2019 Preview: Video to grow into a key part of operators' strategies

Netflix remote control image
Streaming services continue to generate significant web traffic. (Pixabay/Creative Commons CC0)

Editor’s Note: This article is part of our 2019 Preview feature, which looks at the big topics facing the industry next year. Click here for the 2019 preview in the wireless industry, click here for the 2019 preview in the video industry and click here for the 2019 preview in the wireline industry.

It’s no secret that video accounts for the bulk of wireless traffic. Indeed, Cisco recently reported that, globally, IP video traffic will account for 82% of all IP traffic by 2022, up from 75% in 2017.

“As in the case of mobile networks, video devices can have a multiplier effect on traffic. An internet-enabled HD television that draws 2 hours of content per day from the internet would generate as much internet traffic as an entire household today. With the growth of video viewing on smartphones and tablets, traffic from these devices is growing as a percentage of total internet traffic,” Cisco wrote.

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As a result, virtually all of the nation’s mobile network operators have taken steps to address the video volumes on their networks. For example, AT&T’s StreamSaver technology scales down video to 480p on the operator’s mobile network; other providers employ similar techniques.

However, it became clear in 2018 that video is not just an obstacle that operators want to overcome. Instead, video is now a key element in many operators’ long-term strategies.

AT&T remains the best example of this trend: The operator has acquired both DirecTV and Time Warner to create a massive media business that stretches from streaming services like HBO Now to DirecTV Now. The operator’s stated goal is to form direct-to-consumer relationships through the sale of mobile services, video offerings and other telecom or media products and then to expand those relationships via the inclusion of additional features and services.

But AT&T isn’t alone. Sprint, for example, continues to package Hulu services with its mobile service plans. And T-Mobile is doing the same with Netflix, and has hinted at an expansion of its video ambitions through its acquisition of Layer3 TV.

Thus, in 2019 the stage is set for a number of major mobile service providers to expand their video strategies—an effort that will likely dovetail with their respective 5G network build-outs. After all, 5G technology boasts the capacity and speeds necessary for the transmission of high-end video content.

One notable exception to this trend, though, is Verizon. The operator had clearly expressed its video ambitions through its acquisitions of AOL and Yahoo, as well as through the launch of its Go90 video service. However, Verizon has been withdrawing from that space in recent months, having shuttered Go90 and taken major writedowns on its AOL and Yahoo acquisitions.

Now, Verizon has said it will stay laser-focused on launching 5G while potentially outsourcing video services to the likes of Apple and Google, as it has done with its 5G Home service.