Xellular Identity - All About Mobile Content & Marketing

Carnival of Mobilists at Route 79

Better late than never... Carnival no. 79 is hostes at Jag's Route 79 blog. Jag had done a great job hosting and even making this cool clip of his 16 mobile phones of the last 10 years! :)

You Asked, We Answered

Today we have a an interview with Comverse Fun Dial marketing experts, Audelia Boker and Inbal Rosenberg, and Scott Manthey of JabberTones will be asking the questions!

Scott: Why have ringback tones in general been the red headed step child in the content mobile industry? I have felt that the hype in the industry after real tone/master tone debate and the never found app skipped right onto video when ringbacks were today and video is still tomorrow. Is it the carriers (b/c there is no competition= no marketing?) The content producers (figured the carriers would advertise for them?)
Audelia: For a long time, the only players that were able to market ringback tones were the operators since it's a network service. Therefore, B2C players such as content aggregators couldn't take part in the business and promote the service. This is about to change, with content mobile players stepping in.

Scott: Why haven't the enterprise sector jumped into ringback space - branding their company cell phones without spending on a pbx?
Inbal: I think it all depends on how aggressively the operator is marketing the service to this segment. We know of operators that 20% out of their ringback tones users are corporate users.
Xen: There are some mobile operators that have realized that the business is a relevant segment for ringback tones. For example, Orange IL targeted its business customers and provided a suiting offering -- to turn the ringback tone into a channel to communicate with wide audience. Many big sized companies use the corporate ringback tone as another channel of advertising (and play their advertising campaign), small and medium sized businesses, which have smaller budgets for advertising, use their company’s ringback tones to position themselves as creative, dynamic, cool and promising companies.

Scott: In terms of trends of ringback tones purchasing, is there a correlation with handsets or computer usage or any customer habits outside the mobile arena?
Audelia: Not that we know of. We are more aware of a correlation with other mobile types of usage (SMS usage, games, etc…).

Scott: I have heard that the beast selling ringback tones are movie themes - is this consistent with your data? How is the content different than the top selling ringtones? More voice tones? More music? I really care more about the content that is not being driven by a marketing campaign - A team theme song for instance.
Audelia: It very much depends on the country specificities. Overall, we know that most successful ringback tones are music related. But in some countries (e.g. Turkey, China) jokes are very successful too.

Scott: Can we compare the adoption curve in the US to Asia with the overall marketing budgets and educational campaigns?
Audelia: No. In Asia, more or less from day1, all operators and content providers invested in the service. Therefore awareness grew almost over night and service adoption was much faster.

Scott: Do you think there is a correlation between the age of ringback tones users and the fact that ringback tones are only for post paid? Whereas ringtone sales are for both pre and post paid?
Audelia: RBT are not only for post paid in most countries in the world. If that's the case in the US, it certainly has an impact on the average age of RBT users.
Xen: We run into a great example of Hutch, the Indian mobile operator, which sells ringback tones for prepaid with Fun Cards. Here is the TV ad:

Scott: How many telcos have a pre paid ringback tones service? I know Telefonica launched with Comverse but are there any elsewhere in the world?
Inbal: yes. Most operators in APAC & Eastern Europe have prepaid ringback tones service as in most cases over 80% of their users are prepaid.

Scott: Overall is the ringback tone service a less developed service than sms b/c essentially it is a voicemail technology and carriers have little faith in old technology?
Audelia: What do you mean by voicemail technology? Ringback tones is less developed mostly because it has no functional benefit, whereas SMS obviously do. Moreover, ringback tones require constant marketing efforts, whereas it's not the case for SMS. So it's less a matter of faith and more a matter of efforts required in order to promote the service and generate revenues.

Thank you Scott, Audelia and Inbal for this spontaneous interview! :) If you have further questions, feel free to send them over.

