Content Futures

Mobile Entertainment & Commerce
...the analyst view

Edition Thirty - 1st August 2007

Lead Stories
 
 
Dear Industry Executive

From walled gardens to media brand tie ups — the battle to end churn

The off-portal content model was supposed to make it easier for third parties to offer their wares, offering consumers the unlimited choice that they have come to expect from the web and to open up m-commerce to the 90 per cent of companies who currently don’t use the channel.
 
What has happened instead is that network operators — and to some extent, handset makers — have fought the move, doing deals with huge media brands to offer access at the touch of a button to some key content types. And it is paying dividends.
 
YouTube has signed deals with Verizon, Vodafone, LG and Windows Mobile to offer exlcusive access to the online TV content that has taken the web by storm. Now the iPhone comes with a dedicated YouTube ‘button’. Others are looking to add Google buttons too. And with Google’s moves in to content and advertising ranking widely tipped (see lead story this week), it looks like big mobile brands are hoping that large media brands can help them reduce churn and perhaps even pull in new customers.
 
Walled gardens hampered competition, but this new regime of relying on brands tied to particular operators (or handsets) means that the consumer once again looses out to the power of the operator. I like YouTube, but I am not going to switch to Vodafone to get it. That’s not fair. I shall simply go without.
 
The youth market may well be more fickle about their loyalties, but the tie up between operators and media brands could well be as counter productive to the industry as the walled garden once was. It could also rapidly come to be seen as disadvantageous by the media brands when competition for eyeballs — and the resulting ad revenue — become fierce in 18 months time. 
 
Yours
 
 

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Google to commercialise mobile search…

Internet search and advertising giant Google is poised to roll out a mobile version of its AdSense software that will allow it to not only offer a mobile search facility, but also to sell priority listing to companies with content to sell via mobile.
 
The move could make Google a gateway to content sales and demonstrates that the company believes that there are now enough commercial mobile websites out there to justify looking at monetizing the mobile search experience.
 
The company is already deep in to testing ad brokering using a mobile version of AdSense in the US and the plan to add content site brokering would be a significant step forward for the mobile content space, offering search results on mobile that are specific to mobile content that is for sale.
However, Google faces problems from regulators and network operators — especially in the US — that deter internet companies getting to involved in the mobile content market.
 
The move is the next chapter in the burgeoning realm of the mobile advertising space. Already this year, AOL has bough Third Screen Media in an attempt to bolster its mobile ad presence and Yahoo! has signed a deal with Vodafone in the UK to serve banner ads to Voda users for large blue chips such as Ford.
 
Commenting on the rumour, Mark Len, senior consultant at Alpheus, a consultancy to mobile operators, said: “The big incentive for Google must be the potential advertising revenue that this space will generate. The current setup of content search will directly benefit the operators through content sales and advertising revenues.
 
Google is entering the space at a time when mobile operators are expanding access to available content in off-portal areas such as Vodafone with YouTube. This will allow Google to offer competing off-portal search services and gain advertising revenues. They already have a proven model using Adwords in the Internet space.”
 
 

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…while industry forum dispels mobile advertising hype

Following hot on the heals of the rumours that Google is to do for mobile search and advertising what it has done for online, mobile industry experts have decided that mobile advertising isn’t al hype, but is ready to ‘go large’.
Participants at a forum on mobile advertising, organised by SurfKitchen, agreed that while the mobile advertising industry is in its early stage of development, operators and advertisers recognise its potential and are prepared to face the challenges. The forum, held in London last week, brought together participants from across the mobile advertising spectrum, including network operators, technology vendors and representatives from the advertising industry.
 
“Although we are at the beginning of what is likely to be a long journey towards realising mobile advertising, the forum allowed us to discover some interesting facts and viewpoints from all involved in the mobile advertising space,” said Ben Wood, director, CCS Insight.
 
“One key insight that emerged is that while privacy is essential to the vast majority of consumers, those in the 18 to 24 year age bracket are more likely to provide personal data to obtain advertising-funded mobile services than users from any other demographic,” added Wood.
The drivers behind mobile advertising, its revenue potential and possible entry barriers were three themes central to the debate. Consensus was reached on the main driver for mobile advertising, with participants believing that growing interest can be attributed to a decline in the effectiveness of traditional mediums.
 
