Xellular Identity - All About Mobile Content & Marketing

Video Content Not Only For The Masses

Chris Albrecht from NewTeeVee reviewed a new start up called Big Think. According to Chris, 

"Big Think wants to become the YouTube for ideas. The site has experts like professor Steven Pinker, author Deepak Chopra, and Supreme Court Justice Stephen Breyer answering big questions on topics like identity, politics and media. The video answers to these questions are supposed to kick-start discussions with people like you and me who can post responses or comments."

"In a world in which everyone’s a pundit, it’s nice to see someone recognizing the value of experts, but I just can’t see Big Think taking off. It’s just…so…heavy. Questions like “How are language and identity connected?” or “Has capitalism run mmok?” require too much brainpower when I’m multi-tasking with my computer, and the answers are snippets, so the topic can’t be more fully explored. While I haven’t watched all the videos, the only “fun” on Big Think I came across was “Writing for the Harvard Lampoon,” and “What is the most lavish party you have been to?” It’s like I’m reading cartoons from The New Yorker — clever, but fun in a way that’s elitist. Ultimately the whole thing feels like a big Ivy League club that I’m not welcome in."

Putting the writers' negative impressions aside, Big Think have a very smart segmentation, aiming to the higher-end of the population and not necessarily to the masses. When evaluating start ups or new websites, one must differentiate between the relevance for him\her and the relevance for the target segment. Although Big Think might make some people feel as if they are in a big Ivy League club to which they are not welcomed, many others might feel at home. This is exactly what segmentation is all about – specifically tailoring products and services for designated populations. Of course people who do not belong to the relevant segment might feel left out. Otherwise it wouldn't be segmentation at all. This is precisely the reason why adults might feel left out when their children play with Barbies, or action figures. Or why career driven businessmen might feel out of place in a cooking course. Good segmentation. That's why.

The segment of choice for Big think, the higher-end, is a segment that spends hours online and is always on the search for quality resources and quality content; i.e. the high-end segment is also part of the addressable market for video content. While this segment might have been consuming "light" content, it is well-equipped to enjoy more complex messages and will probably appreciate "heavy" content.

Some examples of successful segmentations have already made their way into marketing textbooks (such as manufacturing different car models to address different segments). Video content as a market has already reached the masses (YouTube, MetaCafe etc'), therefore segmentation is the natural next step. Lately we started to see some players addressing specific segments, like 5min and now BigThink. So, if you feel left out, don't worry – some player will target your segment soon enough.

This post was originally posted on The Flixwagon Blog.

Samsung Tries To Go Social Web 2.0

I was just reading at Go2Web2.0 about Samsung & YouTube's NewYears project. Users are invited to answer one of following questions in a short video (less than 1 minute long):

1. Make a video that reveals the one word that is your personal theme for 2008
2. Reenact the best of worst thing that happened to you in 2007
3. What cool things have you done with your mobile phone this year?
4. In 2008 what kind of cool mobile phone should Samsong develop for you?

Users can browse the videos using Google map and pick videos by location.

I can easily answer question #4 and say that Samsung should embed the Flixwagon live mobile broadcasting service in all of the devices :)

***

From a marketing point of view, while it is nice to see a huge mobile consumer brand interacting with users, IMO this campaign is not appealing enough; or in other words -- it lacks any real added value for the users.

1. YouTube users can upload their own created content to YouTube any day, therefore there is not much of an offer here. Plus, the current Samsung campaign limits users' videos up to a minute long while YouTube allows up to 10 minutes and 100 MB.

2. There is no clear incentive. Best clips will gain...? What? Self expression? A sense of belonging to a community? The perceived value should be the clearest message in any campaign.

3. And the worst: while a mobile consumer brand is involved in this campaign, there is no use of the mobile channel. How come there is no mobile offering in this campaign? Samsung could easily offer that the best 3 clips will be available on the mobile; or best suggestions (answers to questions 3 and 4) will be taken into development; or best clips will win Samsung handsets... ?

Ringback Tones Promotions

Hi all,

Xmas is right around the corner with its creative ringback tone mass media campaigns... But before that, I didn't want to leave without acknowledgment a few RBT campaigns from the last two months.

First campaign is brought to you from Colombia. The Colombian mobile operator Tigo has partnered Sony BMG to promote its content in a leaflet inside CDs and DVDs. Now Colombian CD\DVD buyers can simply send the short code that appears on the leaflet via SMS and get their own Backtone (Tigo's service name for ringback tones). The most crucial factor in this campaign is the offered playlist -- it would be very clever to offer music of the same type as the bought CD\DVD.

The second campaign is brought to you from the US. American mobile operator Cingular the mew AT&T launched a huge "Win a trip for 2 to meet Fall Out Boy, 50 Cents or Taylor Swift" campaign. AT&T users are encouraged to "Find Your Tone-ality to Fit Your Personality" and download an Answer Tone (AT&T's service name for ringback tones) and apply. Then, "if the artist calls you and hears his or her own song, you've won!"

And I can't wait to see this year's ringback tones Xmas campaigns... now that's a treat :)

Pricing: THE "Make or Break" Factor

We've been asked many times - what is the right price for ringback tones? Should it be related to the price of ringtones? What parameters should be taken into consideration while determining the price? Those are great questions that I'll try to answer here, based on the experience and data that has been gathered from many operators worldwide.

In general, the ringback tones pricing model is based on a combination of these revenue streams:

• Content fee - the price that is paid for each selected tune.
• Monthly/daily fee - the price that is paid for operating/enabling the ringback tones service.
• Registration fee - a one time fee that is paid upon joining the service.
• Content expiration - some operators have a tune expiration date, which means that after X days the activated tune expires. If the subscriber won't buy a new tune after the old tune expires, the default "ring ring" will be assigned to his/her account. Usually operators notify the subscriber that his/her selected ringback tone is about to expire and will offer a new tune (for a full/reduced price).

These four streams join up to 3 common pricing models:

1) Content fee + Monthly/daily fee:
An AT&T user (for example) is charged $1.99 per tune + additional $0.99 of monthly fee for the Answer Tones service. The monthly fee is charged regardless of the number of Answer Tones ordered.

The benefits of this model are the constant revenue stream & quick return of investment (ROI) coming from the monthly fee. However, setting the right monthly fee is crucial; overcharging will lead to high churn rates.

2) Content fee + Content expiration:
An AMC user (for example) is charged 120 lekë ($1.41 USD) for content fee and the Fun Tune expires after 6 months.

The benefit of this model is the lower user resistance due to the lower (perceived) price for ringback tones. Content expiration increases awareness of the service (subscribers don't hear their own tune and many times they actually forget that they are subscribed to the service) and aims to generate more usage. When the tune expires, users are offered to purchase a new tune. At this point users are actually reminded that they have been subscribed to the ringback tones service which leads to 2 scenarios: a) users choose to opt-in and buy a new tune (i.e. pay the content fee) or b) users are reminded that they have been subscribed to a service that they no longer want and they opt-out. Unfortunately, many users choose to opt out, causing higher service churn rates.

Operators that use this pricing model are strongly recommended to have a good renewal system which offers the user a new tune upon the expiration date and provide an easy and intuitive purchasing experience (usually via SMS with deep linking). The importance of the renewal system is greater as the tune's "shelf life" is shorter. Also, it should be based on intuitive call for action.

3) Content fee + Registration fee:
A Kyivstar user (for example) is charged 7,30 UAH ($1.45 USD) upon joining the D-Jingle service (one time payment for activating the service) + additional 7,30 UAH ($1.45 USD) for each tune. All tunes expire after 3 months.

This model is less popular among operators as it generates lower revenue stream for the operator. Also, at the first purchase, subscriber is charged for two payments (content fee and registration fee) at once, making the perceived price relatively high.

To summarize, each of these models has it advantages and disadvantages but there is no correlation between the pricing model & the ringback tones service take-up; however, there is correlation between price & service take-up, the price is THE "make or break" factor, as you can see in the following diagram:

Effective Pricing - Guidelines:

While there is no single winning recipe for ringback tones pricing, we do have some recommendations and guidelines for effective pricing. First and most important, the ringback tones price should be:

• Affordable - based on subscribers' capabilities
• Perceived as fair - compared with other operators & services

How can you make sure the price is affordable and perceived as fair?

Factor	Recommendation
Competitors	Lower or equal to competitors' price
Ringtones	<monthly fee + content fee> should be 30% below or above ringtones price
Monthly ARPU	<monthly fee + content fee> should be lower than 20% of ARPU
Average Prepaid card	Users should be able to pay monthly fee & purchase ringback tones along with their other voice & data expenses

And one last tip: if you don't have it already - create and promote a "promotion" category with a lower price. The promotion items can include the new single the music label is currently promoting, music covers, a discount for the first purchase etc'.

The Fun Dial Marketing Seminar - First Coverage

Back in 2002 was the first introduction of customized ringback tones, made by the South Korean operator SK Telecom with its 'Color Ring' ringback tones service. SK Telecom generated over €80 million (US$100 million) in Q2 2002 and has reached 54% of SK Telecom's 18 million subscribers in penetration.

Despite of the cold welcoming of operators in Europe and America, today Ringback Tones is becoming one of the biggest mobile entertainment revenue generators. In some operators Ringback tones are overtaking ringtones sales. In Europe and North America there’s a 60%-80% of Ringback Tone potential end-user-coverage, at least one operator in each Western European country and almost all in North America has already launched the service. Also analysts forecast a substantial ringback tones market growth in the upcoming years.

 

At present, most of the operators are facing various challenges in the way to increase Ringback Tones service penetration, create on going usage of content, increase the awareness and in general turn Ringback tones into a more successful service. Understanding operators' needs and challenges Comverse Fun Dial (Comverse’s Ringback Tone brand) team came up with the idea to hold the second ever marketing seminar focusing the European market. The Fun Dial Seminar brought together leading industry experts, mobile operators, (some that have already launched the service and some which are on the process of launching), as well as content providers, music labels and managed services providers to facilitate an environment of knowledge sharing and to create an open forum to discuss burning issues related to Ringback Tones.

For those of you who weren't able to attent the Seminar, I will cover here some of the study cases presented at the Seminar:

• How to turn the Ringback Tone into a successful service generating significant revenue?
•Case studies of successful Ringback Tone marketing strategies led by mobile operators
• Opening the ringback tones service to 3rd party content providers.

You're welcome to tune in every Tuesday for a part of this series!

Back in 2002 was the first introduction of customized ringback tones, made by the South Korean operator SK Telecom with its 'Color Ring' ringback tones service. SK Telecom generated over €80 million (US$100 million) in Q2 2002 and has reached 54% of SK Telecom's 18 million subscribers in penetration.

Despite of the cold welcoming of operators in Europe and America, today Ringback Tones is becoming one of the biggest mobile entertainment revenue generators. In some operators Ringback tones are overtaking ringtones sales. In Europe and North America there’s a 60%-80% of Ringback Tone potential end-user-coverage, at least one operator in each Western European country and almost all in North America has already launched the service. Also analysts forecast a substantial ringback tones market growth in the upcoming years.

 

At present, most of the operators are facing various challenges in the way to increase Ringback Tones service penetration, create on going usage of content, increase the awareness and in general turn Ringback tones into a more successful service. Understanding operators' needs and challenges Comverse Fun Dial (Comverse’s Ringback Tone brand) team came up with the idea to hold the second ever marketing seminar focusing the European market. The Fun Dial Seminar brought together leading industry experts, mobile operators, (some that have already launched the service and some which are on the process of launching), as well as content providers, music labels and managed services providers to facilitate an environment of knowledge sharing and to create an open forum to discuss burning issues related to Ringback Tones.

