Revenue from mobile video services – such as video messaging, sharing, chat and on-demand downloads – is expected to top $2 billion worldwide in 2013, according to a new report from ABI Research.

Although revenue is expected to be only $121 million this year, the availability of faster networks and the growing demand for mobile “info-tainment” are putting mobile video on the fast-track for exponential growth.

“The growth curve is very steep indeed and will only continue to accelerate through the end of our forecast period in 2015,” said ABI Research senior analyst Mark Beccue.

Video sharing will be a small portion of this revenue, while video telephony (chat), video messaging and video-on-demand will account for the majority. These components will largely grow as mobile network operators shift from 3G to more-advanced 4G networks, Beccue told TechNewsDaily.

“As more subscribers look to 4G networks for a faster, cleaner user experience, mobile operators will look for ways to optimize this new network and take advantage of what it has to offer,” Beccue said. “Inevitably, the smartphones will get smarter and so will other devices, such as netbooks and e-tablets.”

The coming 4G world

Clearwire, a provider of wireless broadband services, is currently the only 4G operator on the U.S. market right now, and its services are being made available through Sprint.

“3G networks are great for mobile video streaming, but the whole user-experience improves considerably on 4G, especially when it comes to speed,” said Mike DiGioia, a spokesman from Clearwire.

Clearwire is gearing up to debut in the next year its first two namesake mobile devices that will operate on the 4G network. Sprint also plans to launch another device that will run on Clearwire's 4G in the near future, DiGioia confirmed.

Sprint’s EVO 4G was the first smartphone in June to hit market to offer 4G capabilities, touting live video chat and an HDMI port for outputting video to a projector or television. Meanwhile, Droid X then debuted offering an HDMI output, along with the ability to support Adobe Flash and stream HD movies from Blockbuster On Demand. Droid X, however, still operates on a 3G network.

However, according to reports, Verizon is close to launching its own 4G network running LTE (Long Term Evolution) technology that will be available for the holiday season. It is expected to launch in mid-November. The first devices to run on its 4G network will be wireless cards for connecting laptops to the Internet. Mobile devices will soon follow.

On-the-go video

Looking ahead, mobile operators are already talking about offering video-on-demand menus that will allow users to purchase videos directly on their phone that can be billed directly to their existing mobile accounts.

“This will resonate with consumers because they won’t have to buy a separate subscription from another video site when buying content. It will be an easier one-stop shop,” ABI Research's Beccue said.

However, the study found that there are a few components that could limit the billion-dollar growth of mobile video services. The down economy could affect consumer buying behaviors, for example, and the popularity and adoption of services such as Hulu provide intense competition for mobile network operated video services. In addition, since the industry is still in its infancy, the business models are still maturing.

“With any new technology, it will take some time for consumers to switch to 4G,” DiGioia said. “We’re already seen a great response from who have already experienced it and we know it’s poised to take mobile video services far.”