Monday, June 04, 2007

Mobile content is a white lie

I picked up a press release from the UK Informa company, a publishing and research company in the field of telecom. An Informa Telecoms & Media report (their link!) shows UK mobile content market is on the cusp of becoming multi-billion dollar industry (beautiful word: cusp). However you will not get excited jJust reading the press release and comparing it with a European report of five years ago.

The report concludes that the UK mobile content and services market is on the verge of becoming a multi-billion dollar industry provided the sector can tap into an addressable market approaching 50% of UK mobile users, a report shows this week. In the study, entitled "UK Mobile Content Survey: What Consumers Want almost 2,000 mobile subscribers in the UK participated.

Results from the survey reveal that the UK mobile content market was worth £661 million in 2006, with 50% of revenues coming from the "mobile cash rich" 25-34 year olds. Those revenues look set to skyrocket should the wireless industry generate a more consistent spending behaviour. This conclusion is based on an analysis of the present usage. In the UK one-fifth of the respondents purchase a minimum of one item of content every three months; the report calls this a regular buyer. The survey uncovers a further 30 percent of occasional consumers that will purchase at least one item of content per year. They are called occasional spenders. If the wireless industry can encourage these occasional spenders to regularly consume content, the addressable mobile-content-market spend over a three-month period will expand by 150%

Almost 50 percent of respondents said mobile content prices were too high, but that they were willing to spend 5 GBP as the optimum figure consumers are willing to spend per month on top of their voice and messaging fees. Services and content priced above the 5 GBP monthly threshold will appeal to less than 5 percent of UK mobile users.

The report also indicates that TV on mobiles could cannibalise revenues from other services within the mobile content ecosystem, mobile advertising might subsidise mobile content and inflate the mobile content user base. Besides, side-loading music and ringtones on a mobile from a PC will not help either.

It is clear that mobile Internet has grown from a slow and clumsy monochrome experience into a tool for news, entertainment and other services on the move, in colour, with movies and photographs and graphics. But the mobile industry has been slow to eliminate the financial and technical barriers and will have to come up with smart pricing, incentive technical solutions and innovative partnerships.

Is this report valuable for the UK mobile content industry or the European mobile content industry? It basically tells the mobile content industry and operators that they still have a long way to go to convince consumers and business people to use mobile content services. It tells the operators that they should stop introducing the next fabulous thing such as TV on your mobile and first spend time on introducing teletext like services, followed by internet like services. And think about mobile TV whenever they have solved the technical problems and business propositions.

So far mobile content services have been a white lie. For years the services figured as much promising services. In 2002 the EC published a special report about mobile content. This study was carried out between May 2001 and December 2001. Thirty-three interviews with market players were performed. The results were validated by a Steering Committee of 12 members covering a large part of the mobile content industry. Basic conclusion: News, services and entertainment delivered to our mobile phones could be the next big thing, but only if all the partners in an increasingly complex business can find ways to co-operate. Mobile services will only become popular if the companies responsible for content can make enough money to be able to do their jobs well. But a key problem, says this report prepared by Arthur Andersen Belgium for the European Commission's Information Society DG, is that European mobile network operators are being greedy. Desperate to recoup the huge sums spent on licences and technology for next-generation services such as GPRS and UMTS, they are reluctant to pay realistic rates to the companies whose job it is to provide content such as news, games and transport information. With little high-quality content to attract users, it is not surprising that mobile information services are proving unpopular.

It looks like nothing has changed in the mobile content industry except technology.

Blog Posting Number: 774

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