For those of you who weren't able to attent the Seminar, I will cover here some of the study cases presented at the Seminar:

• How to turn the Ringback Tone into a successful service generating significant revenue?
•Case studies of successful Ringback Tone marketing strategies led by mobile operators
• Opening the ringback tones service to 3rd party content providers.

You're welcome to tune in every Tuesday for a part of this series!

Focus on Mobile Avatars - Mobagetown Japan

After answering a few readers queries through email, I realized that there is a growing reader's interest in mobile offering of avatars. Therefore, I decided to reply in a series of posts for the benefit of others who might be interested as well.

One of my favorite examples of a smart business model and a VERY successful avatar service is Mobile Game Town (Mobagetown) from Japan. It is the largest and fastest growing mobile Social Networking Service (SNS), available only on mobile. The site is a blend of casual games and social networking, multiplayer and singleplayer games coupled with chat, blogs and avatars.

An interesting fact is that Mobile Game Town is offered by DeNA, a Tokyo-based e-commerce company that runs virtual auction sites and shopping malls. This fact leaves a notable footmark on the business model (and makes a differentiator from other SNS sites). DeNA hooks the users with free mobile games with over 30 titles to choose from, supported by advertisement. Users buy from mobile e-commerce sites and get “mobile gold” which is then used to dress their avatars; by spending in the real world users get virtual money to dress their virtual alter ego, their avatar.

[via DeNA]

Mobile Game Town’s success is overwhelming: 5 million users with over 400 million daily page views back in May in less than a year from its official launch. Just to put the numbers in perspective, Mobile Game Town’s stats are four times larger than that of Yahoo's mobile portal! 

And to give you a sense of latest (brilliant) marketing activities:

In June, DeNA announced "an interesting summer Yukata campaign. In co-operation with Aeon  dept. store the companies have set-up a virtual avatar catalogue from which members can build, for a modest fee, their outfit based on actual products complete with best dressed contest prizes. This would seem to be a rather slick ad campaign ultimately designed to drive purchases of the real thing just in time for the summer matsuri (festival) season. The company ran a similar campaign for Nike where customers who bought physical goods were rewarded with virtual prizes."

[via Wireless World Japan]

And a special treat from the Wireless Watch Japan - a video demo of both "Mobile Game Town" and Disney's "Wonder Days" (which will be reviewed here on its own in one of my next posts).

College Students Are More Open to Mobile Advertizing

According to a new study from Ball State, "Technically oriented college students are increasingly receptive to receiving advertising via text messages on their cell phones and other mobile devices".

"An analysis of mobile communications by college students during 2005-07 found that 56.3% of respondents would accept ads if they would get something free, said Michael Hanley, a Ball State advertising professor and mobile marketing researcher.

About 37.4% of college students said it would only take the offer of a free ringtone for them to would accept advertisements on their cell phones while 21.4% preferred a discount or coupon to a restaurant, movie or grocery store and 20% wanted free minutes, upgrades, access to the Internet or music."
[via MobiAd Network]

Update: Continuing on the search for analysis about mobile advertizing I found this (which I think supports the findings from above):

Acording to a study by media agency Universal McCann "people always complain about things that are interruptive - it still works in traditional media but in this environment consumers have so much choice where they source content from and if it detracts from the experience they will go elsewhere.

The survey, which covered 9,500 people with a mobile phone and an internet connection in 21 countries from the UK to Mexico, suggests the marketing opportunity to reach gadget users is bigger than ever.

Consumers in the developing world were the most receptive to advertising, particularly Mexico, China and Thailand, while the US, France and the UK were the least receptive markets. On a mobile phone, the best forms of advertising were opt-in Bluetooth formats that provide information or vouchers direct to the mobile, popular with 72% of the global sample, and sponsored search results. Adverts on mobile internet pages and TV adverts on mobiles were rejected by 61% of respondents.

For podcasts and videocasts, sponsorship was the most valued form of advertising, followed by brand recommendations from presenters. Adverts at the beginning of the clip were acceptable but interruptive ads in the middle of a video or audio clip were not."

[via The Guardian]

Harnessing Blogs for Marketing Campaigns

Hi all,

I was invited to give a presentation about blogging from a marketer's perspective. As a blogger, I get many press releases sent to my inbox everyday, hoping to get featured. However, many of them are irrelevant to my field of expertise and to the topics I cover at my blog. Eventually, many of those press releases find their way to my trash can...

At the ordered lecture, I want to present examples of smart and creative marketing campaigns that harnessed the power of popular blogs for marketing goals. I started to search the web and found this amazing story at Word of Mouth Marketing Association website:

"Toyota recently completed a campaign in which it engaged a team of Greek bloggers to spread the word about its new hatchback model, the Auris. Toyota wanted three things from its Greek Auris campaign. One, it needed to be digital. Two, it needed to put the car's interior -- its "cockpit" -- front and center. And three, it needed to inspire test-drives and get consumers into the driver's seat.

To achieve its goals, Toyota decided to let its customers market the Auris for it. It invited 15 Greek bloggers to test-drive the car for a week, and encouraged them to post their findings to an official Auris Blog as well as to their own blogs. The results:

* Bloggers wrote 55 posts about the Auris.

* Readers posted 175 comments to the bloggers' posts.

* The Auris Blog received 52,000 visits from 41,000 unique visitors.

* The campaign generated 2,000 test-drive requests -- 50% of all test-drive requests."

[via WOMMA]

If you have more examples of this kind of marketing activities - please contact me. I promise to give you full credit for it :)

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.

Frank Dickson of iSuppli: Strong Long Term Growth Lies in the Mobile Full-Track-Downloads

Hi all,

Welcome to the second part of the mobile content coverage.

Today, Frank Dickson from iSuppli will be visiting here. Frank is Principal Analyst, Multimedia Content Services. He covers markets for digital video and home entertainment, with focus areas including IPTV, video on demand, home networking and broadband video.

Hi Frank. How are you today?
Life is good. Thanks for asking.

What has been successful to date and what promises to sell in the future?
In addition to premium content, messaging continues to grow strongly worldwide but with significant regional variation. The mature country markets of Western Europe and Asia saw growth, but the growth in the Americas almost astounding. Growth is strongest among the US operators, several of which saw revenue associated with messaging double in 2006 compared to 2005. Messaging growth is being driven by both increased p2p messaging usage as well as increased premium SMS associated with mobile content purchases and participative TV.

What are the key drivers for market growth for different types of mobile content and entertainment?
The future is all about video! The mobile video market continues to develop, but remains highly fragmented on nearly all fronts. Business models are uncertain. Technology standards are uncertain.  Consumer usage models are uncertain. Content rights need to be resolved. Geographic differences are significant in both content consumption and regulatory environment. As a result, the mobile video market will take time to develop, but offers the biggest potential upside. Competitors across the value chain should participate early to learn and develop a position in the market. Competitors should set expectations appropriately for a highly volatile market with high uncertainty in the short term. Agility will be key to adapt to rapid change.

Many state that widespread consumer demand has lagged after a rapid penetration rate. Why? What are the barriers for market growth of market for mobile content?
The major barrier to growth of mobile content is leakage, as in revenue leakage. Approximately, 5% to 10% of transactions turn out as bad transactions due to fraud, lack of funds on a prepaid card or delivery problems. Another 5% to 15% of good transactions result in refunds due to shady marketing practices, overly protective wireless operators not wanting a customer to have a bad content experience or a lack of transaction visibility for customer service. Wait, did I mention the customer service support call costs? There is money leaking everywhere.

One of the problems is that the wireless operators want to be in the center of the purchase experience.  The billing systems however are built to service reoccurring wireless subscription customers. Wireless operators making themselves the nexus of mobile commerce transactions creates a problem as they are now providing high volume transaction clearing services like those provided by Visa, PayPal and others.  Frankly, processing financial transactions is not at the heart of their distinctive competencies.

How will the services evolve over time?
The mobile music market is among the most dynamic content categories worldwide. Polyphonic ringtones are receding with a transition to realtones. However, on a worldwide basis, the overall ringtone category appears to be slowing. 

Ringback tones continue to gain strength in Asia, but haven't migrated significantly to other geographic regions yet. Video ringtones are among the newest services positioned as a next-generation ringtone.
The emergence of full track download music services continues, with operators worldwide deploying services. Dramatic growth of these services remains mixed regionally and by operator. Consumers are still slow to build awareness, while operators have significant challenges to put together a cohesive and easy-to-use full track music storefront. Overall, in the emerging battle between music phones and mp3/pmp players, the music store and music delivery platform still significantly favors mp3-oriented services. 

What applications will drive the market in the next few years?
We believe that there is strong long term growth in the mobile full-track-download market. However, outside of Asia, the inflection point for dramatic growth is still developing. Overall, iSuppli reduced it’s full track download forecast in this quarters tracker, while increasing our outlook for mobile music streaming services. Full track downloads will continue to be among the strongest mobile content markets, while streaming music services will segment the market somewhat and take advantage the subscription-based business model which aligns ideally with mobile operator business models.

For example, we did end-user primary research to provide more insight into consumer demand.  Approximately two-third so respondents listened to music on they PMP; however, only 10% listened on their phones. This suggests their may be some struggle converting individuals from a usage specific device mentality to unbiquitious device mentality.

A big thanks to Frank Dickson for this great interview! :)

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.

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. :)

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!

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]

Mobicious: One Part iTunes, One Part Google

Back in January, Michele MacKenzie of Ovum, addressed the key challenges wireless players are facing when growing the wireless content market:

“The market place for mobile content was dominated, in earlier years, by the closed portals of the mobile operators. Those days are over now. We estimate that in Europe 50-70% of content revenues are driven from outside the operator-branded portal. […]An on portal and off portal strategy are not mutually exclusive, they complement each other and are both needed. The walled garden is no longer viable: a single portal will not meet all of consumers’ growing demands. And operators benefit from off-portal content too: it drives revenues from data traffic, and we believe it will also help open the way for advertising revenues going forward.

Mobicious, who just launched this week, try to put the described above into practice; “Mobicious” (a name that came  about by squeezing “ambitious,” “delicious” and “mobile” together) hopes to be the best place for mobile phone users to discover mobile content and services.

How? Mobicious offers a diverse listings of mobile content like mobile services, ringtones, wallpapers, weather alerts and video games. By “diverse listings of mobile content” they mean both on-portal and off-portal mobile content.

Having the mobile consumer in mind, Mobicious wants to be the one place to find everything for your mobile phone, including paid-for and free content, on-deck and off-deck. When particular item costs money to download, Mobicious sends the user directly to the company’s own online store. By This, Mobicious actually addresses the mobile content discovery problem and tries to simply it. Things are simpler when all content is under one directory which includes support, forums, ratings, reviews, and help. Mobicious also copes with consumers fear from hidden phone bill charges when downloading content from off-portals - by deep linking into the content owners’ download pages in case the item has a price tag.

To put things to the test I searched Mobicious for “Madonna” (note that the service is currently available only to US users). As you can see at the screenshot below, I can download pictures and ringers of Madonna, some for free and some require a plan:

 

You can also try the Mobicious mobile web page by pointing your mobile browser to www.mobicious.com.

And last thing, on the business side,

"Mobicious’ business plan is twofold: selling ads on its Web site and taking a cut, about 10 percent to 15 percent, of purchases made that originated from its site. Since the company won’t charge upfront fees, and will make it easier for people to buy features, cell phone carriers are mostly welcoming the idea of sharing revenue, Chang said. “It’s a really easy sales pitch,” he said."

[via the Boston Hearald]

Mix Sherpa: A New Mobile Music Discovery Service

Hi all,

Today I wanted to review a very creative campaign done by Sprint to promote its new mobile music store called Mix Sherpa.

