Xellular Identity - All About Mobile Content & Marketing

Super Tuesday - Super New Mobile Apps!

A big day like today brings cool new mobile apps!

First, let me share my own news:

As you know, I recently joined MyFrame Inc., who offers you a cool new mobile application called Flixwagon. For those of you who don't know what Flixwagon is, Flixwagon enables anyone with a capable 3G/WiFi mobile phone to broadcast live videos to the internet.

So you're probably saying, "ok, new mobile gig, where's the news?". We partnered MTV. Today, MTV's street journalism team will broadcast from 23 states to ThinkMTV using Flixwagon. Throughout the day, MTV will regularly break into programming and showcase news features from the live reports.

James Whatley from SpinVox shared that that SpinVox has partnered with WNYC Radio to enable greater listener interactivity during the station’s ongoing coverage of the multi-state primary Super Tuesday. Voters will be encouraged to contribute thoughts, comments and observations by speaking messages to a special phone number set up for the radio station. Those messages will be converted into text by SpinVox and will dynamically become a part of the coverage in real time. Hockenberry and Udoji will report on voter sentiments and read select text on-air.

Interesting to see how new means of communication take part in one of the biggest political events. Will follow closely.

Chating with the Guru

Last week I had the pleasure of chatting with the Symbian Guru, who is also a dear friend of mine, a.k.a. Ricky Cadden.

The topics ranged from creating and sharing media to how exactly our mobiles fit into our lives, and how they might help us connect better locally. Our conversation is now available as a podcast so go over to Ricky's to listen to it.

Coming Soon: Multimadia Ringback Tones

Real announced at the CTIA conference it will supply wireless operators with multimedia ringback tones. The Multimedia ringback tone takes the very popular musical ringback tone service to a whole different dimension, from the audio space to the visual video clip arena. It allows you to set a video clip to entertain your callers while waiting you answer their call.

"Building upon Real’s pioneering success in Ringback Tones (RBTs), Real is making Multimedia Ringback (MRB) Services available to mobile operators around the world.  This new 3G mobile service—first launched with Korea’s SK Telecom earlier this year—ushers in a new level of personalization in RBTs, allowing subscribers to incorporate audio, images and video to deliver a unique, customized experience to callers before they are connected."

[via press release]

Related stories: A Jump Into the Future - Multimedia Ringback Tones

Mobicious Introduces Free "Make My Ringtone" Feature

One of the most successful mobile content types, leading in service penetration and $$ is the ringtone. Since it was introduced back in 1998 by the Finnish mobile operator Elisa, ringtones struck the world hard, leaving hardly any objectors who haven't changed their default ringtone (or at least scanned through the preloaded default ringtones gallery).

Today, almost 10 years after the first launch, there is still a huge demand! According to Strategy Analytics the future for ringtones is still very bright:

   

Lately there has been plenty of commentary since Apple’s September 5th announcement, unveiling the ability for iPhone users to purchase and customize ringtones from iTunes for an additional 99 cents. Buying more than a handful of ringtones would get expensive, but it’s still a better deal than the typical $3 ringtone for other phones.

For the rest of us who don't own an iPhone, now Mobicious enables you to create a custom ringtone for free. While several companies have offered ways of doing this with expensive PC packages and hard-to-use websites, Mobicious have developed an easier way.  On the Mobicious site, you’ll now find "Make My Ringtone", a new feature that allows you to take your own music and make a custom ringtone from your favorite song.  It's fun, free, and works on all major U.S. carriers including Verizon. Simply select an MP3 from your desktop, choose any 20 second clip, and send it to your phone.

[Thanks David!]

Related Stories: Mobicious: One Part iTunes, One Part Google

Myxer & Amie Street Team Up

A few months ago I interviewed Myxer people about their line of business. Today Myxer announced a new partnership with Amie Street to mobilize their priced-by-demand ringtone service.

According to the press release,

"AmieStreet.com is bringing its community pricing model to the ringtone market, and for the first time offering ringtones at multiple price points based on their popularity with members. AmieStreet.com is the first digital music store where members of the community drive the discovery, promotion and pricing of music. All ringtones on AmieStreet.com will start at a price of zero cents. As more people purchase a ringtone the price rises, capping at $1.99. The dynamic prices on AmieStreet.com allow fans to buy music without breaking the bank and serves as a useful tool for finding great music, often for free."

For the entire press release click here

One of the barriers many user generated based communities have is the lack of high quality of content (not everyone is talented like Andy Mckee or heart-stirring like Tasha and Dishka). What I liked in this newly partnership is how they dealt with this barrier, how the two partners complement each other's lacks; AmieStreet, brings the content of independent artists who wish to sell their songs online, and Myxer provides the platform to mobilize this content. And the cherry on top is the community essence provided by AmieStreet's pricing model where prices of ringtones are determined by popularity of downloads. Nice work!

