Written by Harry Wang, Director, Health & Mobile Product Research

Two separate pieces of news over the last 24 hours caught my attention. Yesterday, Verizon settled its long-time patent disputes with Tivo and ActiveVideo, respectively, paving the way for the service provider giant to offer streaming video services with Coinstar’s Redbox division. The upcoming service, presumably offered via either a Web browser on PC or an app on mobile platforms, will be a big challenge to the dominant Netflix/Amazon services and will be watched keenly by industry observers like us.

This morning, news had it that Barnes and Noble is launching its own video streaming and downloading service via its Nook platform. Though the service will not offer unlimited streaming for one price like Netflix does, it nonetheless shows that the incumbent book seller has adopted a more diversified digital content strategy banking heavily on its Nook mobile platform. Compared with unlimited streaming, a la carte download and rental rights are much easier to negotiate with content providers. But on the other hand, downloads and rentals are not sufficient to make the Nook a compelling video device. The question becomes when B & N will offer streaming subscription service. It is perhaps more a financial question than a strategic question as cash-strapped B & N is facing the same challenge Netflix is confronting: steep licensing costs.

We at Parks Associates have watched closely how the mobile video market will evolve. The upcoming Evolution of Mobile Content Market report will shed our thoughts on this market segment.