Yankee Group Predicts the Time for Video Will Come
By Eric Lin, Wed Mar 03 23:30:00 GMT 2004

Despite little interest and incomplete technology, a new study from the Yankee Group believes that video will still be big after the technology catches up and the idea catches on in a year or two.

Often we ignore reports that predict a market will take off and be worth x billions of Euros / Dollars in a few years, because they tend to be wildly optimistic, and often ignore influencing factors. The Yankee Group report, detailed in 3G Newsroom, refreshingly put quite a bit of research and thought into their report's influencing factors. They understand that few users are interested in video services and even fewer have handsets capable of video calls or streaming playback.

However the Yankee Group points out that two factors blocking video uptake now are not unconquerable barriers. First 3G networks and accompanying video friendly handsets have to enter the market in significant numbers. With the new handsets expected to make their way onto new European 3G networks this year, hardware should not be a problem for much longer. The second is the need for a video calling meme. Thus far the networks have concentrated on video downloads, which fail to involve subscribers since they offer no way to interact or create content- a factor apparently critical for phone feature success. However once enough people have video-capable handsets, the youth will start video calling or video messaging each other, which will eventually lead to mainstream adoption of video content- not consumption but creation and sharing.

The study recommends that carriers keep their cards close when it comes to video services, waiting for 3G networks to be completed before advertising the services, and even then, not pushing them too much. Once the network and hardware is ready, video will be adopted along with other new features. But if carrier and manufacturers play their cards right, the Yankee Group believes video could be worth Eur 4 billion by 2007, or about 6% of the data market. Should carriers and manufacturers follow the study's advice, it would take a minimum of investment to yield a fairly healthy profit from video telephony if the Yankee Group is accurate.