Sprint was looking for a way to create buzz and raise awareness for their recently launched Music Store in an already very crowded space with Verizon's, T-Mobile's and The New AT&T's (Cingular) music download stores. Also, the audience of "Advanced Connected", which Sprint wanted to reach, is extremely averse to traditional advertising and blatant promotion.

So how did Sprint manage these challenges?

The human\social angle - Sprint invented a whole story about 2 characters:
Ias Westbury, a washed up pop star from the 1980s running a record store on Melrose and DJ Supahboy5 who works at Ian’s store. To make the story seem more real, Ian even has his own myspace page and a music video for Ian’s one and only hit from the 80s called “Under the Moon” [which was directed by the music video legend Nigel Dick, (Tears For Fears, Guns N’ Roses, Britney Spears)].

The added value to the user - Sprint integrated a discovery and recommendation engine into the story about Ian:
Users engage with Ian and the DJ by creating their own playlists and in return getting an “expert” review of their choices. Users also get recommendations based on the newly created playlist. The added value for the users is the discovery of new music that fits their tastes and the reaffirmation of who they are and what their musical taste says about them.

Finally, piling a playlist and getting exposed to new music while interacting with a cool character will (hopefully) generate Sprint music downloads! Who wouldn't want to take the playlist to the mobile? Especially if the recommendations will prove themselves as precise, or in Ian's words:

"You go to the site and select your own custom playlist. Through the magic they call a “logic engine” - I'm able to analyze your playlist - and maybe analyze what's going on in that head of yours too. I'll offer you everything in my arsenal with humor, wit and charm - naturally. My longtime employee DJ Supahboy5 is also online to interject with his own opinions on songs and styles. We've got information on bands and songs, and links to download everything you need to take your mobile phone to the next level“.

As for the mobile part, Sprint offers "Sprint Music Manager" which is PC client that helps you sync your music from your PC to your mobile using a USB cord. As I don’t have a Sprint phone (I don't live in the US) I asked to get a demo account to try the new service. However, if someone gets the opportunity to play with it in the meantime, please share your experience and insights! :)

Ringback Tones: The Future Digital Music Distribution Channel?

"The overall value of the worldwide music industry has been in decline for several years, falling from a high-point of $39.7 billion USD in 2000 to just $32.1 billion USD in 2006." This is the main drive for the music labels to look for new outlets. One of them is the mobile music market. Lately, we have been witnessing a new marketing approach on behalf of the music labels; the ringtone and ringback tone have started to replace the old single played at the radio stations. Music labels now have been providing exclusivity for new singles mobile operators for a limited time, many times before the album has been even released.

What are the benefits of using this method?

• For the users - users are attracted to the exclusive and hot ringback tone and want to have the latest and hottest new song;
• For the operators - operators create more awareness to the ringback tones service, they generate more usage and hopefully more penetration of the ringback tones service. Also they are perceived as innovative, cool, updated with the current music… And, let's not forget that later on, after the exclusive ringback tone expires, they will notify the users and offer a new ringback tone and so on…
• For the music labels - music labels get the public to spread the word about and play the new release, i.e. increase awareness to the new song and drive sales later on when the album is out.

In Malaysia,

"pop singer Misha Omar released 2 singles as a digital single/truetone, some three months before the scheduled full album release. "This is the way the industry is moving. It looks like we will be doing it for all of our artistes," said Sony BMG managing director for Malaysia, Adrian Lim. Warner Music's new media development manager Wong Mei Chen said the company is also walking down the same path. "That's the trend that the business is going into. You'll be seeing more of that. You'll hear it as a ringtone before you hear it on radio." Wong cited examples like Linkin Park where the ringtone for the What I've Done single, which was released two months before the Minutes to Midnight album in May."

[via The Star Online, Thanks Gabi!]

However, this trend is not limited only to the more advanced Asian markets; some popular international acts are even beginning to sell more ringtones than albums: The Pussycat Dolls, for example, sold close to 80,000 ringtones of songs like "Don't Cha and Beep" while their album only sold about 50,000 copies."
[via The Star Online]

Also, In the past, I presented here another 2 international examples:

• American operator Sprint has used this marketing strategy when it offered, EXCLUSIVELY, Pearl Jam's "World Wide Suicide" single both as ringback tone (Caller Tone) and ringtone.

• And Orange France offered Johnny Hallyday's new ringback tone (Fun Tone) "La loi du silence" exclusively to its users. And here's the clip:

Seems like ringback tones might be the future digital music distribution channel. Any comments? :)

Ringback Tones: The APAC Operators Cash Cow

The Ringback tone service has been highly successful ever since its early launching days back in 2002. The first introduction of customized ringback tones was made by the South Korean operator SK Telecom with its 'Color Ring' ringback tones service. SK Telecom generated over €80 million (US$100 million) in Q2 2002 and has reached 54% of SK Telecom's 18 million subscribers in penetration. In the Asian market in general, the ringback tones service has maintained an average of 20% service penetration across the board, with some operators reporting up to 50% penetration.

Ongoing content usage is a key success factor to the strong ringback tone business case, and content consumption is also very high in Asia. Operators in the region report that customers frequently change their content to fit their mood, style, musical taste and just for fun. Nevertheless, it is amazing to witness the amazing ongoing uptake of ringback tones in APAC today:

"A leading wireless internet company in China recently published its results for Q1 2007, among them its Colour Ringback Tones service results:

Out of total revenues of US$35.14 million in 1Q 07, the Colour Ringback Tones Service’s revenues were US$3.35 M, which are 10.5% of the total wireless Internet service revenues in the quarter. This figure is an up of 45.6% quarter over quarter and up 36.2% year over year. Colour Ringback Tones revenues made up.

The company also states that the Colour Ringback Tones business “continued to increase quarter over quarter due to Chinese New Year related and other event driven promotional activities with mobile operator partners. While Colour Ringback Tones revenues increased year over year due to our expanding relationship with China Mobile's centralized music platform and continued declines in the average unit price of Colour Ringback Tones, stimulating end-user demand."

[via Sys-con Media]

As you can see, the ringback tones service has been and still is a “cash cow” for APAC operators. Hopefully will see more European and American operators reaching these great numbers as well.

T-Mobile With A Music Offering For UK People

Hoping to captialise on its "Street Gigs"* events and Channel 4 music series  "Transmission", T-Mobile is extending its offering beyond T-Mobile customers for all music fans. How? T-Mobile is launching of a new music site named ARTISTdirect.com/uk. The site will go live on Monday morning and fans will be able to access exclusive content from StreetGigs artists such as The Fratellis, Mika, Badly Drawn Boy and the Arctic Monkeys.

T-mobile has teamed up with US-based ARTISTdirect.com, the largest site for independent music online. Based on the US version of the service, the UK partnership hopes to offer subscribers the chance to download content from its live music events 'Street Gigs' to the mobile and consume more mobile content. The new website will be dedicated to the UK market solely.

Music fans on T-Mobile will be able to download music via T-Zones, and non-T-Mobile customers will also be able to access news and get tickets to secretive StreetGigs and Channel 4's Transmission with T-Mobile.

[via press release]

What I like in this initiative is T-Mobile's understanding that as a consumer brand, it must have have an attractive offering to a wide audience; but even more important is to find the way to engage people which are not nesesarily T-Mobile's subscrubers. By providing them a reason to access the T-Mobile's website and incentivize them to visit recurrently, T-Mobile will build its public image and hopefully will draw more subscribers.

*For the non-UK readers, T-Mobile's "Street Gigs" is a unique series of live music events.

Sprint: Leveraging Email Communication for A Successful Campaign

Hi everyone,

Getting back from the Fun Dial Marketing Seminar provides so many new topics to share with you :)

Today, I will review a very interesting and effective marketing campaign that basically don’t cost operators so much as above the line marketing activities (like mass advertising). The American mobile operator Sprint was facing a situation by which it had low ringback tones content downloads by existing subscribers, low awareness of people to the service and limited marketing budget.

Accordingly, the campaign’s objectives were
• To increase ringback tones downloads
• To increase number of ringback tones service users
• To increase awareness to ringback tones service

Sprint sent an email to a targeted group of 500K subscribers which constitute the ‘power users’\ heavy content services users. The reason for targeting only a certain group (and not the entire install base) was to intention to reach a critical mass of users - including “opinion leaders” – in a short period of time and leverage the viral nature of the ringback tone service. Having a core of users is what is needed to create a buzz.

This group of heavy users was offered James Blunts’ famous “You’re Beautiful” ringback tone (Call Tone) for free. The rational was to choose a famous musical track which is known to most people and “fit” wide range of ages and cultures. The drive to action was a click on link - “Try it - click on the “Download” link below” relying on impulsive buying behavior [see the image of the email]:

This simple button automatically activated the ringback tones service for those users.

The impulsive drive to action didn’t fail Sprint. In a matter of days it got an 8% of conversion rate out of the targeted recipients\population; meaning, Sprint pin pointed the “right people”. Also, Sprint witnessed an over 30% growth in weekly downloads.

In conclusion, choosing the right content and targeting to the right segment are key success factors. Also, with minor marketing investments substantial revenue can be generated.

Ringback Tone Current Market Overview

Back in 2002 was the first introduction of customized ringback tones, made by the South Korean operator SK Telecom with its 'Color Ring' ringback tones service. SK Telecom generated over €80 million (US$100 million) in Q2 2002 and has reached 54% of SK Telecom's 18 million subscribers in penetration.

In spite of the rapid growth and high penetration of ringback tones in South Korea, western operators decided to take an approach of “we will wait and see” towards the new app on the block. Having a lesson learnt about different markets behaving differently through the i-mode experience, western operators realized that not every "killer app" in Asia would necessarily stick in the USA and European markets.

Despite of the cold welcoming, today Ringback Tones is becoming one of the biggest mobile entertainment revenue generators. In some operators Ringback tones are overtaking ringtones sales. In Europe and North America there’s a 60%-80% of Ringback Tone potential end-user-coverage, 80%-90% wireless operators are expected to launch the service by end 2007, and at least one operator in each Western European countries and almost all in North America has already launched the service. Also analysts forecast a substantial ringback tones market growth in the upcoming years.

At present, most of the operators are facing various challenges in the way to increase Ringback Tones service penetration, create on going usage of content, increase the awareness and in general turn Ringback tones into a more successful service. Understanding operators' needs and challenges Comverse Fun Dial (Comverse’s Ringback Tone brand) team came up with the idea to hold the first ever marketing seminar focusing the American and Latin American markets. The Fun Dial Seminar brought together leading industry experts, Fun Dial customers and operators, (some that have already launched the service and some which are on the process of launching), as well as content providers, music labels and managed services providers to facilitate an environment of knowledge sharing and to create an open forum to discuss burning issues related to Ringback Tones.

Opening the second day, Seth Schachner, VP Latin Americas Markets at Sony BMG, presented the role of content in the success of mobile music. “Music and content are ever seeking creative new distribution channels. The wide adoption of cellular by a wider range of demographics, younger segments, music savvy’s etc’ has opened new avenues of revenue for both mobile companies as well as the music industry” He Said.

For those of you who weren't able to attent the Seminar, I will cover here some of the study cases presented at the Seminar:

• How to turn the Ringback Tone into a successful service generating significant revenue?
• Two case studies of successful Ringback Tone marketing strategies led by mobile operators
• The Comverse Fun Dial's vision on the future of the Ringback Tones service
• The current market of ringback tones according to M:metrics

You're welcome to tune in every Tuesday for a part of this series!

Special: A Sneak Peak at the mobileYouth report 2007 (Part II)

Hi everyone,

Continuing with a great success, let me welcome here again a dear friend of mine. Please welcome Savka Andic, Research Associate at the Wireless World Forum, who is also the co-author of the mobileYouth 2006 report. Savka has agreed to share some insights from the upcoming mobileYouth 2007 report! If you missed the first part of this interview, just follow the link.

