicted to grow by a CAAGR of 29 percent from $1.2 billion in 2011 to $4.3 billion in 2016 fueled by soaring usage of tablets. According to the research report, adult content is estimated to grow at a CAAGR of 19 percent. The mobile music sector, which as recently as 2008 accounted for nearly 42 percent of revenues in the industry is still expected to remain the biggest sector in the industry. However, the sector will see a decline of CAAGR 2.2 percent over the forecast period with games and social media occupying twice the worth of mobile music market. Entertainment: is the new media/ 7

8 The Challenges While mobility offers great benefits to various players in the entertainment industry to reach to a wider audience and to engage with them and improve profitability, there are still many challenges that the industry needs to address to realize all of the benefits from mobility. is a different medium which is still in its early years and, therefore, finding the right user-interface to optimize user experience and easy facilitation to discover and view content is a challenge which many mobile content producers are struggling to answer. Secondly, mobile devices differ in form, capabilities and functionalities, calling for a content format and delivery mechanism that will be suitable to all devices. While many parts of the globe are experiencing speedier bandwidth in 4G LTE, still there remains a large area which is only covered with relatively slower internet coverage. The content produced and distributed should also be compatible with varying internet speed without compromising the quality. Moreover, mobile entertainment consumes a lot of data making it expensive for users to enjoy it on their devices. The high cost data services are a big impediment in the wider adoption of mobile entertainment services. Also, security in mobile payment transactions for paid-content services needs to be addressed to gain the confidence of users and push higher volumes for it. Our Recommendations Embrace mobile entertainment: The common assumption that people watch a video or play a game on mobile only when they are on-the-go is quickly changing. In fact 47 percent of people play games on smartphones and tablets at home. So, mobile is quickly emerging as the preferred device for entertainment and that s why it makes perfect sense for you to adopt it whole-heartedly. Understand mobile as a medium: devices have their limitations. users have a very short attention span. You must create content that syncs well with the medium. Understand mobile users: A large part of the mobile entertainment audience, particularly the gaming audience, is different from what we have seen traditionally. This population is into gaming to have instant fun for a few minutes. They want simple games with easy goals to achieve that still offer compelling game play with no time commitments. Reaching the next level doesn t give them as much pleasure as spending a few minutes achieving a few goals. The huge popularity of Angry Birds is a good case in point to illustrate how simple game play can be a huge success. A long-term roadmap: Adding new features to your app will keep the excitement level up compelling users to return. Also, keep it in sync with the changing times. Technology is moving faster and so is the audience. Monetizing it: What is your revenue model? entertainment services offer plentiful opportunities to earn revenues. You can either offer free content and earn money from advertising or paid content or do both. Decide before you begin. Entertainment: is the new media/ 8

9 The Days Ahead is the future of entertainment. As the technology evolves further and costs of mobile devices and data services go down, we will see an upsurge in mobile content consumption, particularly in the videorich services and mobile TV. Newer technologies like Augmented Reality, Peer to Peer (P2P), Near Field Communications (NFC), 3D in mobile, etc., which are at nascent stages, will further gain traction to make entertainment services richer and more engaging. entertainment, which is still a luxury for many, will soon become part of the mainstream. And that s where the audience and the money are. Get ready to tap it! About [x]cube LABS [x]cube LABS is one of the leading mobile apps development and consulting firm, headquartered in Dallas, U.S and with offices in New York and Hyderabad, India. With expertise across all the major mobile platforms, [x]cube has delivered over 500 apps till date and has an enviable client list comprising of some of the biggest brands like GE, Intel, Texas Instruments, Hasbro, Mattel and 24 Hour Fitness. [x]cube s understanding of the mobile space and technology, complimented by its rich experience across all the major industry verticals and the capability to deliver end-toend solutions, make [x]cube the perfect mobile consultant of choice. Reach [x]cube LABS connect@xcubelabs.com To integrate your enterprise people, processes and products with customized, avant-garde mobility solutions or to explore mobility opportunities in your enterprise with our experts, please feel free to contact us at connect@xcubelabs.com. We encourage you to continue exploring our website ( ) to find out more about our services. [x]cube is the premier mobile solution partner for companies and individuals creating the next generation of digital applications. [x]cube develops custom solutions for the iphone, ipad, Android and Windows platforms. [x]cube is a division of PurpleTalk, Inc. xcubelabs.com connect@xcubelabs.com