The Mobile Content Market - Moving Into An Off-Portal Eco-System

Mobile Content Market - 30,000 ft. View 

Communication, entertainment, information… consumer interest in using mobile phones has amazingly grown worldwide over the past few years. Mobile Content, the fast growing market in mobile, is expected to grow from $18bn in 2005 (Informa Telecoms & Media, July 2006) to $42.8bn in 2010:

• Music - $11.4bn
• Mobile Games - $11.2bn
• Gambling - $7.6bn
• Adult Content - $2.3bn
• WAP Browsing, Infotainment, dating and other applications - rest of market

The mobile industry lead by the mobile operators has spent a lot of $$ to encourage growth of the mobile content market. By establishing the first content-based services, operators put the cornerstone and made content available to their subscribers through their own web portals both for the web and mobile.

all rights reserved to John Puterbaugh, Nellymoser Inc.

[Figure 1]

Initiating the first content-based services has positioned operators as the storefront of the mobile content stores, offering a wide offering (see figure 2 and 3).

[Figure 2]

all rights reserved to John Puterbaugh, Nellymoser Inc.

[Figure 3 ]

Operator portals have been important for being the first milestone, however they have provided limited opportunities. Operators maintain a wide portfolio of mobile products and services while maintaining a reach portal is too demanding for most. This has led to a gradual opening of the market to many more players who share the load (and profits).

The Off-Portal Eco-System

Thanks to this process operators have witnessed that content providers ultimately sustain consumer interest by providing a large variety of compelling content, being constantly updated with the newest hits. Today, the appetite among content providers to leverage the mobile outlet is higher than ever, seeing each month new content brands entering the mobile market. Just as in the early days of the Web, when users initially experienced the online world through a web portal before exploring out to find what they seek, we are now starting to see increasingly wide browsing behavior amongst mobile users.

This consumer activity is increasingly channeled outside of the operator portal. These two channels to market - through an operator portal, or directly to the consumer by the brand itself - are complementary drivers to the total growth in mobile data usage. In most of the off-portal services, the operator is still part of the billing process, providing a simple payment experience. The differences are that the operator does not promote the service in its own portal, and the marketing is managed by the content provider.

The most popular discovery method for off-portal services is the common short codes which enable users to interact using SMS as an entry point into content/services provided by parties other than operators. Phone users then are charged directly to their mobile phone bill. The main services powered by common short codes today are ringtones, wallpapers, games, news alerts and voting applications.
Today, common short codes are the only ubiquitous cross-operator method of marketing off-portal content, being available to all mobile subscribers.

Off-Portal: Everybody Wins

The off-portal channel to market is very attractive; it brings more brands and services into the mobile market, providing wider choice and usage opportunities for mobile users. It also provides a route into the market for more specialized content providers that cannot access the market through operator portals.

Brands of all sizes can invest marketing dollars into campaigns with a single call-to-action that works for practically all mobile users using short codes. They can also leverage their websites traffic to generate mobile usage. And most important for consumer brands, it enables them to clearly differentiate from their competitors through creative marketing.Operators on their behalf, enjoy a growing income from SMS and data traffic with 0 cost of marketing since content providers take care of the marketing to the end consumers. And consumers, from their point of view, enjoy the same mobile services across multiple operator networks.

The off-portal mobile content market is a vital part of the mobile data market. The marketing benefit – reaching mobile users everywhere, regardless of their network, is a strong driver for brands to route their marketing efforts to the off-portal channel and to incorporate mobile services to their marketing campaigns.

*Figure 1 and 3 were used with the curtsey of John Puterbaugh from Nellymoser Inc.

Comments

[Ricky]

Xen, I just got around to reading this in full (I skimmed it earlier, promise!) and really enjoyed it. I personally feel that the off-portal market is going to explode, specially here in the 'States, as more and more users discover (ala iPhone) that there's good things to having an unbranded phone, and some carriers make it difficult or impossible to use off-portals.

[Scott]

An excellent article. It's one of the best I've seen on the subject, especially for those who are not directly involved in the industry.

However, there was one observation made (see below) that I think could benefit from a different point of view:

"Today, common short codes are the only ubiquitous cross-operator method of marketing off-portal content, being available to all mobile subscribers."

That point of view is more thoroughly outlined in an article I wrote on the benefits, use and utility of numeric-domains and their place in the mobile ecosystem. They are also "available to all mobile subscribers". If you have a chance, I would appreciate your thoughts and or comments. (link truncated) It's in the June 12, 2007 edition of TechNewsWorld.com and titled "The Rise of Numeric-Domains"

http://www.technewsworld.com/story

I would appreciate any commentsor feedback.

Keep up the great work.

Cheers,
Scott

[shl]

I decided to blog about your blog entry ;-)

http://wirelessdispatch.blogspot.com/2007/08/comments-on-another-bloggers-entry.html

[Xen]

Hi Shl,

Sorry for the late response…. First – great post :)

Second, I’m sorry that you think that the point I us trying to make is a fluff… For us (at the mobile content industry) this is the current state of the market.

Content providers have more marketing resources to promote content offerings than operators do; thanks to the off-portal eco-system, content providers can offer bigger amounts of new and updated content like music and gaming while consumer brands can sell their mobile offering at their own premises. True, operators still gain more than other players at the content value chain. This will probably change as alternative billing methods will enter the market.

Another point to bear in mind is the openness to 3rd parties the off-portal eco system enables; for example, in the on-portal arena, aggregators are left out of the game empty handed…

[Frances]

What an informative post.
I maintain several blogs, and just added a mobile one - I am really enjoying the experience.
I found the Carnival today - looks like it's going to be Mobilist 101 Saturday for me.
Take care,
Frances

[Frances]

What an informative post.
I maintain several blogs, and just added a mobile one - I am really enjoying the experience.
I found the Carnival today - looks like it's going to be Mobilist 101 Saturday for me.
Take care,
Frances

[Frances]

What an informative post.
I maintain several blogs, and just added a mobile one - I am really enjoying the experience.
I found the Carnival today - looks like it's going to be Mobilist 101 Saturday for me.
Take care,
Frances

[Xen]

Hi guys, thank you for your comments! :)

[Paul Ruppert]

Xen,
Great coverage of the dynamics behind the content market and its segmentation. Only observation is you could have included those who "sell the shovels to the farmers." Meaning you've addressed why the big players are mining this market, but there are adjacent opportunities to be exploited as well, without having to be a carrier, enabler or content provider. Specifically companies like Vantrix out of Canada and Mobixell in Israel are two that I know of that provide services in porting, transcoding and rendering to ensure the content and actionable apps, e.g., C2P (click to pay) actually work. Others in this space includeAplio, Uturn, Polycom and 3ple. Crowded space means an identified opportunity! Nonetheless thanks for the great overview.
Paul