Savka, the stage is yours!

Which handsets are popular among different age groups and why?
There is a whole school of “handset anthropology” devoted to the study of how mobile handsets mark out group identity. Handsets are not only associated with different age groups but also with different lifestyles and aspirations. One recent Australian survey I came across drew the following conclusions about the identity of handset owners:

Handset	Typical Owner
Motorola	Fashion-conscious under 24s
Nokia	Family-minded, middle-aged managers
Sony Ericsson	Ambitious young men trying to make their mark
Samsung	Career-minded young women
LG	Mothers

According to this survey, I would be an ambitious young man, given that I’m the proud owner of a Sony Ericsson Walkman handset -  It’s a great handset and I would recommend it to music lovers everywhere (Sony Ericsson are not sponsoring me to say this!).

Notice that Motorola is very much seen as a youth handset, particularly in the United States. This is due largely to the success of the slim and zippy Motorola V3 RAZR handset. The handset’s status as a badge of inclusion among youth made it into an iconic youth handset. Nokia, as always, is renowned for its durability and reliability, and for this reason is favoured by more active youth with a propensity for breaking things!

Which services appeal most to different age groups and why?
Pre-teens and younger teens will favour services which allow them maximum communication with their friends. Services such as Boost Mobile’s Loopt service are popular with this age group. Boost Mobile customers can download Boost Loopt on its existing Java- and GPS-enable handsets. Once you activate the service, Boost Loopt can use GPS to locate you and others who subscribe to the service and have accepted your Boost Loopt invitation to list them as friends. When Boost Loopt is running, a map appears on screen showing your own location. Up and down hardware navigation controls on your handset cycle through your friends' locations, from nearest to farthest or from farthest to nearest. Left and right navigation buttons control the zoom view of the map.

Like some instant messaging clients, Boost Loopt lets you scribble a short status message about what you're doing; you can also broadcast messages to groups of friends (which you can define by name, using a desktop browser) or to all friends within a certain distance. Boost Loopt lets you bookmark locations and define events to which you can then invite your friends. The service expects to introduce additional community mapping features--such as the ability to tag, blog about, and annotate locations with images and videos--later on.

Older teens and young adults will favour services such as Chaos Mobile, a portal for mobile music and content based on punk and rock music, skateboarding and other extreme sports associated with the “Vans Warped” tour. On Chaos Mobile, consumers can download songs, related content such as ringtones and wallpapers and find additional music and artist information exclusive to the portal. This age group also favours MVNOs such as Amp’d Mobile, which creates and delivers exclusive mobile content to its subscribers (such as the Li’l Bush series). These kinds of services are more geared to a youth expression of individuality and desire for unique content than simply to satisfy a need for belonging.

What can you say about issues like texting and linguistic degradation?
The results are inconclusive. While some studies have shown that youth linguistic skills are adversely affected by text messaging and we hear that “txt spk” is showing up with disturbing frequency in school essays and exams, other studies have shown that the children who text most frequently are on average stronger readers and writers than the less frequent texters. So texting doesn’t have a noticeable effect on the language used by children with pre-existing stronger literary skills. What still needs further investigation is whether children with weaker literary skills are more adversely affected by texting.

Thank you Savka for this great interview :)

The B-tones Are Coming...

"Oh, did you mean Cingular's Answer Tones, 3's Dialtunes, Francetelecome's Fun Tones, or Cosmote's Calling Tunes...? And in Israel, is it Funtone (Orange) or Pleasant Waiting (Cellcom); in the UK, is it Calling Tunes (Orange) or Caller Tunes (T-Mobile)? "

-Confused?
-It's clear. There's a name problem!

To put an end to this, as well as increase consumer's awareness to the ringback tones service, we were looking for a generic name and you helped a lot by voting on our suggestions. As promissed, here are the results of the pole:

B-tone wins with 54.3% of the votes! Now our mission would be integrate the new name in our daily vocabulary. Hey, if Nokia managed to exchange "mobile phone" with “multimedia computers”, the sky is the limit!

Cingular (The New at&t) Pumps Up Revenue with "American Idol" (Part II)

Continuing with a very interesting study case of Cingular's long success with sponsoring the "American Idol" TV show, today I want to present the huge success Cingular had in the SMS arena. In case you've missed the first part of the Cingular study case - just follow the link.

For many years, the US was a backwater of mobile messaging in comparison to other regions of the world. However, looking at Figure 1 reveals a remarkable growth; Cingular has doubled the number of sent SMSs within a year (in millions):

Figure 2 might provide an explation for the striking growth: the SMS voting for “American Idol” which has been doubling itself from season to season caused the growth (in Millions)!

However, Cingular has done a lot more than offer SMS voting, it has been very creative with a diverse SMS offering:

1. Voting
All voting are done by texting the word ‘vote’ to a different number to vote for each contestant.

Who can vote?
Anyone calling or any Cingular Wireless subscribers that text message from within Continental US, Hawaii, Alaska and Puerto Rico can cast their vote for the next American Idol. 

According to Cingular’s press release, “it has set a new record for wireless text messaging in the fourth season of "American Idol". The company recorded more than 41.5 million text messages throughout the show's 12-week voting period, which is believed to represent the largest volume of text messaging in a single campaign in the history of the U.S. wireless industry.”

Season 3 had an 80% increase over season 2 with more that 40% of all participants had never sent a text message; and the most outstanding fact - from the first to the last voting episodes, text votes increased by nearly 700%! (According to “The Future of Mobile Media” by Lucy Hood, News Corp Content & Marketing, April 27, 2005). It would be only fair to say that “American Idol” taught the American nation how to SMS!!

2. Vote Reminder

Cingular offers its customers to sign up to a vote reminder. Customer then receives a recap of the contestants and their voting numbers just as the voting window opens. To sweeten the offering, customers who sigh to the vote reminder service can earn 25 bonus sweepstakes entries and get standard message rates apply to all messages sent and received.

3. Trivia Game

Cingular offers a trivia game about the idol’s facts. To play, customers need to register for the weekly game. Registered customers get 20 new questions each week direct from the show. Each question answered correctly gives 1 point, answer incorrectly and they get 0 points! The top 30 scores are available at Cingular’s web site. Signing up and playing is done by SMS, messages sent and received while playing American Idol Trivia are charged at your standard messaging rates.

Amazed? This is not all... wait for next Sunday to read about Cingular's offering beyond the SMS arena!

Special: A Sneak Peak at the mobileYouth report 2007

Hi everyone,

Continuing with a great success, let me welcome here again a dear friend of mine. Please welcome Savka Andic, Research Associate at the Wireless World Forum, who is also the co-author of the mobileYouth 2006 report. Savka has agreed to share some insights from the upcoming mobileYouth 2007 report!

Savka, the stage is yours!

What can you say about the differences in mobile usage among youth worldwide?
Differences in mobile usage among youth worldwide are due more to differences in mobile industry structure than they are to any underlying cultural differences between today’s youth. In fact, youth are remarkably similar and share the same basic needs the world over; what’s different is how the mobile industry recognizes and responds to these needs. We often hear arguments about how Japanese and Korean youth are more “gadget-crazy” and more likely to be early adopters than American or European youth, or how the culture is simply different in East Asia and youth there are naturally drawn to strange new technologies. This is like arguing that people living in the tropics spend more time outdoors than those living in snowy climates because they are innately drawn to nature, completely ignoring the fact that it’s much warmer near the equator and therefore more pleasant to spend time outside than in the freezing cold! It’s flawed logic which overlooks the generative conditions of youth mobile use.

For example, people used to argue that texting would never take off in the US like it did in Europe or Asia because more people had access to email and wouldn’t be interested in using the phone for sending messages. However, in 2006 texting grew fivefold in the US and is now nearly on a par with texting in Europe after the dismantling of major industry-related barriers such as SMS interoperability and charging models where customers paid to receive text messages.

Youth in Northeast Asia continue to lead the world in high levels of data usage, where on average youth data ARPU comprises 40% of total ARPU. In Europe, America and the Middle East data ARPU still lags significantly behind, comprising about 10-20% of total ARPU. I predict a move towards significantly heavier data use among youth in the coming few years, particularly with the increasing uptake of mobile music.

Where are the emerging youth markets for mobile products and services?
Geographically speaking, China, India and Brazil will continue to be key markets for the next five years, all three of them ripe for growth. In the more mature markets, mobile content is still very much an emerging market for youth with a lot of potential. Operators and content providers are not yet finding the best ways to satisfy youth desire for mobile content, with the notable exceptions of youth MVNOs such as Amp’d Mobile in the US and the East Asian operators. Amp’d Mobile’s success shows the considerable appetite which youth have for mobile content: an ARPU four times higher than the US/European average and content revenues nearly ten times higher than the US/European average.

What are the economic implications of mobileYouth purchasing?
Displacement, displacement, displacement! Mobile’s intrusion into the traditional areas of youth consumption has created displacement in both the financial and the social arenas. The more conventional youth symbols of social status and maturity, such as cigarettes and special clothing, have been displaced to a considerable degree by mobile. In fact, the decline in smoking among UK 15-16 year olds during the late 1990s and early 2000s was attributed in part to the rise of the mobile phone, which not only left youth with less disposable income to spend on cigarettes but also functioned as a tool to define status and signify maturity much in the manner of the cigarette.

Financially speaking, mobile has displaced a remarkable $500 billion worth of youth spending since 1996. In 2006 alone, youth worldwide spent $130 billion of their disposable income on mobile, and by 2010 that figure will rise to $350 billion. Today youth on average spend 10% of their disposable income on mobile, but in certain regions such as Japan, Korea and the Middle East, that figure is as high as 15-20%.

You claim there is a lack of consumer focus in mobile industry. What are the reasons for it?
We identify two basic reasons for this lack: the residual effect of uncompetitive market conditions in early markets and the general attitude of the technology industry towards consumers. Decades ago, the divide between technology and the average consumer was very great. Technology did not make up the fabric of everyday life like it does today and average people had less knowledge and lower expectations of technological products. In turn, the industry did not feel obliged to take consumer needs into account and this fostered an industry push model of technology. The industry assumed that consumers (or “end users” as it still calls them) would eagerly lap up all of the products pushed upon them, a mentality which continues today with concept such as “killer apps” and the like.

Telephony was traditionally seen as a utility, much like gas and water. Gas, water and landlines are commodities, and you really don’t care who provides them for you as long as it’s reasonably cheap and good quality. This telephony-as-utility approach had a residual effect on the mobile industry. However, mobile networks cannot behave towards consumers as if they are providing a mass-produced generic utility - mobile phones are crucial social tools and people are anything but indifferent to them like towards gas or water.

What are the “mobile myths” according to mobileYouth?
The lack of consumer focus in the mobile industry addressed above has spawned a series of myths regarding how consumers use their phones and what they want on mobile. One of the main myths which I touched on above is that consumers want “killer apps” – fun and “cool” new technologies and “feature-rich” phones. The principal message of mobile youth is that “killer apps” and “features” mean nothing unless they are underpinned by a social benefit for the consumer, especially for young consumers, whose universe is tightly defined by the type of social interaction they have. This is why complicated services with no clear social benefit such as MMS have not taken off, despite the industry pitch. Why should kids send expensive and convoluted MMS when they can upload their mobile photos to Flickr using services like Shozu and share them with friends?
This is where Comverse has done a great job with mobile avatars. Mobile avatars recognize youth’s need to extend their self-expression beyond their phone, making the avatar a form of social currency among youth.