NYT: People and Their Avatars

The NYT published a beautiful series of portraits by Robbie Cooper in this weekend's magazine about people and their avatars, in virtual environments such as Second Life and Everquest. Follow the link for more pictures

The interesting is to witness how the created avatar is very closely tied to the personality of its creator in one of two ways:

• The avatar can be based on the user’s true physical appearance by keeping the same external characteristics such as color of eyes and skin tone, style of haircut and more...
• The avatar can present a desired but imaginary appearance: thinner, younger, more muscular, curvier, the opposite sex and more...

Levi's Goes Mobile

Levi’s, best known for jeans, was known for getting into the mobile phone business with a couple new hand sets. Yesterday came more details about the phones themselves. Levi’s says that their phone embraces mobile technology and enables young people to connect, enjoy music, images and video.

The adults might not understand the fuss around a Levis mobile phone and would say to their teenaged kid "who needs it?!", however mobile phones offer far more than simply a means of voice communication. They can provide entertainment, convey social status, and express one's individuality. It is known that "trendiness" is of high importance when selecting a mobile phone.

The Levi’s look brings a riveted looking case to the phone and a detachable chain that can hold the phone to your pants like those biker style wallets. ”Technology is at the heart of today’s youth culture and mobile phones are the ultimate accessory. Adding a mobile phone to our collection is a natural progression for Levi's®, a brand that is driven to meet the desires of young people”, says You Nguyen, Senior Vice President of Levi's® Product.

The phone will be offered in metallic silver, black and brown copper. Editions aimed more at the ladies will be shiny silver and shiny sand. The phone is made under license from the ModelLabs Group and will be available in stores in Europe in September of 2007. No word on when it will come state side, or any specs other that what colors the thing will come in.

[Via Levi's]

Seamus McAteer of M:Metrics on the Ringback Tones Market (Part III)

Welcome to the third part of the ringback tones coverage. Today, Seamus McAteer will be visiting here. Seamus is a co-founder, chief product architect and senior analyst at M:Metrics. Seamus has covered the wireless industry since the early 1990s and has earned a reputation as one of the most respected and credible analysts in the industry. He held director and research fellow positions in several corporations analyzing internet and communications technology before founding his own wireless and telecommunications advisory services firm. He is frequently sought by the media for expert commentary on wireless, Internet and related technologies.

If you missed the previous two part here are the links: the first part and second part.

Seamus, the stage is yours:

Hi Seamus. Thank you for visiting Xellular Identity :) How are you?
Great, thanks :)

What kind of business models exist today in the ringback tones market?
Pricing for Ringbacks can vary quite considerably. Most operators charge a monthly fee of between 99 cents for Cingular and Verizon and $1.49 for T-Mobile. Sprint charges $2.50 for use of a tone for a 90 day period. Some operators such as Boost charge a monthly subscription fee for use of a song. Again, like the issue with lots of different names, lots of different pricing schemes has got to create some confusion.

Labels like Ringback tones because it yields a nice recurring revenue stream and they get a nice royalty payment as operators will use a label-owned recording by the artist, this is not the case for poly tones for example. As a result labels can expect so share north of 30% of the retail revenue in most major markets.

Do you see correlation between market adoption and churn for ringback tones?
Comparing adoption rates and churn across markets it is evident that as adoption climbs churn falls. For example Spain has the highest level of adoption among the markets with track with about 10% of Spanish mobile subscribers over 13 reportedly using the service and it has the lowest churn rate of about 12% in a month. Italy has the highest churn of over 20% monthly and the lowest rate of adoption after the UK at about 3%.

Any examples of marketing best practices?
Verizon has the highest level of awareness and lowest churn for ringback services in the US. Its packaging of the services has been effective – it uses an introductory notification to tell the caller that their party is being reached. It’s launch was also effective, it worked closely with Warner Music on a mutual campaign.

Anything else to add to this interview?
Nothing, except that it was nice to hang out with you and the Comverse team at your customer event in Miami to talk about theories of social networking and the ringback market!