Related links: Amazon Leads Investment in Music Site AmieStreet (NBC)

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]

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.

Back to Nature: Roaring Ringtones

Last week I was amazed by the creativity of Singtones and wondered what more can be offered in this so crowded market of ringtones. The blog reader and Outreach Coordinator Tammy Monroe of Conservation Calling LLC pitched in:

Want a Lion's roar as your ringtone? How about a Frogs Chorus? Conservation Calling offers ringtones (for $2.49) and wallpapers ($for 1.99) to personalize your mobile phones with a wild nature theme. The company contributes 10% of its net revenue to American Forests' Global ReLeaf campaign. Every dollar donated plants a tree. Unfortunately, the service is only available in North America so I wasn't able to get my Dolphin ringtone...

Great cause! Thanks Tammy!

Pimp My Ringtones

You'd probably think "hey, what more can be offered in a bursting market of $9 billion of ringtones?!" But creativity has no limits -- my dear friend Russell Buckly of Mobhappy writes about a new personalized ringtone service called Singtones.

"Singtones offer the ultimate ringtone customisation, even more so than Orgasmatones (whatever happened to them?) with the added benefit that you wouldn’t be embarrassed if your Mum heard it.

Singtones offer you the ability to record your very own version of a well known song. Then the software “fixes” those with dodgy or tone deaf voices, so everyone can get a good result. The cost? A mere £1.50 ($3)."

So, what is next...?

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! :)

Enriched Ringback Tones Offering With Non-Music Content

When you think of ringback tone, the first thing that probably pops into your mind is a personalized music played when you wait for the person called to answer. Last week I came across creative thinking of what can be nice to hear while waiting:

The Indian mobile operator Hutch enriched its ringback tone portfolio with a few creative non-music content categories (apart of the natural/default music category):

• One of the categories offered by Hutch is playing cricket scores for callers. Once Cricket Callertunes are enabled, it will play cricket scores on match days, and even carries a stadium jingle followed by the match details. When the day's play is over, Cricket Callertunes will automatically get disabled and the default Callertunes will be activated. On the next match day, Cricket Callertunes will automatically be re-activated and so on. [No need for me to spell it out how these so frequent updates generate $$, right? ;)]
• The second category offered by Hutch is called “Busy Callertunes”. Once it is enabled, callers will know that you are unable to take their calls. You can set an appropriate Busy Callertunes to tell when you are in a meeting, at the movies, have low battery, or on a holiday, without answering the phone (activation is made by sending SMS).

This is a great example how “thinking out of the box” can help operators build a creative and wider offering which attracts many more users to the service. And I’ll end this post with the TV commercial of the Cricket Callertunes - enjoy!

Frank Dickson of iSuppli: Content Will Be the Battelfield

Hi all,

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.

Frank has over a decade of industry and market research experience. In his most recent prior role, he was Senior Director of In-Stat’s Convergence Groups and responsible for the firm’s multimedia and convergence research. His coverage included multimedia services, content, equipment, infrastructure, and residential connectivity, and semiconductors. Frank has a Masters Degree with Distinction from The American Graduate School of International Management and an MBA from Arizona State University. He also holds a Bachelors of Science Cum Laude Degree in Operations/Production Management from Arizona State University.

Getting to Know Frank

Hi Frank. Thank you for visiting Xellular Identity :) How are you?
Life is good. Thanks for asking.

What got you interested in mobile?
Greed. Whoops. Did I cross the line from honesty to transparency?

Wireless subscribers are measured in “B’s” as in billions. hat type of market size means that a whole lot of people have a lot at stake and are willing to buy research. 

What takes up your time other than mobile?
I live in Arizona with 360 days a year of sun shine. Time for me is spent in sporting activities or watching my son play baseball. It is not a life as exciting as 007, but I like it all the same.

The Market of Mobile Content

How big is the market for mobile content and entertainment?
REALLY BIG! Try almost US$20 billion worth of big. Music alone with its multiple usage applications will almost reach US$9 billion.

Which important trends are shaping the mobile content market?

1. Growth in ringtones & Ringtunes is slowing. Asia and Europe are maturing, while heady growth rates in North America moderate. Continued growth in mature markets will migrate to product extensions of ringtones and development of full-track download and streaming music services which will take time to develop. The growth opportunities for digital music across all categories are shifting to the emerging mobile markets: Latin America, Eastern Europe, Middle East, Africa and developing Asia. 
2. Mobile gaming growth is slowing significantly, particularly in Asia. However, North America remains a growth market. Furthermore, game quality is improving with new advanced 3D graphics technology in handsets and multi-player gaming capabilities. The opportunity to expand the market relies on broader awareness for the core segment of casual mobile games, and development of new gaming segments. Developers and operators need to focus on leveraging the unique characteristics of mobile gaming: mobility, connectivity and location.