Another myth is the myth of mobility – the idea that simply being able to take something with you on your phone is a social benefit. Mobilizing existing services such as TV and social networks is not necessarily compelling for youth – there must be some added benefit beyond mobility which reinforces youth’s existing peer group or helps them interact more effectively with their environment. It is for this reason that PC and mobile social networks are actually quite different, and simply sticking a PC MySpace page on mobile phones is not really compelling or a big deal for youth. This is also why technologies like QR codes can be very beneficial, because the leverage the unique flexibility of the mobile phone to the consumer’s benefit.

Kids use their mobile phones a lot at home where they can easily access PC and landlines, so obviously the appeal of the mobile phone goes deeper than just “mobility” otherwise they would only use their phones when “on the go”

Thank you Savka for these great insights :)
Savka will be here next Thursday, so don't forget tune in! 

BMI: Ringback Tone Market Streaming Up

Another player of the ringback tones eco-system reinforces the forecasts of a substantial growth for the entire ringback tones market:

“Broadcast Music, Inc. (BMI), the leading U.S. performing right organization representing more than 6.5 million musical works from more than 300,000 songwriters, composers and music publishers, today released its annual projection for U.S. ringtone sales and for the first time released a U.S. ringback tone market projection for 2007.

BMI projects that ringbacks will generate approximately $65 million (U.S.) in retail content revenues in 2007. This is BMI's first market estimate of the long-awaited rollout of the ringback tone market. A ringback tone is a musical work that is performed to the caller when they place a call to a participating mobile subscriber.

BMI's estimates are based on more than 520 million individual, detailed ringtone transactions analyzed by the organization over the past 12 consecutive quarters. BMI tracks census sales data on more than 325 outlets for the sale of mobile entertainment in the U.S.

"As we forecasted last year, the ringtone market matured in 2006. The slowdown in ringtone growth, however, was partially offset by the first wave of promising U.S. growth in ringback tones," said BMI Vice President of New Media and Strategic Development, Richard Conlon. "We believe that the ringtone market's growth has leveled off and the novelty phase has ended. We envision increased revenue opportunity in the streaming sectors of the mobile entertainment market, ranging from ringtones to audiovisual cellular phone TV-style offerings."

[via Yahoo News]

Cingular (The New at&t) Pumps Up Revenue with "American Idol" (Part I)

A dear friend of mine just finished writing a very interesting study case of Cingular's long success with sponsoring the “American Idol” TV show. After reading it I thought this would interest many of you; so I asked and was kindly given an authorization to publish the study case at Xellular Identity.

Background
Cingular Wireless, now the new AT&T, is the official and exclusive telecom sponsor of American Idol's 6th season, started on Jan 07 after a huge success as the telecom sponsor for the last four years (2 years under the name AT&T Wireless).

“American Idol” is a televised singing competition which seeks to discover the best young singer in the country, through a series of nationwide auditions. The outcomes of the later stages of the competition are wholly determined by public voting. The format features three judges who critique the contestants' performances in order to facilitate the voting.

“American Idol” has become one of the biggest TV hits: it is the number 1 hour and number 1 half hour show on the American television for the third consecutive season. Also, the TV show won the 2006 People’s Choice Award for Favorite Realty Show/Competition and was nominated for the Emmy 14 times! The successful format was sold to many stations around the world, among them are South Africa, Poland, Germany, Australia, Netherlands, Belgium, Canada, France & the Pan-Arabic region.

Measured by ratings, American Idol was the No. 1 show in America in 2004 while AT&T Wireless managed to reach the 10th place in the top 10 brands of 2004:
 

By 2006, Cingular reached the 7th place(!) and “American Idol” kept its reign as the most viewed TV show:

This case study will show how Cingular has been increasing usage and revenue by sponsoring the show. Don't forget to tune in next Sunday for the second part of this series!

Celebrating Early Steps of Openness to 3rd Parties

One of the most promising strategies to increase mobile subscribers’ exposure and awareness to the ringback tones service is opening it to the content off-deck market; i.e. to enable 3rd party retailers and content providers to offer ringback tones content at their portals. This way, there will be more places for users to acquire ringback tones, they could buy them both at operators’ portals and at the content aggregators’ own websites.

Telenor just launched a few days ago its new ringback tone service called Ventetoner which has been enabled for roll out by Telenor’s 12 operating companies across Europe and Asia. The novelty in the current launch is the new technology which lets third parties sell ringback tones that work on the Telenor network. As far as I know (and feel free to comment and correct me if I'm wrong), the precedent of this kind of cooperation belongs to Jamba, a mobile content aggregator, which started a few months ago to promote T-mobile’s and Vodafone’s ringback tones in its German website; but still, at this early stage, every mobile operator that aquires the technology to enable 3rd parties promoting ringback tones is a cause for celebration.

If you're curious to now just how powerful this strategy is and how it helped Jamba and T-mobile to increase their penetration numbers, both T-mobile and Jamba are going to present their success stories at the upcoming Ringback Tones Marketing Seminar in Miami at the 18-19th of April. For online registration to the Seminar, follow the link. Also you can contact me for more information and agenda.

Music Discovery Channels and The $1M Question

The first five items in the “top ten list” of mobile music downloads usually represent about 40% of all downloads. This outstanding figure raises two paramount questions asked by all players in the music industry: how do people discover new music and how can the players help people discover more and more? For the players in the music industry, discovering more music means consuming more. So how do we really get exposed to new music?

One of the main channels for exposure to new information as well as to new music is the mass media. In other words, who hasn’t listened to the radio while driving and got to hear the new single released by the most popular artist? Another channel of exposure is recommendations. Everyone has a "broker" in his social network, who is someone that really knows music and recommends new music and music worth listening to. Brokers are regarded as unbiased, authentic and reliable. Brokers are people that you trust and like their taste and they can be friends, broadcasters, or even music critics...

So heading to the million dollar question, how can these channels be leveraged to promote more mobile music? The first example of leveraging mass media to discover music comes from South Korea. Korean operators invested in new technologies in order to create a more convenient user experience for buying ringback tones. Both KTF and SKT use QR codes. QR codes are 2D codes which are published in newspapers, bus stops, billboards etc’ and contain information which is captured with a cameraphone (like in the illustration above). The cameraphone reads the information stored in the QR code and the user gets his\her new ringback tone (for a commercial of QR codes follow this link to Youtube). The second example is using video clips on a music channel. While the clip is playing, a bubble of information appears on the screen offering the viewers to get this song as their new ringback tone by sending a short code via SMS. Both examples leverage existing user behavior as well as impulsive buying.

A more “techie” channel of exposure is through several web based applications. These applications are actually the technological equivalent of the recommendation mechanism mentioned above. By this I refer to many cool companies like Pandora and Musicovery that developed web tools to discover new music based on tagging, categorizing (Pandora’s music genome project is really worthy of note) and community’s recommendations (usually done by ranking). Musicovey took it a step further with links to iTunes and Amazon.

In the mobile arena, one of the pioneers is MyStrands which just launched its Social Player last week. MyStrands offers a “music player for mobile devices (Symbian Series 60, 3rd edition) with two main characteristics: it is a music discovery tool and a strong community builder”. As a music discovery tool, it provides real-time recommendations of songs that are similar to the currently-playing song. Also, 30′ clips of the recommended songs can be streamed to the mobile device, and users can always learn more about the songs on MyStrands mobile website. To watch MyStrands' demo and more just follow this link.

Hopefully, in the future we will see more of these discovery applications in the mobile arena. If operators and content aggregators would enter this field, we could enjoy a wide range of new services. Imagine getting exposed to new music through the mobile and then being able to set it as a ringback tone in just one click…

Tell Me Where You Are With Your Ringback Tone!

Usually, when you think of ringback tones you think of music played while waiting for the other side to pick up the phone and answer the call. But there's more to ringback tones than that! I have already covered in the past some study cases of operators who took the ringback tone to the next level with very creative types of content which are not necessarily music. What I haven’t thought of before is using the ringback tone to let your caller know your location!

The Broadband in India blog brings the following story of the Telecom Regulatory Authority of India (TRAI) which “has also told the mobile companies to provide a special ring back tone to the calling party when a person is on roaming. This would benefit them as the caller would realize that the person he/she is calling is not in his hometown. TRAI said in its statement: “Mobile users can activate this facility before going abroad. This will enable minimizing calls when on international roaming, if the calling party exercises restraint.”"

[via Broadband in India : India Broadband and Telecom Blog]

I really hope to see more creative ways to leverage ringback tones to provide better services for the ringback tones users. Nice work!

Content Is King - The making of Klonies

Lately, I keep getting readers emails saying that I haven’t written about the Klonies for a while now… So I decided to give you a peak of the Klonies backstage. I’ll start with the Klonies content and continue with the making of in my next post.

We all know that when it comes to mobile, content is the king. You can have a cool sharing app or community but if you don’t have attractive or compelling enough content - you’re doomed.

Just a quick note - Klonies, for those who don’t know, are a new service of personalized Avatars by the mobile solutions provider Comverse, that enables the creation of Avatars from a big content library of body types, eyes, hairstyles, hats, glasses, moods, clothes, branded accessories, etc., which can be used in traditional Web forums, as well as to extend this experience to the mobile arena. Comverse has created a mobile Caller ID service, by which a user can create his Klonie either on the Web or on his mobile handset. Klonies let youth segment do something they could never even dream of doing before: create expressive avatars that represent them on other people’s phones. Klonies give the users extended means for self expression: they define how they are seen by their friends, on their phones.

To be able to cover the Klonies content I met Ronen Ventura, the Klonies Chief Graphic Designer and Tali Perel, the Klonies Styling Adviser. Here’s what they told me:

Usually we start with a meeting of the designers, Styling Adviser and Marketing for a brain storming, to raise upcoming events (Valentines, Halloween, spring break etc’), topics, characters and that sort of leads. For example, when we launched the Klonies on Skype last year, we offered a wide collection of Football Mania clothing as it was only a few days before the world cup.

Other lead is analyzing users downloads; we can share with you that we were amazed to find out that men and women are very different in their preferences:

Most women want to be either bad or cool:

We see a lot of laid-back men:

As for dressing up:

Also, sport is the strongest theme amongst males, which nonexistent with the ladies. So, by analyzing downloads we get to learn a lot about tastes and trends. Also this is a great pointer of which areas to need to be broadened.

Apart form events, locals fashion also inspires the Klonies content. Our styling adviser explores fashion and teen magazines to get the sense and taste of specific audiences. Klonies sales people usually buy local magazines as part of their tasks when flying on business trips.

And you'll have to tune in later on for the second part of 'The Making of Klonies' :)

Ringback Tones TV Commercials

Hi everyone,

Today I decided to address another aspect of marketing, a mass communication marketing activity, i.e.TV commercials. To me, it is very interesting to see commercials from different mobile operators from around the world and look which aspects of the ringback tones service each one chooses to present.

For your convenience and fun, I'm adding here each commercial as I cover it, so you're welcome to read, watch and enjoy :)

The first commercial comes from Orange Israel:

What I liked here is that Orange presents how an ordinary and dull 'ring ring' sound can be replaced with a much more fun tone (which is actually Orange Israel's name for the service). The commercial doesn't take us to the mobile arena literally, rather displays a metaphoric example of anther dull 'ring ring' situation of a young guy pressing the door's buzzer and waiting to be answered.

The second commercial comes from T-Mobile Czech Republic:

Here, T-Mobile empowers the ringback tones subscriber - he can change the caller's mood by playing a fun dial tone...

The third commercial comes from Hutch, India.

Here, Hutch emphasized personalization. As a ringback tones subscriber (or Caller Tunes) I can set different tunes for each of my friends, so they all enjoy while waiting for me to answer. Like the first example of Orange, Hutch doesn't place the commercial at the mobile arena and we get to link the metaphoric example to the Caller Tunes service later on.

