Smartphones are overtaking tablet PCs as top choices for online video viewing – Does this represents a significant change in the mobile landscape?

Adobe Inc. (ADBE) recently released its quarterly digital index for Q4 2013 which showed quite a significant shift in the preference among users using smartphones, versus tablet PCs in their consumption patterns for digital online entertainment. A table showing the percentage growth in the usage of three mobile devices (Smartphones, Tablet PCs, and Gaming Consoles) is as follows:

Chart depicting the mobile share of video starts by device - March 11 2014

Source: Adobe Digital Index | The US Digital Video Benchmark – 4Q 2013

It is interesting to note that based on the table, one of the main modes of online digital entertainment consumption has been coming from the use of smartphones at approximately 83.0 percent when comparing the year-over-year changes during Q4 2013 versus Q4 2012. The 83.0 percent growth did outpace the pace of growth in the table PC space in terms of the preference of usage of which mobile devices for most of their digital online viewing. Although gaming consoles did represent a quite a significant change in the consumption of digital online viewing (200.0 percent year-over-year (yoy) growth), its share of video starts showed a small increase of 0.03 percent in Q4 2013, versus Q4 2012 at 0.01percent. This could also represent the fact that despite the various improvements made to gaming consoles by prominent electronic giants such as Sony, Microsoft, and Nintendo, along with the variety of video graphical effect improvements in many gaming programmes, most consumers tend to prefer the use of smartphone as opposed to the use of gaming consoles due to factors such as portability, and the fact that in most cases, not many people are very far away from accessing digital content through their smartphones, as it is after all, a necessary telecommunications device for everyone. The presence of a gaming console will soon become redundant, when one can easily flip out their smartphones and start to indulge in their digital online entertainment. Also, gaming consoles are hardly seen as devices one will think of when accessing digital online entertainment, or to view a movie/television programme.

Another interesting fact that could be drawn from this recent digital online viewership survey conducted by Adobe Inc. is the type of digital content most users will access via their mobile devices, and it is sporting events. The video stream growth coming from this segment is mostly driven by seasonal factors such as winter, where sports events such as the National Football League (NFL) Championship series, Major League Baseball (MLB) World Series Finals in the United States, English Premier League (EPL) soccer games in the United Kingdom during Fall/Winter seasons, among other most viewed sporting events.

According to the Adobe Inc. Digital Online survey, sports video streams are up by 640.0 percent on a year-over-year (yoy) basis; 25.0 percent of online viewing on a special sporting event such as the recently concluded Super Bowl Championship Series in February 2014 are accessed through the use of mobile devices, and mobile viewing is up 73.0 percent yoy. A table illustrating the month-to-month (MTM) growth in the type of events that were being accessed through the use of mobile devices is as follows:

Chart depicting the video starts growth since 2011 - March 11 2014

Source: Adobe Digital Index | The US Digital Video Benchmark – 4Q 2013

Readers might notice the phenomenal rise in the total number of video starts growth in 2013 has largely been driven by sports-related media. The fact that smartphones are increasingly being used to access sports related content is hardly surprising, given that smartphones are increasingly being used while boarding the subways, buses on their way to the office, home, and basically, the destination one will head to on any given day. It also acts as a form of entertainment if one feels stressed out during the work day, and will like to have some media entertainment in order to unwind, or simply to ward off the boredom associated with long commutes.

The online media entertainment survey produces quite a significant finding and conclusions surrounding the preferred choices of access to digital online entertainment while on the go. However, the survey did not conduct some studies on the use of phablets, which combined smartphones and tablets into a simple device, capable of satisfying the digital online access needs of many consumers, and comes with a slightly larger screen size. I believe that with phablets increasingly being added with features that are comparable with smartphones and tablet PCs, may consumers will gradually ease into the transition as we have seen in smartphones following the introduction of Apple Inc,’s (AAPL) IPhone a few years ago.

About Hock Meng Tay - Chief Editor, Asia-Pacific Region

Hock Meng Tay, CAIA has written 181 post in this blog.

Chief Editor, Asia-Pacific Region Hock Meng Tay is a CAIA holder and is currently taking CFA qualification. He has over 10 years of experience working as research associate in several investment companies.He is an expert in financial analysis and has published research reports in his current role. He obtained his Masters of Business Administration in Integrated Management and Masters of Arts in Economics while serving his internship in Starsource Inc

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About Hock Meng Tay - Chief Editor, Asia-Pacific Region

Chief Editor, Asia-Pacific Region Hock Meng Tay is a CAIA holder and is currently taking CFA qualification. He has over 10 years of experience working as research associate in several investment companies.He is an expert in financial analysis and has published research reports in his current role. He obtained his Masters of Business Administration in Integrated Management and Masters of Arts in Economics while serving his internship in Starsource Inc

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