The US mobile content market is going off-portal if this panel is to be believed..."Three years ago coming to the US was like stepping back in time…that isn’t the case any more. All the major carriers have opened up,” said Alex Moir, CEO of MX Telecom. Interestingly, Grahame Riddell (Head of Mobile Content at O2) disagreed with the idea that the UK is a massively off-portal market..."I don’t think there’s that big a gulf between the US and UK.” He said that O2 was partnering with Disney in the UK, offering Disney content while Disney offered a dedicated service (it sounded like he was talking about an MVNO, but he didn’t use that word).
Which moved neatly to MVNOs, where Mark Young, Head of Business Development and Strategy at Disney Mobile, had some complaints about Disney’s treatment..."For us it’s not just looking at it from one vertical. What we’re looking at in America, particularly from wall street is a quick way to build people up and push them down. We think this is a marathon rather than a sprint.” Dominick Tolli, VP of VAS at Virgin Mobile, said MVNOs are “a game of scale” and a lot of small MVNOs with only a few hundred thousand customers each isn’t sustainable—which I agree with from a pure MVNO-brand service such as Virgin, but if the MVNO is an extension of another brand or service so that there is very little advertising and customer acquisition costs and a high level of customer loyalty I think it’s fine. He took a dig at Amp’d on the way..."If you just put a handset on the internet no-ones going to buy it. You need retail distribution.” Amp’d has that now of course, through Best Buy.
Mark explained what he saw as the difficulties in the MVNO business. “Why is it so hard to get into the MVNO business and stay in it? It’s a capital intensive business, there’s not a lot of virtualness about it...You need to have a seamless experience, and that comes down to your handsets and the network infrastructure.” He said the industry had to take a good hard look at the level of subsidies it gives to handsets, and should be more careful. To which the obvious response is “You tried unsubsidized handsets with ESPN, and it crashed and burned”.
Hot or Not
The moderator also asked what content was hot and what was overhyped, and pretty much everyone on the panel said that mobile video/TV was overhyped. “Bullishly I’d like to see TV take off,” said Mark. “But I also think we got ahead of ourselves a little bit, I think it’s a quality issue, that iPod did a better job of (delivering the quality content).”
Anil Malhotra, SVP at Bango, said user generated content was hot, especially “based around passion centers that users have already, music and sport”. Music labels are now promoting individual artists sites rather than a music store, so people get everything attached to one band. “The industry is really keeping up with the capabilities that mobile is offering.”
Alex said personalization stuff on mobile (ringtones, wallpapers etc) was still the big seller, and Mark said that Disney was particularly excited about themes. Grahame said there was particular interest in video traffic, with an O2 promotion for free video generating 1.5 million downloads (yes, but will they pay?). He said TV was dead in the water until DVB-H gets launched.
Games—The Forgotten Older Brother
Mobile games came up, and everyone seemed pretty positive about the market. “Games have consistently performed well over many years, that and ringtones have been the mainstay of the mobile data over the past few years,” said Grahame. He said that music and TV was taking the shine off that, but mobile games are still selling very well. “I think multiplayer games will come over time, I think there is still a huge opportunity for people just taking time out to play games.”
Don said the big thing for Virgin is building communities around the mobile games.
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