The fourth commercial comes from Cosmote Greece:

[For some odd reason, at YouTube there's no sound, so you can download the video from here as well]. What I liked here is the suspense the commercial puts you in. Everyone calls Yargo - but why? This commercial also empowers the ringback tones subscriber, he\she becomes popular since everyone wants to dial his\her number...

Well, I hope you enjoyed it. If you come across other commercials, feel free to send over the links or post them here as a comment :)

Ringback Tone Marketing: Make RBT a Top Revenue Generator

Today, the ringback tone is becoming one of the biggest mobile entertainment revenue generators. In some operators Ringback tones are overtaking ringtones sales. In Europe and North America there’s a 60%-80% of ringback tone potential end-user-coverage, 80%-90% wireless operators are expected to launch the service by end 2007, and at least one operator in each Western European countries and almost all in North America has already launched the service. Also analysts forecast a substantial RBT market growth in the upcoming years.

At present, most of the operators are facing various challenges in the way to increase Ringback Tone service penetration, create on going usage of content, increase the awareness and in general turn ringback tones into a more successful service.

Understanding operators' needs and challenges and after the great success of the first Fun Dial Marketing Seminar in Budapest last year, we, the Comverse Fun Dial (Comverse’s Ringback Tone brand) team, will hold the first ever public seminar in Miami USA on April 18th-19th, solely focused on marketing. The Seminar is targeted for all players in the ringback tone eco-system, i.e. mobile carriers, record labels and content providers. TThe main focus of the seminar is sharing best practices, success stories and key success factors with the RBT community.

If you're interested in taking part in this event or sponsor, please contact me.

Interviewing John White on Digital Music (Part II)

Welcome to the second part of the digital music coverage. Today, John White of Portio Research Ltd will be visiting here.  If you missed the first part you can follow the link.

Let's welcome John:

Hi John. Thank you for coming back, how are you? :)
Hi Xen, thanks a lot, I’m doing great thanks.

Who are the big players in the global music market? Are there new players in the neighborhood at the era of digital music?
Obviously the music industry is dominated by the big 4 record companies - Universal, SonyBMG, Warner and EMI. Much of the decline over recent years has been attributed to the rise of digital music and the increase in unlicensed file sharing (first Napster, then LimeWire and so on) and illegal peer-to-peer file sharing. It goes without saying now that the music industry looks at developments online very seriously. With the rise of YouTube and MySpace and similar sites becoming major players in the marketing of music, and with increasing numbers of mp3 download sites available, some online players stand to become very influential in the music market. If MNOs get it right and build market share in the download market they too stand to become quite significant in the music market.    

What is the future of retail music sales in comparison to the mobile music?
We forecast physical CD sales to continue declining and digital sales to grow steadily.

What are the estimates for music handsets market?
Without giving away too many of the details from our new study, we forecast a very strong future for the sales of mp3 enabled mobile handsets. We estimate that there will be over 1.7 billion mp3 enabled handsets in circulation by 2011, representing a little over 40% of handsets in use worldwide at that time.

Will the mobile kill the stand-alone MP3 players?
Not exactly, no. We believe that the mobile handset will become the primary portable music device for the mass market, but as the whole digital music market grows, so sales of stand alone mp3 players will continue to grow also – so it’s good news for everyone! There will also remain to be a hard core of dedicated music fans who will carry both, as the stand alone players will maintain a lead over mobile handsets in terms of playback quality, storage capacity and so on.

What can you say about the importance of music to the mobile telecoms industry and the impact of digital music on 3G services?
If the services are structured right and priced appropriately, we believe that digital music has the potential to become a fairly substantial ARPU booster for operators. Music will never generate the kind of revenues that SMS makes, but as a value added non-voice service music could become a great revenue booster for operators.

Any examples of marketing best practices in the music/mobile music industry?
Yes, but we’ve written another entire report about that, called ‘Strategies for Creating End-User Demand for Mobile Data Services’, so readers will have to check that out on our site for more details!

What can you say about the positioning of major players and advertising opportunities in the digital music market?
We see substantial opportunities for major brand advertisers to use mobile music as a way to move more advertising spend onto the mobile platform. We believe there are great opportunities to sponsor or subsidize downloads and we think youth-focused brands could make a real impact here.

What are the key drivers for mobile music appeal?
The appeal of music is widespread. To be fair, as with most other services on the mobile platform, the youth segment will surely lead the market as the early adopters, but it would be foolish and short-sighted to think the market starts and ends there. Music is widely enjoyed by all ages from 9 months to 90 years old, so mobile music services should be designed to appeal to all age groups and demographics. Services need to be easy-to-use, cheap, quick and reliable, and the spread of content on offer must appeal to all tastes. Driving the uptake of OTA services will need innovative marketing, which may be where the advertisers come into play, and mobility will need to be positioned as complimentary, not competitive to wireline services. If consumers can believe there is little difference in price between downloading OTA or on the PC at home, they will download OTA whenever they feel like it.

Do culture and orientation influence mobile music consumption? How?
Sure, in all the obvious ways that culture influences taste in music.

Which are the most developed mobile music markets?
Japan, South Korea, the UK, the USA is fast coming on.

What is going to be the next *big thing* in the mobile music market?
Seeing if the price is right!

Also, I just thought about it, do you want to say something about the new iPhone?
OK Xen, I'll tell you what I have to say about the iPhone - but you'll have to tune in next Thursday for it!

Thank you John!

Prepaid Ringback Tones

Today I want to present a very creative strategy for marketing ringback tones and ringtones: the Fun cards.

Hutch is advertising new Fun cards for ringtones, Caller Tunes and a card for Caller Tunes Shuffle. These cards have a 16-digit code which users can buy in shops. There is a wide selection of cards with different tones. After taking the time to choose, users scratch the Fun card for the code and SMS it to 123. Within seconds, they will receive the ringtones or the caller tune they had requested to play on their Hutch phone.

What's in it for the mobile operator you ask?

First, and most important, the Fun cards marketing strategy enables impulsive purchase of ringback tones (i.e. short decision making and leveraging the need for immediate gratifications). Second, it increases ringback tones’ visibility in points of sale. Third, it positions Hutch as an innovative, creative, dynamic and cool mobile operator.

Also, this form of buying ringback tones enables a subscriber to purchase a Fun card for any other mobile subscriber, friend or family and give it as a present. And you can always use it yourself :)

To view Hutch's ad click here

Creating New Outlets For Mobile Music

Music labels and content providers are looking for new outlets to offer mobile content like ringtones, video clips, download full tracks etc'. Last week I read about two new business partnerships:

1. "Sony BMG Music Entertainment and Warner Music Group have partnered with a joint venture operating in China that develops technology for distributing music downloads and other content to mobile phones, the record companies said Tuesday. The [Chinese] company makes software through which mobile phone users can dial up digital content such as ringtones, listen to streams of audio like podcasts, or download full-length songs. [...] Those are the platforms we're hoping to launch with some of the operator partners," said Thomas Hesse, president of global digital business for Sony BMG. "The fact that you've got the music companies supporting this, we believe, is going to strengthen the chance of those platforms being successful."

   [via Cellular News]

2. Groove Mobile has announced a partnership with Universal Music UK to build and operate an "off-portal" mobile music store. Through this partnership, UK mobile phone users on any UK wireless carrier will have instant access to full track downloads from Universal Music UK's extensive catalogue via SMS short codes from their mobile phones. [...] Universal Music U.K. is leveraging the Groove Mobile platform which runs on a majority of the world's music phones in order to provide consumers with the robust downloads they have come to expect when using today's 3G networks," stated Adam Sexton, Chief Marketing Officer of Groove Mobile."

[via Cellular News]

Mobile operators should wake up and seize the opportunity as well! And this is how

CBBC - Kid's Virtual World

Virtual worlds are becoming a sphere for children as well - the BBC plans a virtual online kids's world where they can inhabit and interact.

"CBBC, the channel for 7-12 year olds, said it would allow digitally literate children the access to characters and resources they had come to expect. Users would be able to build an online presence, known as an avatar, then create and share content. Bosses said CBBC World would not have the financial aspects of other online worlds such as Second Life. [...] "It will give children a chance to move around a safe, secure world where they can not only interact with familiar characters but have an opportunity to make that world a more fascinating place with their own imaginations.""

[via BBC]

It makes me think about the messages that will be conveyed, targeted marketing and segmentation, child's psychology...

Orange UK: Ringing Up Xmas Tunes

Orange UK made a special Christmas campaign and was the first campaign for its Calling Tunes service since the service was launched in November 2005.

The campaign was launched during December, and offered the free Christmas Calling Tune to all of Orange UK users. Customers were sent either an SMS or an MMS promoting the offer, which could be adopted by either visiting the Christmas Grotto section on Orange World or by dialing a given number.

If you missed it (or you live elsewhere) here is the campaign's text:

Hi from Orange. Calling Tunes are snippets of music accompanying the usual ring-ring callers listen to while they wait for you to answer the phone. As it’s Christmas we’re giving away the Calling Tune ‘Merry Christmas Everyone’ for FREE. Just go to the Christmas Grotto on Orange World or call 477 (10p/call) and type in the quick code 20550 Keep togetherness going. Terms at orange.co.uk/xmastune

And here is the given Calling Tune.

Orange UK saw amazing results which crowned this campaign to one of its best campaigns. This makes you think - how does it work?

The medium of SMS\ MMS encourages spontaneous decision making on behalf of the users; it takes them only a few seconds after reading an SMS\ MMS to decide whether to delete it or to act accordingly. Campaigns of this kind need to cope with the implosive decision making upon receiving the SMS\ MMS notification, so in order to raise the amount of joining users - the offer should be irresistible. You’d have to agree that receiving a free Calling Tune is definitely of such nature for most users. Also, to increase success the message needs to be tied to the basic need for instant gratification; in this campaign it was the Christmas spirit and the need to celebrate and belong.

And a final note about impulsive buying: impulse buying can also occur when potential users spots something related to a product that stirs a particular passion in them, such as favorite sports teams, music artists etc’, and there are great examples of this kind as well.

Ovum: The Market of Mobile Content - long, hard slog!

Hi everyone,

I'm happy to welcome Michele MacKenzie from Ovum to review the market of mobile content here at Xellular Identity. Michele is a Senior Analyst and a Service Manager for the Ovum advisory service and Practice Leader for Ovum's Consumer Practice. Michele has over seven years' experience in the telecoms industry, specializing in mobile communications and wireless Internet.

Michele, the stage is yours:

A few years ago the mobile content market grew quickly, but growth was fuelled solely by a special kind of content: personalisation, that is ringtones, logos and wallpapers. People regard their phones as highly personal items, and content for making them even more personal quickly proved to be highly popular.

However, in the more general content areas such as news and music, mobile has taken longer to develop and has grown more slowly. Mobile operators have had to deal with big challenges in re-purposing themselves as content media, in terms of technology, internal organisation, relationships with other businesses and relationships with their customers. Progress on all those fronts has been slow, and it is not over yet.

So although the availability of mobile content has taken big strides forward in recent years, we expect revenue growth to be steady rather than spectacular over the next few years. We forecast that global revenues will grow from around US$31bn in 2005 to US$55.5bn in 2010. In 2005 and until the middle of the forecasting period, personalisation applications continue to dominate. But from 2007/8 onwards other application groups such as Alerts and mobile TV and video will increase their contribution to revenue growth. Ovum expects revenues from rich content - music, games and video and TV - many of which are core 3G applications, to drive wireless content revenues from 2008 onwards.