Opinions were more varied on its revenue potential, with marketing representatives advising that it currently fails to command a separate budget. The discussion around barriers to entry highlighted the attendees’ different perspectives, with mobile operators stressing that brand protection is still the number one priority.
 
“If the mobile and media industries are to capitalise on the relationship  users have with their mobile devices, they must keep protecting the user experience front of mind and consider the impact that different types of mobile advertising will have on how users relate to their phones,” cautioned Michel Quazza, chief executive officer, SurfKitchen.
 

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Mobile payments to top $22bn a year finds report

Juniper Research predicts that P2P fund transfers and mobile payments in the developing world, together with the commercialisation in 2009 of NFC (Near Field Communications) based m-payments will generate transactions worth approximately $22 billion.
 
There is much to be positive about with mPayments, says the research company; the ecosystem is evolving into one where cooperation between the major stakeholders is creating an atmosphere that is incubating intelligent ways in which we can use the mobile phone for payment.
 
There is still much to do, resolving the business model and the revenue share issues are a priority; but much of the technology is available and there is a genuine willingness from the major stakeholders to resolve their differences and cooperate.
 
Greater availability of NFC devices, for physical mobile payments, coupled with secure and easy-to-use applications, backed by the large credit card organisations and financial institutions, will create the foundation for a healthy alternative to cash and other mainstream payment applications.
 
Report author Alan Goode says that: "The technology is available now to enable secure and fast payments to be initiated on the mobile phone. The business model stills needs some work but there are positive signals emanating  from the industry  that will create considerable revenue for all parts of the ecosystem. I am cautiously optimistic for the future success of mPayments."
 
 
 

William Hill goes live with mobile betting site

William Hill, one of the world’s leading betting companies, has gone live with its long awaited first revenue-generating mobile betting site. Built around MobileAware technology, the solution enables William Hill to deliver a wide variety of feature rich mobile services, including live sports results, live betting events, bet-in-running, commentary, arcade and a ‘My Account’ facility, to more than 400,000 active account holders. Customers can use their existing William Hill accounts to securely access mobile betting services 24x7 from any mobile device, across any mobile network.
 
As William Hill’s core strategy is based on making betting as convenient as possible, MobileAware provided a mobile solution that offers customers fast, intuitive and secure access to a wide range of betting services from their mobile device. MobileAware’s technology seamlessly integrates with William Hill’s online Sportsbook and extends it to thousands of mobile devices, including phones, PDAs and digital TV.
 
It provides the device recognition and content rendering functionality, automatically detecting the device being used and fully optimizing the content for the device to ensure that customers receive the latest betting information in the most appropriate form.
 
“Mobile gaming provides our customers with the flexibility and convenience to check odds and place bets right up until the last minute from any location, at any time,” says Richard Woodworth, Business Development Manager, William Hill. “Expanding William Hill's multi-channel betting offerings is key to the company's future growth strategy; we are already witnessing an excellent return from the mobile channel in terms of channel uptake and increased revenues.”
 
According to analyst firm Juniper Research, the market for all forms of mobile gambling will grow from $1.35 billion in 2006 to $16.6 billion by 2011. William Hill is now excellently positioned to take advantage of this compelling market opportunity.
 
 
 

Live Thai rock concert over 2.5G proves mobile TV can be mass market

Thailand’s  'Be My Guest' rock concert, staged on Saturday 14 July at the Bangkok Hall in Thailand has become the first event to be streamed live over 2.5G to more than 15,000 mobile users, proving that mobile TV services can be delivered to the mainstream.
The event saw four hours of live streaming take place on Thailand’s AIS network following a deal with ROK TV services.
Commenting on the breakthrough, Jonathan Kendrick, Chairman of ROK said "Live events have been streamed over 3G networks before but never over 2.5G via GPRS so we are delighted to have successfully set the tone - and the model - for this brand new mass-market mobile entertainment service, going forward".
 