A big thanks to Seamus for his willingness to put the time and effort to convert his presentation given at the Fun Dial marketing Seminar (April 2007, Miami) into an interview and share with us all. :)

Carnival of Mobilists at Symbian Guru

This week's Carnival is hosted by the one and only, my dear friend Ricky of the Symbian Guru. Make sure you're not missing it!

Update: Nokia: A New Flagship Concept in Israel

As promised, I went to the new Nokia flagship store today to bring you some pics and remarks :)

The store is located in one of the popular hi-tech districts of Tel-Aviv. However, it is not in a place that the average man\woman would get to walk through if he\she doesn't work there or have a business meeting...

The 150 aquare meters store is divided into 4 sections: HEAR, SEE, DO and PLAY. In each section visitors are invited to try the relevant handsets and apps:

Tomer gave us a very informative tour, which was great, thank you Tomer! Excuse me for what I'm about to say here, but my favourite Nokia handsets - after the divine N-95 - were the fashionable ones, like the 7380 that looks like a lipstick... :)

However, comparing this flagship store to the Manhattan store, I was somewhat disappointed... I guess I expected to a bigger "wow".

Nokia: A New Flagship Concept in Israel

Nokia opened up their first flagship concept shop in Israel (just below my office actually), following their concept shops at NY, Moscow, Prague and Helsinki.

The store is over 150 square meters big and cost half a million dollars to build. It has a futuristic design which divides the store into 4 sections, each provides a different experience for the visitor of the store: HEAR, SEE, DO and PLAY. The aim of Nokia is to strengthen the playful experience and less the sale experience of the visitors.

Among the handsets, you can find the N95 and N76 that will be launched soon, 5700, E65 and E61, displayed in the four sections of the store.

Ricky, I promise to get back there on Sunday and take pics for you. So stay tuned, more pics will be uploaded soon :)

AT&T's Survey - An Alternative Point of View

The most important thing for mobile operators is how their services are being used, how much and by whom. This week, the American operator The New AT&T (formerly Cingular Wireless) reveals some interesting findings from a recent research commissioned by the operator.

According to the research, it turns out that men talk more on their mobiles than women - but only just. The survey of about 1,000 users found that men average 458 minutes usage per month on their phones, with women just behind at an average of 453 minutes:

 

What the press release doesn't say, but it is clear when displaying the data in a visual manner, is that for the last few years mobile voice calls are in decline for men and in a slight trend of growth for women. Interesting to see how AT&T chooses to present this data, as if "Women are quickly catching up with men in cell phone usage, illustrating that all consumers enjoy the flexibility and mobility that wireless phones add as they communicate with friends, family and business colleagues" and not because men use mobile voice calls less and less...!

However, the current state of the wireline service isn't much different: overall, both men and women continue to use cell phones more than home phones on average (455 minutes compared with 394 minutes), a trend that began in 2005:

The survey also reveals that women use wireless phones more than men to talk with friends and family, but men use their phones more for business conversations.

Gathering data of usage and consumption are very important to understand the service and to steer its future, but analyzing the data correctly is at the leart of it...

[via Cellular News]

Seamus McAteer of M:Metrics on the Ringback Tones' Market

Welcome to the second part of the ringback tones coverage. Today, Seamus McAteer will be visiting here. Seamus is a co-founder, chief product architect and senior analyst at M:Metrics. Seamus has covered the wireless industry since the early 1990s and has earned a reputation as one of the most respected and credible analysts in the industry. He held director and research fellow positions in several corporations analyzing internet and communications technology before founding his own wireless and telecommunications advisory services firm. He is frequently sought by the media for expert commentary on wireless, Internet and related technologies.

If you missed the first part, just follow this link.

Well, let's welcome Seamus:

Hi Seamus. Thank you for visiting Xellular Identity :) How are you?
Great, thanks :)

What are the market size estimates for ringback tones?
M:Metrics tracks use by end-users not revenues. In terms of overall usage we are talking about a service that was being used by about 9 million or so subscribers in the US in April, which is a doubling over the prior year.