The market place for mobile content was dominated, in earlier years, by the closed portals of the mobile operators. Those days are over now. We estimate that in Europe 50-70% of content revenues are driven from outside the operator-branded portal. The figure is lower in the US, around 40%, but is growing fast. Operators need to move fast in order to capture and maximise these revenues, by putting in place a well thought through off-portal strategy. An on portal and off portal strategy are not mutually exclusive, they complement each other and are both needed. The walled garden is no longer viable: a single portal will not meet all of consumers’ growing demands. And operators benefit from off-portal content too: it drives revenues from data traffic, and we believe it will also help open the way for advertising revenues going forward.

On the global level, mobile content, including data traffic, is around 5% of total consumer service revenues at present. We expect this to hover at around 5 or 6 % throughout our forecast period. The wireless content market still faces a huge number of challenges. Many of the new higher value services such as music, video and mobile TV will go through a bedding down phase and will take some time to reach the mass market, not least of all because of low handset penetration supporting the new services and other key enablers such as DRM. Many players have now made those initial investments and have done the groundwork to either launch the service or prepare for launch. Many are now addressing the early market and looking at how to bring those services to the mass market. Two new areas of great potential are social networking and mobile advertising. These two key areas are intrinsically linked: mobile social networking services can drive mobile advertising revenues. But both are embryonic at present, and wireless players are still grappling with the issues they involve: they are a long way from mass-market uptake.

The key challenges that wireless players are facing when it comes to growing the wireless content market are:

• Increased competition in a convergent world
  Consumers are targeted with content and entertainment services by their TV providers as well as their fixed and broadband service providers and in addition by their mobile providers. On top of that, they may well already have their email or instant messaging account with one of the large Internet portals such as Yahoo! which will also be offering them a range of services. This is where mobile players need to think more carefully about a multiplatform strategy and partnering with other players out there. The market is very crowded with many players looking for a share of both the end-user revenue and the advertising revenue.


• Wireless players move out of the comfort zone
  Providing music and TV services is a different business to personalistion. Wireless players are now exposed to greater competition (see above) which means lower margins. Many will struggle to differentiate and build the business and some will do well to take on the facilitator role rather than compete head on as a service provider. These roles are not mutually exclusive.


• Wireless operators need to harness the off portal opportunity
  There is a growing trend for wireless operators to absorb or subsidise the traffic charges for on portal services. This of course is an area of contention for off portal players, many of whom are reviewing their options having seen increased barriers to entering the rich content market due to prohibitive traffic charges. In order for the rich wireless content market to grow it will be critical for the wireless operators to look at a wholesale data strategy for third parties or flat rate data packages. If you don’t do it somebody else will so it is better to plan your strategy early on.

Do’s and Don’ts To Promote VAS On The Web

Today everyone is talking about viral marketing methods and the importance of a good PR agency... I was going through a few operators' websites and realized that while there are many good examples of web marketing, many operators don't really use their websites to build users' awareness to VAS. So here is my list of 'Do's and Dont's' to promote your ringback tones on the web (you can use it for other VAS as well):

1. Think of your users in everything you do

Some users probably don't know what a ringback tone (Caller Tone/ Caller Tune/ Answer Tone/ Funtone) is, while others never have set it before and need a simple and clear explanation how and where to set it. Some users were looking for something else at the operators' websites and made an impulsive decision to buy while others know what a ringback tones is and entered the website with a planned purchase. Keep in mind that you need to address all these different scenarios and more.

When Verizon Wireless’ users enter Verizon Wireless’ website they see a menu containing a list of features (Music & Tones/ Video/ Wallpaper etc). Also they see a short description of the ringback tones service.

There is a high correlation between content rank and number of selections. So being taken to the “Top 10” lists when pressing on the “Music & Tones” section is smart.

Also note the “What’s Hot” section - there are featured artists like Justin Timberlake and Christina Aguilera which leads me to the next tip:

2. Leverage existing consumer behavior

Justin Timberlake's or Christina Aguilera’s fans would be driven to press the link and look for any available content, whether it is a truetone, a ringback tone, a wallpaper or a video clip. Operators should leverage the emotional involvement with the artist and the existing user behavior to drive the need and drive the impulsive purchasing to download new content.

3. Bundle ringtones, ringback tones & other services together

When a user selects one of Christina Aguilera's ringtones offer (pop-up window or other way) her ringback tone as well. Other ideas for bundling content: 2 for 1, ringtone + ringback tone + wallpaper etc'.

4. Use of existing communities’ assets to promote services

Emotional involvement with the Manchester United soccer team for example, drives the fans' need to download. It also acts as a trigger for impulsive buying. Look for existing communities’ assets to promote your service.

5. Keep it short and simple

T-Mobile's users need to go through a lot of web pages to get to T-Mobile's mobile content.

Also, T-Mobile's users need to go through a lot of text to understand what a CallerTune (ringback tone) is and click through many web pages to get to the song catalogue.

I hope you find the insights I’ve shared here of value... :) Also you're MOST welcome to share your reactions/ thoughts/ ideas/ experience...

Get Yourself An Exclusive Ringback Tone

Many people just stick to the old (and beloved)… You probably know many people that rarely change their ringback tone. This can be very annoying especially if they are friends that you call very often. But it can be also annoying for the mobile operators :) and that is, apart from being users who don’t download and pay for new content…  The consequence of sticking to the old ringback tones (for the operator) is having a long tail of old content that each item has so very few subscribers. Obviously operators want to keep their ringback tone catalogue (and ringtones catalogue) fresh, under constant updates and have many subscribers for each item.

One of the ways to improve the described situation is exclusivity. Music labels give mobile operators exclusivity for new singles for a limited time. Users are attracted to the exclusive and hot ringback tones and happily leave behind the old (and unpopular) ringback tone. Thus they enable the operator to take the old songs from the system and make room for new content. Later on, after the exlusive ringback tone will expire, the most probable (and desirable) is that the users will get a new ringback tone and so on.

Implementing this strategy, American operator Sprint received the exclusivity for the first single "World Wide Suicide“of PEARL JAM's self-titled album to be offered both as a ringtone (Call Tone) and as a ringback tone. Sprint also offered their users a contest for live show and handsets that include PEARL JAM's special fans content. Also Orange France has used this marketing strategy and offered Johnny Hallyday's new Funtone "La loi du silence" exclusively to its users. For a snip check this video.

Jamba: 3rd Party Players Promoting Ringback Tones

Last week I was talking about the need to increase mobile subscribers’ exposure and awareness to the ringback tones service by opening it to the content off-deck market; i.e. to enable 3rd party retailers and content providers to offer ringback tones content at their portals. The outcome will be more places for users to acquire a ringback tone (both at operators’ portals and at the content providers’ own websites).

When the ringback tones service was launched for the first time ever in South Korea back in 2002, both operators and 3rd Party players made their own heavy promotion. This was one of the main reasons for the high user penetration rates the ringback tones service hit in those regions.

Today we have a great example of first steps taken in this direction. Jamba, a mobile content provider, has started to promote T-mobile’s and Vodafone’s ringback tones check out this video). For now, the figures are very promising and if this cooperation will succeed, this model will be implemented in other markets as well.

Let’s hope this will encourage more operators and content providers to join hands and work together to promote the ringback tones market.

   

Relevance Marketing - The Messengers

Sony Pictures is a great example of clever segmentation of target audience and a great example of leveraging segments’ needs and behavior to promote a new product; in this case, the upcoming thriller movie "The Messengers".

According to The Hollywood Reporter:

“To promote the upcoming supernatural thriller "The Messengers", Sony Pictures has included in its dossier of digital-marketing tools a ringtone only young consumers can hear.”

"The ultrasonic ringtone -- ringtones that are audible to teenagers but not adults -- are a featured aspect of the film's promotional campaign, which is geared toward a teen audience.”

Understanding youth’s need to belong to a peer group and the place the mobile phone holds in the lives of youth as a tool to make a personal statement about themselves, Sony Pictures is promoting its new movie through a ringtone that only teens can hear. Besides having a thematic relevance to the movie since “the movie's story line about a young female protagonist insisting she hears voices that her parents cannot hear”, the ringtone has huge relevance to youth’s psychological and behavioral needs.

And Sony Pictures don't settle down with just ringtones to promote the movie,

“Along with the thematically-integrated ringtones and online interactivity, Epstein [executive director, worldwide digital marketing strategy, Columbia TriStar Marketing Group] also noted a blog on the Weblog community Xanga and an eventual 1-800 number as other communicative features tied to the film's marketing efforts. The hope is that it feels like one continuous conversation with Jess [the main character in the film] -- you see her profile on a social networking site, you call her and IM her -- as she draws you into her current situation," said Epstein, noting the intent of the campaign is to have users transcend a couple of digital mediums.”

And if you're interested in more about relevance marketing and youth - here's a link and my previous thoughts about the ultrasonic ringtone.

Ringback Tone Market Challenges (Part II)

Last Tuesday I was reviewing the challenges which the ringback tones market has been coping with. If you missed it, here's the link, and in short:

On one hand:

• After a tremendous success in Asian markets, ringback tones are starting to have wide availability in other regions of the world.
• Most operators already offer a ringback tones service.
• Analysts are forecasting ringback tones market growth.

On the other hand:

• Ringback tones subscribers forget to re-purchase content.
• Operators can’t afford to promote the service on the long run.
• Ringtones’ success hasn't been leveraged.
• There is no ringback tones generic brand.
• Content providers are not “incentivised” to push ringback tones.

At Comverse we believe that this can and needs to be changed. Comverse's vision is to open the ringback tones service to the content off-deck market, i.e. content aggregators (like Jamster,Blinko, Moderati etc'), content providers (like MTV, Warner Brothers etc') and music Labels, regardless of platform vendors. The Cross network openness will enable 3rd party retailers and content providers to offer ringback tones content at their portals. The outcome will be users' ability to register and purchase content both from the operator and the content providers own portals.

By doing so, it increases mobile subscribers’ exposure and hence awareness to the ringback tones service and contributes to generate substantial additional revenues for both operators and content B2C players, thanks to more ringback tones users and more ringback tones downloads. In other words, all players need to join hands to promote the ringback tones content.

Youth Mobile Trends Summary

Hi everyone,

Many have asked me to summarize the very interesting and value-added knowledge resource published here during November; so here are the links to the mobileYouth interviews:

• Nick Wright on: What is Mobile Youth?
• Jan Kuczynkli on: Mobile Music and Youth
• Savka Andic on: Mobile Marketing and Youth
• Nick Wright on: Mobile Services and Youth

Enjoy! :)

Phil Taylor on Mobile TV (Part II)

Thursday is here together with the second part of the interview about mobile TV with Phil Taylor, a director at Strategy Analytics, an analyst and a regular speaker at industry conferences.

Let's welcome Phil :)

Hi Phil, thank you for visiting Xellular Identity :) How are you?
I’m great thanks.

Who are the mobile TV consumers? What is their buying motivation?
At the moment, mobile TV consumers are mostly classic early adopters between the ages of 18-30 and male. In Italy, where DVB-H services were launched in time for the World Cup Tre claimed to have signed up 111,000 customers to DVB-H services in the first six weeks of operation with the demographic primarily men, aged between 25 to 54. The chief executive of 3 was reported in the International Herald Tribune as having said "We didn't expect the numbers to be this high, and we also didn't expect the strong growth trend to continue even after the conclusion of the World Cup.” The buying motivation is largely novelty driven, but the idea that the service can be used to fill so called ‘dead time’, spent waiting around between other activities is the primary value seen in the service.

What do consumers think about current mobile TV offering?
We conducted an end user focus group in London during October 2006, which asked participants to test and compare the mobile TV services offered by Virgin (using DAB) and Vodafone (using 3G simulcast). Virgin Mobile TV achieved the highest rating of services. With an overall score of 71/100, Virgin Mobile TV was rated 21 points ahead of Vodafone Live! (50/100) confirming the expectation of dramatically improved overall user experience on a broadcast solution. Around half the participants said they would consider buying the Virgin Mobile TV service based upon their experiences. However users voiced concerns that the Virgin service is only available on one device, and a pretty ugly one at that!

