The Mobile Goldmine?

The predictions are that mobile content – pictures, audio, video, and games – will be a massive market within the next few years. What are the opportunities and threats for developers of that content? Mark Brill from Ping Corporation Ltd looks at the issues for mobile content and what the future may hold.

The Opportunities

The research shows that mobile content will be massive in the next five years. Screen Digest estimated the value of this content to be £5.46 billion a year by 2011. A 2006 Gartner Survey estimated that mobile content would be worth a less conservative $78 billion within five years.

We have already seen a ‘first wave’ of mobile content, largely dominated by ringtones and backgrounds. However, the predicted ‘second wave’ of mobile content is almost upon us, and it is expected to generate greater revenues with a longer lifespan than the first wave.

What will bring about this second wave?


The growth in mobile content will be driven by technological improvements, such as higher resolution screens, better software, and improved data connections, such as 3G. Handset technology is converging with internet technologies by introducing the iPhone and the impending Google Phone. The line between phone, music, video player, and PDA is becoming seamless.

At the same time, mobile phone operators are reviewing their pricing policies for data. Until recently, the cost of downloading was a few pounds per megabyte. This was a major barrier to downloading content. Most of the operators in the UK are now offering a flat rate for data, following a similar model to home broadband.

Premium SMS offers a simple revenue model, allowing micropayments to be taken quickly. Identifying a phone number through SMS allows easy user and age verification with content restriction for unregistered phones. The growth of 3rd party developers will continue. Many industry observers regard D2C (direct-to-consumer) as the most likely area to succeed with engaging content and the best user experience.

With over 3 billion phones worldwide, mobile technology is used more widely than PC-based internet access or television. As such, it can potentially become an enormously powerful tool for selling and distributing content. A goldmine for mobile content providers.

Selling onto mobile

Typically, the route to market is as follows:

* Content is created – pictures, video, or audio

* The content provider sells through a distributor – such as Player-X, or directly to the consumer via a platform, such as immedia24.

Distributors generally work with operator portals like Vodafone Live or T-Mobile’s T-Zones. This is always operated on a revenue share – the content is not bought outright, but the revenue from Premium SMS is shared between the portal, distributor, and content developer.

A D2C platform, such as immedia24, offers considerably more control over the content and a larger revenue share. Potentially, it has a higher audience than the operator portal simply because many operators insist on exclusivity for content. The disadvantage is that there is no existing mobile customer base. D2C works well with an audience through the web or other media or an advertising budget to see the content.

The Threats

Despite some great opportunities, there are still many problems with creating and delivering mobile content. Mobile Internet is accessed by only 23% of mobile users in the UK. Although it is still a considerable market at over 15m people, it is not as ubiquitous as SMS.

While many people can create great mobile content, the route to delivery is problematic. The mobile operators have generally regarded themselves as the key mobile content providers, assuming that most people want to download through their portals. However, it has been shown that mobile users do not regard their operators as trustworthy content providers. Operator Interference: The operators have tried to restrict 3rd party content in many ways. Unlike an internet service provider, the mobile operators’ online connections are made via their portals. Not only do they restrict which sites can be accessed, but they often alter the content itself. Ostensibly, this has been under the guise of formatting the content for mobile. However, there are examples of operators changing the display of 3rd party sites to remove much of the functionality and ruin the user experience.

Poor User Experience

The problems with poor user experience also relate to the handsets themselves and the route to delivery. While screen resolution, memory, and functionality have improved on many handsets, usability can still be poor. The iPhone, for example, has been plagued with problems – everything from the battery life to high data charges. In the UK, the iPhone will be locked to the O2 network. So, if you want to change networks, you will be left with a £400 brick!

At the point of download, the user experience was equally poor. For example, 3g in the UK is not as fast as broadband and is not always available. Poor pricing policies have compounded these problems. High-profile Premium Rate rip-offs combined with confusing charges have made many mobile users steer clear of anything that may involve a premium rate SMS for downloading. Although flat-rate data pricing is commonplace in the UK, the charges for accessing data abroad are still over £7 per megabyte.


Various variousness, screen sizes, and screen ratios make delivering pictures, video, and audio somewhat problematic. This is largely a technical issue for developers rather than the content creator. However, the fact that there are few standards in mobile operating systems means that the user will suffer in the end. One poor experience with mobile content can put a user off for a long time.

Low Premium Rate SMS Payouts

While Premium SMS (PSMS) offers great opportunities for micro billing and non-credit card billing systems, the network’s payouts are very low. For a £1.50 PSMS that the user pays (£1.26 after VAT), the operator and aggregator will take over 30p. This figure can be much higher on some networks. This leaves little over 90p for the content provider, creator, or developer.

This means that the content provider can be forced to charge considerably more for mobile content than for content delivered through credit card billing on a website.

The Possibilities

With all these drawbacks, you may think there is little point in pursuing the Mobile Goldmine. However, the potential of the mobile content market exists. As with any new information technology, the issue is ensuring the user’s needs are understood and met.

The convergence argument suggests that the line between mobile and web will disappear as we adopt more iPhone-style handsets. Developers do not need to worry about mobile content specifically, as we will all have the web on our phones.

Looking at the threats outlined above, it is clear that a division will remain between the internet and mobile. Small screen sizes and keypads will always create a different experience for the user. If I look at my mobile internet usage, I will acknowledge an email but not write a lengthy reply. While I may search for a film showing time or check an address on my web-connected phone, I would not use it to book a flight or make a bank transfer. As much as anything else, that is the practical consideration of what it can do with a small keyboard or screen.

Understanding the Technology

The key to accessing the Mobile Goldmine is understanding the relationship between a user and technology. For example, we relate to our TV quite differently from our PC and the web, even though the technologies are similar.

What is the relationship between a user and their phone?

* Primarily, it is for SMS (over 4 billion are sent each month in the UK) and phone calls

* It is a means of storing phone numbers – over 60% of people use their mobile as their main, often their only address book

* It is a means of killing time – playing games or sending messages while waiting for a bus, train, or friend

* The phone is linked to personal identity

This last point is significant. For many people, the phone they own, the ringtone, or the background are all statements about how they see themselves. It is a highly personal item that is with them almost always. We have seen this in our studies with teenage mobile users, whose phones are now more significant to their peers than the clothes or trainers they wear. The Motorola Razor was the best-selling phone two years ago, even though it performed the worst usability tests. It was sleek, flat, and came in bright pink. These factors were more important than the practical considerations.

Thus, the key to successful mobile content is to develop specific content that meets the users’ needs. The first key to success is good usability. The provider is estimated to lose 30% of its potential audience for each additional click required to access the content.

It should then engage the user in a way that supports their identity. Hiring at this level is quite straightforward in some areas, such as music or sports. It may prove harder in sectors such as film or television, requiring more creative skills and ideas. It is also important to view mobile content not as an end but as a tool to enhance the user’s experience across many platforms, such as the web, television, or cinema. There are numerous examples where the web has successfully been used to enhance and support traditional media, and mobile may be used similarly.

Ultimately, the best approach to developing mobile content is not to be driven by the capabilities of the technology but rather to understand the user’s relationship with their phone and produce clever and engaging content.


Alcohol scholar. Bacon fan. Internetaholic. Beer geek. Thinker. Coffee advocate. Reader. Have a strong interest in consulting about teddy bears in Nigeria. Spent 2001-2004 promoting glue in Pensacola, FL. My current pet project is testing the market for salsa in Las Vegas, NV. In 2008 I was getting to know birdhouses worldwide. Spent 2002-2008 buying and selling easy-bake-ovens in Bethesda, MD. Spent 2002-2009 marketing country music in the financial sector.