How significant contributors to the overall revenue are the ringback tones to be in the future?
If adoption creeps up to about 20% in five years -- which is feasible --  then we are talking about a market with 50 million users spending about $3.50 per month if we account for increased switching and purchase of new songs etc. as people get more used to the service. Then we are talking about a market worth $2.1 billion just in the US. Not bad but still only 1% of all revenue. Ringbacks will be one component of the mobile music market which will include full tracks, music videos, video tones, and master tones. Music is a strategic priority for operators along with video, games, mobile Web, and advertising.

What are the barriers for market growth of ringback tones?
I think that the big barrier for growth in the market is marketing and education. We are getting beyond the early adopter stage where there is really significant social risk associated with use of ringbacks and people are confused when they hear a ringback and hang up. This is particularly the case among subscribers under 35 years of age. To get beyond the early adopter group there needs to be clearer marketing of the service and simplified pricing. The fact that there is no accepted consumer friendly generic name for the category is a real breather of confusion. The term Ringback is actually used as a brand name by Verizon and other operators have shied from using it.

Who are the major players?
Among operators in the US Verizon and T-Mobile, which launched services towards the end of 2004, have a lead in the market with adoption among their base of about 7%. Verizon leads on a market share basis given its substantially larger base of subscribers. Sprint is next in the market in terms of conversion with about 5% of its base.

The major players among vendors are RealNetworks through its acquisition of WiderThan and Comverse. NMS would be another major vendor in the market.

Thank you Seamus :)
Seamus will be here next Tuesday with more of M:Metrics insights about the American market of ringback tones -- so don't forget tune in!

Carnival of Mobilists at Symbian in Motion

Carnival 77 on Symbian in Motion hosted by Zach. Drop by to enjoy this week’s mobile blogging at its best. Read a round-up of the best current blogging about many mobile topics.

Sprite Ventures Into Mobile Social Networking

Targeting youth, the Coca-Cola Company announced the launch of “Sprite Yard”, a mobile social network. The Sprite Yard will enable users to send messages, chat, download content and share photos. The official launch is set for the 1st of June at China and 22nd of June at the USA.

To register as a new user, you need to text "YARD" to short code 59666, enter a tag name and password; upon completing the registration process, users may create public profiles, compile buddy lists, detail activities in the Planner and send short messages, or Shouts. In addition, Sprint Yard will offer exclusive content like visitones (visual ringtones combining images and music) and animated mobisodes.

What I liked is that awareness will be driven through PIN codes contained in the bottle caps (and not through mass media campaigns)! According to the company, Coca-Cola sells 10 billion single-serve bottles globally each year, providing a powerful activation mechanism for its promotional initiatives.

Only a limited amount of consumer brands have ventured into creating a social network, let alone a mobile one… It will be interesting to follow Sprite Yard's success (or failure). Any speculations?

[via press release]

Switch!

In response to my latest posts about Sprint's mobile content offering and Sprint's marketing activities, I received this video the other day. The video is a little long but it's worth it.

Ricky - this one is dedicated to you. Thank you for your great and insightful comments! :)

And thanks John for the link!

Carnival of Mobilists at Twofones

This week’s edition is brought to you by Twofones. Lots of good reading this week so head over! :)

 

Seamus McAteer of M:Metrics on the Ringback Tones' Consumer

Hi all,

Today I have the honor to host Mr. Seamus McAteer at Xellular Identity. Seamus is a co-founder, chief product architect and senior analyst at M:Metrics. Seamus McAteer has covered the wireless industry since the early 1990s and has earned a reputation as one of the most respected and credible analysts in the industry. He held director and research fellow positions in several corporations analyzing internet and communications technology before founding his own wireless and telecommunications advisory services firm. He is frequently sought by the media for expert commentary on wireless, Internet and related technologies.

First time our paths crossed was when M:metrics published their report about the ringback tones market titled "Ringing(back) into the year":

According to M:Metrics, the mobile market authority, while ringtone purchasing declined in Europe and leveled out in the U.S. market, a new star was rising: the ringback tone.

