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.
All of the research shows that mobile content is going to be massive in the next five years. Screen Digest estimated the value of this content to be £5.46bn a year by 2011. A 2006 Gartner Survey estimated that mobile content would be worth a less conservative $78 billion within 5 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?
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The growth in mobile content will be driven by improvements in technology 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, or video player and PDA is becoming seamless.
At the same time, the 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 to 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 wider use than PC-based internet access or television. As such, it has the potential to 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 direct to the consumer via a platform such as immedia24.
Distributors will generally work with operator portals, such as 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.
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.
Whilst 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 will 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 altering 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 both the handsets themselves and the route to delivery. Whilst screen resolution, memory, and functionality have improved on many handsets; usability can still be poor. The I-phone for example, has been plagued with problems – everything from the battery life to high data charges. In the UK, the I-phone 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, user experience has been 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 resulted in many mobile users steering well 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.
A variety of variousness, screen sizes, and screen ratios make the delivery of 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 very long time.
Low Premium Rate SMS Payouts
Whilst Premium SMS (PSMS) offers some great opportunities for both micro billing and non-credit card billing systems, the payouts offered by the networks 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.
It means that the content provider can be forced to charge considerably more for mobile content than when it is delivered through credit card billing on a website.
With all these drawbacks, you may be thinking that there is little point in pursuing the Mobile Goldmine. However, the potential of the mobile content market clearly exists. As with any new information technology, the issue is to ensure that the user’s needs are understood and clearly met.
The convergence argument suggests that as we adopt more iPhone-style handsets, the line between mobile and web will disappear. Simply put, there is no need for developers 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. Inevitably small screen sizes and keypads will always create a different experience for the user. If I look at my own mobile internet usage, I will acknowledge an email but not write a lengthy reply. Whilst 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 to understand the relationship between a user and the technology. For example, we relate to our TV quite differently from our PC and the web, even though the technologies are similar these days.
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 all of the time. We have seen this in our studies with teenage mobile users, where their phone is now more significant to their peers than the clothes or the 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 user’s needs. The first key to success is good usability. It is estimated that the provider will 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. In some areas, such as music or sport, it is quite straightforward to engage at this level. 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 in itself 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 in the same way.
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.