HAMPSHIRE, UK – Annual revenue generated by content delivered to mobile handsets and tablets is expected to increase by nearly $25 billion over the next three years, reaching $65 billion by 2016, according to a report from Juniper Research. Growth will be fuelled primarily by an upsurge in game, video and e-book purchases via tablets, supported by increased availability of direct carrier billing on smartphones.

The report, “Mobile Content Business Models: OTT & Operator Strategy & Forecasts 2013-2017,” observed that e-books currently compose the largest revenue stream on tablets; however, tablets are experiencing a sharp increase in both paid and free video applications. At the same time, consumer gaming spending is expected to migrate to tablets from dedicated portable devices like Nintendo 3DS and Sony PS Vita.

Although Juniper’s analysts expect the primary billing mechanism for online storefronts to remain credit cards and debit cards, mobile app stores like Google Play and BlackBerry App World increasingly will rely on direct carrier billing, with credit cards as a backup.

“While the availability of direct carrier billing is patchy, the various benefits which the mechanism offers — higher conversion rates, opportunities to monetize unbanked customers — suggest deployments will rise significantly in the medium term,” report author Dr. Windsor Holden observed.

Additionally, the report asserts that although music and video currently account for nearly half of all mobile content revenues, increased video traffic may compromise mobile network capacity unless carriers increase the rate at which they are upgrading their infrastructures.