The mobile measurement firm found that ringbacks have grown most aggressively in the United States, at a rate of 225 percent from the quarter ended January to the quarter ended November. Ringback subscriptions grew across Europe, at a rate of 150 percent Germany and 146 percent in the U.K. during the same period. Between July and November, ringbacks grew 12.8 percent in France and 11 percent in Spain.

“The rise in ringbacks indicates that personalization remains an important motivation for mobile content purchases,” said Jen Wu, entertainment analyst at M:Metrics. “While we see a decrease in ringtone purchases, we do see an increase in user-created ringtones. Since it’s impossible to hack a ringback tone, this growing market is not threatened by piracy and end-user savvy.”

[via M:metrics]

After reading the report I really wanted to interview Seamus about it; then I was very lucky to actually meet Seamus in person and hear his presentation about the ringback tones market in the USA at the Fun Dial Marketing Seminar. His presentation was very interesting and I really appreciate Seamus' willingness to put the time and effort to convert it into an interview and share with all of my readers.

Getting to Know Seamus

Hi Seamus. Thank you for visiting Xellular Identity :) How are you?
Good… jetlagged after a trip to China, but otherwise all is well.

What brought you to the world of mobile?
I covered the mobile sector as an analyst since the mid-90s when I was with SRI International, a big technology think tank. I wound up picking up coverage of mobile data and handheld computing for a number of syndicated services which were offered by the Business Intelligence Center. I was more of a generalist technology forecaster at the Center before I fell into a specialization in mobile.

What takes up your time other than mobile?
Since I founded M:Metrics in 2004 I have had limited time for a lot of things that I enjoy outside of work. Time with friends and family are a big priority. I love to run trails in the Bay Area, enjoy studying history, and love live Jazz.

Something interesting to share with the world about you?
I have 8 sisters and 2 brothers. We are all close, like an Irish clan, and family gatherings are a lot of fun.

The ringback tones' Consumers

What is offered in this market today?
M:Metrics tracks the market for mobile content and applications in the US and leading markets in Europe. In the US about 10 operators offer ringbacks branded using various monikers such as Calling Tones from Sprint, or Answer Tones from AT&T, and Calling Tunes for T-Mobile. All of these names for the same generic category have got to be confusing for customers.

How users become aware of the ringback tones service?
Ringbacks have built in viral adoption appeal. I think that most people learn about ringbacks when they hear it when they call a friend. Awareness differs significantly by operator which shows that marketing must also have something to do with building awareness.

Who buys ringback tones?
Subscription to ringback services is gender neutral almost 50:50 male to female adoption in the US. Consumption skews young with a median age of about 28 but it is older compared with ringtone purchase, which has a median age of under 27, or listening to music loaded over the air which has a median age of close to 24. African Americans are more than 2.5 times more likely than the market average to subscribe to ringback tones.

Thank you Seamus :)
Seamus will be here next Tuesday with more of M:Metrics insights about the American market of ringback tones -- so don't forget tune in!

The Filter: Explore Your iTunes

In response to my post about MixSherpa, I was contacted by one of “The Filter” people, inviting me to explore their new music recommendation software. The Filter is a music recommendation service which started as a beta in 2006, and is endorsed by Peter Gabriel (the guy from Genesis). It essentially creates playlists on the fly and also helps users navigate their phone via recommendations. The site creates playlists from users' iTunes\ MP3 library based on “seed” tracks of their choice, and it can automatically create playlists based on present mood.

As I see it, many players are trying to grab a piece of this roughly $2.6 billion* globally in 2010 pie of mobile music (according to Phil Taylor of Strategy Analytics); and also be one of the most meaningful key success factors to increase music consumption - the music discovery and recommendation channel. However, you also need a differentiator - The Filter’s differentiator lies within the rediscovering music we already have and don’t always remember we have it.

The Filter is a free application and is currently available for Windows, Mac (Beta), and Nokia Symbians - Series 60, Nokia E60, N93 and N80.

*This figure doesn’t include personalization products like ringtones or ringback tones.