The digital change – that is, the digitization of information, the generalization of the Internet protocol and the rapid adoption of these technologies (end-user equipment, Broadband infrastructures, etc.) – is transforming the way we produce, we store, distribute and consume goods and services.
The digital change impacted the entire economy, although in a rather irregular way, varying according to economic sectors. The media and content industries – spanning the book, broadcast, film, music, journalism and video game industries – are among the first and most notably affected by digital change. Some significant changes have affected digital media, especially traditional models of production and consumption, and have led to a major restructuring within these sectors, in the context of drastic changes in demand models.
Such transformations are driven by a growing number of participants, including new competitors from other industries (telecommunications and information technologies). The disruptive technologies are challenging the balance and business models of the media and content industries, as well as opening up other opportunities for growth and innovation for all agents, legacy participants, and newcomers.
The growth of the mobile Internet
Last year, there were 3.7 billion single mobile users and 7,529 million SIM connections, a figure slightly higher than the world population of 7,357 million inhabitants. The number of mobile broadband subscribers worldwide reached 2.9 billion. These are impressive numbers, giving a lot of room for growth, especially in developing economies.
Developed markets are near the ‘demographic ceiling’ where subscriber growth tends to stagnate. Europe is 84 percent above this level. Mobile Internet growth will come from emerging markets, with mobile broadband penetration of around 50 percent (48 percent in Southeast Asia, 53 percent in East Asia, 57 percent in South America, etc.) Asian markets have been the main driver of this global growth.
Today, the greatest impact of technology migration towards 3G and 4G is taking place in developing countries. Mobile enabled Asia to make a big leap, catching up with developed countries when it was lagging behind in the deployment of fixed networks. If European markets still lead the world in unique subscriber penetration, with a penetration rate of 79 percent compared to a global average of 49 percent, the region Asia-Pacific accounted for more than 50 percent of mobile connections last year, and it continues to grow. Even, with the presence of 5G, some heavy-weight online adult services like 8K VR Porn can be enjoyed very smoothly.
Smartphones, phablets, and tablets, the new hardware and software platforms
This remarkable growth in results is produced by the increase in the availability and economic accessibility of mobile bandwidth and smartphones, as well as by the changing role of consumers as avid demanding – or even co-creators – of mobile content and applications . Within this scope, traffic growth is being driven mainly by consumers (as opposed to previous industrial models), also active as prosumers.
Growth is first led by the media, with video being its main driver. The fact that smarter devices and updated networks could host video content with much higher bit rates than other types of mobile content generated much of the growth in mobile traffic, when, according to Cisco, it produces the highest growth rate of any mobile application.
In fact, smart devices are much more than phones. They are our main tool to communicate with friends, family and work contacts, to access the Internet, to watch content such as television series and movies, to play games and many other activities. These devices now account for more than 40 percent of the world’s active headsets – headsets connected to an active mobile subscription.
Mobile traffic in the cloud follows a curve similar to that of video. Cloud applications allow mobile users to overcome their memory capacity and process the power limitations of mobile devices. Reliance on cloud computing also increases the demand for the amount of bandwidth. Applications -especially content applications, such as games- contribute decisively to this growth, since more and more people are playing from mobile devices and from the cloud (online games).
The rise of the app economy
Both smartphones and the mobile Internet witnessed the advent of consumer applications. Mobile applications continue to proliferate and it is most likely that they will impact almost all sectors, using smartphones as a factor of change, and that this can be carried out by the deployment of new mobile networks; 3G, 4G, and now 5G.
The development of apps accelerated the growth of an already rapidly expanding market for smartphones. App stores have changed – or rather disrupted – the software value chain (distribution and price) and also the music, book and video game industries, in particular. The largest growth rates in the global mobile ecosystem are predicted to come from applications, content, and advertising, with annual revenue growth expected to be $ 576 billion by the end of 2021. Usage of apps is driving mobile growth.
Along with gaming apps, the success of messaging apps (including social and photo-sharing apps) is having an especially significant impact. Some messaging applications, such as LINE and KakaoTalk, began to evolve on platforms, rather than standalone applications, with the inclusion of game stores and stickers (emoticons).
The rapid deployment of new networks
The rapid deployment of new networks (4G, 5G) is key to the continued growth of applications because it opens development to all kinds of connected devices, including vehicles. The combination of devices and networks opens the way to a faster growth of the ‘Internet of things’, which will generate huge amounts of data.
ICT business actors, regardless of their position of power, are inherently well placed to benefit from this change, to take advantage of new big data analytics and the cloud (Amazon is a leading provider of cloud computing services for third parties with AWS). New digital entrants are also paving the way for the use of data mining to collect recommendations from viewers (Amazon, Netflix, Pandora, Zynga, etc.). The most individualized digital content is directed to specific individual needs that depend on the data.
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