In order to prevent any possible GPRS bandwidth capacity problems, AIS restricted the number of viewers able to access the stream at any one time to 4,000 people. Existing subscribers to ROK TV on AIS were asked to bid, via SMS, for an access code to watch the concert for free. 
 
Interestingly, the concert was staged during a torrential rainstorm in Bangkok which disabled satellite TV for many people, yet the ROK TV stream over GPRS remained unaffected.
 
"We shall be replicating and building-upon this initial success with AIS with more of our partner mobile operators worldwide and we're looking now for more key individual events to film and stream to mobile phones" added Kendrick. " After all, there are more screens on mobile phones worldwide than all the TV sets, all the computer screens and all the cinema screens combined, so we see streaming of live events to mobiles over existing 2.5G mobile networks as a major new media channel of the future."
 
 

India’s leading service provider deploys voice SMS

Leading Indian service provider Airtel is to deploy Bubble Motion’s BubbleTALK’s pioneering voice SMS services — where the caller can send a voice message to another phone user using SMS. The deal will also see the service extended to sending voice SMS to fixed lines also, says the carrier.
Voice SMS is a phenomenon which has gained a great deal of traction in recent months as more and more service providers deploy the service worldwide.
 
The ability to include more emotional content in a short message than other messaging services such as IM, SMS and email, has made voice SMS messaging a popular channel amongst the youth market. Voice SMS has also proven very popular with many groups who find SMS inconvenient, as well as those whose first language is not supported by text entry on a phone keypad.
 
Sunil Coushik, President and Co-Founder of Bubble Motion says “Airtel has become the number one service provider in India on the back of service innovations, which have successfully captured the imagination of India’s wired and wireless customers,” says Sunil Coushik, president and co-founder of Bubble Motion. “By deploying the best Voice SMS solution on the market, Airtel is staying one step ahead of its competition.”
 

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Make the greatest, most effective investment in yourself and your company by being part of the most highly-regarded event in the mobile industry, the GSMA Mobile Asia Congress.
 
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Marketplace

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Wapple launches ad-funded mobile website creation, hosting and delivery
 
With a mobile internet presence fast becoming essential for any brand or organisation, Wapple is now offering a totally free way to design, host and manage a mobile website.  The sites are funded by the inclusion of relevant, targeted third-party banner advertising that Wapple delivers through mobile advertising companies AdMob, Admoda and Millennial Media.
 
"The Wapple ad-funded model not only removes all the barriers to creating an essential mobile presence by making it quick, easy and free, it also allows anyone to create a highly functional, professional, mobile-search ready site that looks good and actually works properly on some 5,000 mobile devices including PDAs, the Sony PSP and new iPhone," said Rich Holdsworth, CTO at Wapple."
 
For more information please visit www.wapple.net
 
 
Broca Communications and Vodafone sign Reseller Agreement
 
Broca, announces that Vodafone Group plc, following an extensive evaluation process, has signed an agreement to act as a reseller for Broca’s Secure Advanced Message Service (“SAMS”).
 
Broca’s flagship service, SAMS, is a unique and patented technology that encrypts and enhances traditional SMS messages, allowing sensitive data and content, such as card payment details, to be sent securely via the mobile network.  Positioned as a new communications protocol, this enabling technology is set to open up significant opportunities for the global mobile industry.
 
Ian Price, Managing Director of Broca commented;  “We are delighted to have secured Vodafone, one of the world’s largest network operators, as a partner.  This is a major achievement and an excellent addition to our community of partners. 
 
For more information, please visit: www.brocaplc.com 
 

 
 
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Providing an in depth analysis of the payment and mobile industries current and future strategies, the Mobile Payments: Strategies and Markets report projects the most comprehensive regional market data obtainable to date.
 
With a detailed forecasting suite predicting changes in the market until 2011, this report provides the complete analysis of the opportunities available for mobile operators, credit card networks, banks, vendors, handset manufacturers, chip manufacturers and hardware providers.
 
For more information and for the new whitepaper 'Paying by Mobile' please visit the website 
 
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