We have also been comparing, contrasting and testing the DVB-H services in Italy. In an effort that is no doubt designed to put pressure on Tre’s pricing and ROI schedule, TIM has gone cheap. Access to its DVB-H service (albeit with fewer channels available) costs only €5 per month, 6 times less than Tre plans to charge from the end of November 06.

You don’t have to be retailing genius to suggest that, for a service as reliant on novelty value and transient viewing as mobile TV, a price point of €29 per month sounds on the high side. No surprises therefore, that our end user survey work also bears this out with fewer than 4% of survey respondents in Italy stating that they would be willing to pay more than €10 per month for access to mobile TV.  Overall though, the quality of TV offered over DVB-H in Milan was pretty impressive and demonstrably superior to the rather scratchy 3G based simulcast services to be found in most European markets currently. As we had expected, coverage issues do need to be addressed to improve the proposition. Weak signals and resulting pauses in transmissions were sometimes experienced either when trying to access mobile TV in-building, or while in built up areas close to tall buildings. Overall however, coverage in the city was satisfactory, although providing access in subways would greatly enhance the value proposition for commuters.

But, despite what we felt was a fairly impressive technical performance given the time since launch, our 36 member focus group panellists were a harder audience to please! The majority felt that Mobile TV would be useful only when travelling and that low levels of monthly usage would not justify the costs. The 6 members of the panel that had subscribed to TuaTV services had done so on the basis of casual daily use rather than the more expensive weekly or monthly plans. On a more positive note, our group did agree that the broadcast services easily beat the 3G based ‘TIM download’ service on almost all satisfaction criteria tested.

What should operators do to overcome barriers to users’ adoption?
Our test experiences have confirmed that DVB-H can provide a compelling usage experience compared with 3G, but that even early adopter consumers are still a long way from being convinced of the merits of the value proposition. This problem seems likely to be compounded (at least in Italy) by that age old challenge, namely weak operator promotions and sales techniques. Mystery shopping around Milan revealed the staff in operator-branded retail outlets to be poorly informed about mobile TV and largely unable to communicate the available offers. Improving here would go along way to helping operators sell more services.

Any examples of marketing best practices?
While Tre seems to be off to a flying start, we believe that the ARPU numbers underlying its user metrics will be less satisfactory. We predict that slow take-up at current prices and the entry of Vodafone will help drive down prices in the coming year and are estimating ARPUs down to €7 per month by 2011. This will certainly place pressure on Hutchison’s ROI schedule for its investment in DVB-H. As TIM’s CEO is supposed to have said recently, "There are reasons to be worried when a Chinese operator starts buying frequencies in our domestic market being ready to lose billions without any business model"! Time will tell.

Thank you Phil for this interview :)

Ringback Tones Market Challenges (Part I)

After a tremendous success in Asian markets, Ringback Tones are starting to have wide availability in other regions of the world, such as Europe and North America. The ringback tones market is also driven by the disposable incomes rising in China, India and Indonesia. Overall, today, most operators already have a ringback tones service and main mobile industry’s analysts are forecasting that ringback tones global demand will continue to increase in the coming 5 years.

However, Mobile operators, persistently looking for new sources of revenues and ways to increase their subscribers’ loyalty, are constantly launching new services and applications. As a result, in many cases, after launching new applications, operators are finding it challenging to focus on the promotion of the service in the long run. Therefore, operators might face scenarios in which the service reaches stagnation penetration wise but also and especially in terms of usage.

On the same time, with an increasing amount of the Value Added Services (VAS) markets moving off portal, different players in the content value chain (content aggregators, content providers and music labels) have taken over both, the responsibility of marketing services to users and as a consequence, part of the revenues they generate. So far, due to technological constrains, this has not been the case in the ringback tones market.

Taking a look at the ringback tones users, there is relatively low consumer awareness to the ringback tones service, partly because there is no ringback tone generic brand. Many subscribers forget to re-purchase content and need to be constantly reminded about their ringback tones since they never hear it. The more ringback tones will be advertised and its access simplified, the more the number of users registering to the service will grow and the more purchasing ringback tones will become a frequent habit. But operators can’t afford to promote the service on the long run.

Taking a look on its older brother, the ringtone market has had a huge success but so far this success hasn't been leveraged to push the ringback tones service. Unlike the ringtones market, content providers are not “incentivised” to push ringback tones.

Comverse's vision for the future of the ringback tones market is to implement the lesson of the ringtones market success, to promote the ringback tones market. I'm sure you're all curious about what it really means and how it can be done - so tune in next Tuesday for that :)

Holiday’s Specials (part II) - Special Events to Promote Ringback Tones

the iPod, accompanied by portable music devices and music accessories were and still are among the most popular Christmas presents. No wonder why Microsoft chose this timing to launch its new Zune

Other players in the music industry have realized that the holiday season in the best timing to increase users’ usage -- You got that one right -- mobile operators. Many mobile operators offer one of my favorite ringback tones features which is the ringback tone gift. This feature enables a subscriber to purchase a content item for any other subscriber and send it as a gift. The gift content item will be included in the personal play list (gallery) of the recipient subscriber and an appropriate notification will be sent to both the sender and the recipient announcing the successful delivery of the gift. If the receiver of the gift hasn’t been subscribed to the ringback tone service he\she will need to activate his\her subscription to the service in order to use the given ringback tone.

At Comverse, we know that about 45% of ringback tone gifts recipients choose to receive the ringback tone gift and activate the service. One of the strongest motivations of this behavior is the trust users have in their friends. In other words, the difference between accepting a gift from a friend and accepting a gift from a commercial entity is confidence.

Having said that, there is one challenge for operators (after acquiring the ringback tone gift feature). The challenge is to educate their users to buy and send ringback tones as gifts, since this feature increases users’ usage of the ringback tones service.

Phil Taylor on The Mobile Music Market

After getting a few email inquiries I decided that the Mobile Content arena could be a great topic for December's coverage. Searching for industry experts I got to know Phil Taylor, a director at Strategy Analytics, an analyst and a regular speaker at industry conferences. Phil will be visiting Xellular Identity and will talk about the mobile content market every Thursday during December (each week on a different service). You don't want to miss it!

Let's welcome Phil :)

Hi Phil, thank you for visiting Xellular Identity :) How are you?
I’m great thanks. Too busy to feel very festive yet, but certainly looking forward to the Christmas break ;)

What got you interested in mobile?
I started off in general telecoms research and gravitated towards the area with the coolest gadgets! Even though a lot of analysis is very technical and/ or business oriented, almost everyone is interested in mobile phones, what they can do and how much they are paying. I like being in a field of research where developments are taking place so rapidly. Although keeping ontop of it all can be a major challenge.

What takes up your time other than mobile?
I like to spend time in the great outdoors. Not always easy when you’re living in central London. I particularly like rock climbing and mountaineering and wish I had more time for them.

Something interesting to share with the world about you?I share my name with the World’s best darts player, Phil ‘The Power’ Taylor. I’m thinking of changing my middle name to ‘The Power’ as well. I kind of like it!

Mobile Music

What are the market size estimates for mobile music?
We think that the market for music services that are distributed over the cell network will be worth roughly $2.6 billion globally in 2010. This doesn’t include personalization products like ringtones or ringback tones however.

A lot of 3G music services have come to market that focus on over the air delivery. Although there are a few exceptions, most of these are struggling to drive sales volumes due to the price differential with online music stores and poor relative usability.

What are the latest developments in the mobile music market?
A couple of developments are taking place. Price competition is taking place, with operator stores starting to drop track prices from €1.50 down to €0.99, or bundling tracks into music oriented subscription packs. At these kinds of track prices, over the air (OTA) music delivery is a zero profit margin service and many carriers are accepting that offering music is less about profit than about branding, providing a use case for 3G, providing value to customers and (hopefully) attracting some customers from other networks.

Who are the mobile music consumers? What is their buying motivation?
People that buy music OTA are certainly not price sensitive, or if they are then their sensitivity is being overridden by a must have now element to their purchase. We think that OTA track downloads are primarily a substitute for spend on CD singles with sales being driven by younger age groups.

What are they dissatisfied with?
Usability of services remains a problem, particularly for services that have not taken a client based UI approach to delivery. High prices, relatively low on-board memory of phones relative to dedicated MP3 players and restrictive DRM are other problems that we hear consumers mention a lot.

What is the future of the mobile music market?
We think that mobile phones are increasingly well positioned to act as media/ music players but that the cell network is not necessarily going to be the mechanism of choice for getting tracks onto the device. Operators need to add allow users the choice of OTA or delivery to the PC and then upload to their mobile from there. This is what Verizon Wireless is now doing with its V Cast Music service in the US and we believe that this approach positions operators best to drive sales volumes and ultimately give consumers what they want.

What are the challenges operators need to face with in this market?

Mobility is not going to command the premium that operators are asking for. Users don’t appreciate that the transport costs and premium charges are tied together in these price points of €1.50 plus per track, they just compare it with the €0.99 they know they can buy the track for on iTunes or from other online music retailers. I think that operators will ultimately have to separate the transport and premium charges again and use this as a means of up selling users onto flat rate price plans or transport plans that are priced specifically for use with music services. In Canada for example, Rogers Wireless is making a podcasting service available. No premium charges are imposed but a $5 per month flat transport charge is required to consume this bandwidth hungry application. The X-Series announcement from 3 last week is a similar example of operators trying to set flat rate transport plans against specific services. Minimizing their exposure to potentially high backhaul/ bandwidth costs then becomes the challenge.

Any examples of marketing best practices?
I’ve already mentioned that we think that V Cast Music is a good example of an operator that’s taking a different distribution and pricing approach to the majority of carrier music download services. It provides choice for its consumers, who can upload tracks from the V Cast catalog to their mobile via PC or via the cell network. What is just as important is that the price for access via PC is competitive with other online retailers, with tracks sold at $0.99. Over the air delivery is more expensive, and rightly so.

Thank you Phil for being here today!

Don't forget to tune in next Thursday for the second part of the mobile content coverage. Have a great weekend!

Holiday’s Specials (part I) - Holidays' Offers

With the holiday’s season in sight, this month I’m going to cover a few case studies of mobile operators’ success in leveraging the holiday season to promote their ringback tones services.

The holiday season has always been a great time for operators to promote their mobile services and mass activate them. Today, I want to bring 3 examples of ‘holiday’s special ringback tones offers’ which leverage the holiday spirit to promote the ringback tone service.

This Christmas, the American operator Cingular gave its users 3 free Christmas ringback tones (Answer Tones). Giving a free trial is one of the best ways to expose users to new services; However, Cingular provided its users with 3 ringback tones. -Why 3 ringback tones? -First because 3 different ringback tones made sure that users would find at least one suitable ringback tone for then and adopt the new service. Second, because Cingular hopes that users will download the 3 items and later on, after the holiday season is over, the need to change the ringback tone will become relevant for all the subscribers and all 3 items(!).

Amena (Orange Spain) distributed cards at points of sale and hot spots which promote local theme tones during special events and public holidays (like Fallas in Valencia, Feria de Abril in Sevilla etc’). Users just needed to send an SMS to get the free ringback tone (DiverTONO). You can see the pics here.

 

And, in order to get the New Years Eve special holidays’ ringback tone (of 2006), T-mobile Slovakia’s users were asked to send an SMS to the number ‘2006’. That was a very easy number to remember!

All three operators mentioned here understood the importance of timing, i.e. the holiday’s season, to massively promote their ringback tone service with a suiting holiday tune (which later will be needed to replace hastly).