How significant contributor to the overall revenue is the mobile content expected to be in the future?
How significant? It seems to be the battlefield will be centered on content. The markets for mobile premium content, including music, video and gaming continue to drive operator data revenue.  Messaging continues to be a strong market as well, with dramatic growth in North America. 

Operators are looking to mobile content and other value-added services for 1) Revenue growth and 2) churn reduction. As the operators are the primary mobile distribution channel, content providers, application providers and technology providers need to focus on these two objectives.

Voice ARPU declines accelerated in the quarter for most of our profiled operators. Across the 20 key operators, Q1 2007 aggregate voice ARPU declined 6% sequentially compared to Q4 2006. Voice ARPU declines were mixed among operators on a worldwide basis with some seeing slight increases while others were down. Meanwhile mobile data ARPU increased sequentially by 1%. Overall, most of the global operators saw Data ARPU growth. Data ARPU is particularly strong among North American operators, where both messaging revenue and mobile multimedia content are seeing strong growth.  Across all the operators, nearly 20% of revenue is now associated with data. Three of our tracked operators get over 30% of revenue from data: SK Telecom, NTT Docomo and O2. Aggregate subscriber growth slowed to 3% sequentially in Q1 2007, down from sequential growth of 6% in Q4 2006.

Thank you Frank! :) Don't forget to join us next Sunday for the second part of this interview.

Levi's Goes Mobile

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

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

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

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

[Via Levi's]

Update: Nokia: A New Flagship Concept in Israel

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

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

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

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

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

Nokia: A New Flagship Concept in Israel

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

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

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

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

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

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

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

 

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

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

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

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

[via Cellular News]

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

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

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

Well, let's welcome Seamus:

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

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

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

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

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

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

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

Sprite Ventures Into Mobile Social Networking

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

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

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

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

[via press release]

Switch!

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

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

And thanks John for the link!

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

Hi all,

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

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

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

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

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

[via M:metrics]

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

Getting to Know Seamus

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

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

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

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

The ringback tones' Consumers

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

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

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

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

The Filter: Explore Your iTunes

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

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

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

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

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? :)

Traveling Abroad? Try Steape Mobile Translator

If you have been traveling around the world, you may need some help with communicating in different languages of wherever you may be. So, here are some good news:

Another player has entered into the mobile translation apps scene this week, this time it is a Dutch company called Steape who brings to the US and UK markets a mobile translation service that has been very popular among Dutch travelers.

Steape offers three: Mini-Speaking Dictionary, Steape Travel and Steape Knowledge. The Mini-Speaking Dictionary consists of 500 traveller-related words. Steape Travel contains nearly 100 phrases covering travel-related topics: Chat basics; Travel & Go; Small Talk; Overnight Accommodation; Money; Shopping; Flirting & Dating; Going Out & Sightseeing; Eating & Drinking; Help & Health and Service & Communication. Steape Knowledge is composed of useful basic vocabulary, such as numbers, days of the week etc., and is free when another product is purchased. The translators currently work on 138 mobile phones types, and the list grows continuously.

As a traveler at unfamiliar language surroundings, all you need to do is find the particular phrase you want to say on your mobile phone, press the action key and the phrase is played through the speaker of your mobile phone.

Steape costs USD 5.00 or £4.00, a reasonable price if compared with a phrase book.

[Via press repease]

 

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.

mobileYouth: A New Website

mobileYouth, a part of the Wireless World Forum, has a new look for their website. After getting the word from Josh I looked around and there are two things which are really worth the time to pay a visit:

• mobileYouth people now present videos from "on the street" interviews they run with teenagers. Many players in the mobile industry (and elsewhere) try to target this segment, but what do we really know about it...? This is our opportunity to watch, listen and learn.
• A series of podcasts covering the topics of teens, mobile, marketing and more...

And here is one of the videos about what youth think of mobile marketing. Enjoy!

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.

Klonies For Adults? -Yes!

I was reading some very interesting bloggers' opinions about the Klonies service at Skype by Jean Mercier and by Phil Wolff and wanted to answer both. As my comment was becoming longer and longer, I decided to post it here and offer a bonus - Klonies pics!

Before actually addressing the points raised by both Jean and Phil, let me provide some background info for those of you who are not familiar with Klonies; Klonies 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.

Both Jean and Phil talk about the workplace and the adult Skype users segment; both raise a certain feeling of discomfort with the young looks of the Klonies; this feeling is associated to the older users (of Skype and in general).

As a member of the Klonies team at Comverse, let me share some insights: at a trial we had at a European TIER 1 mobile operator a few months ago, we received very enthusiastic responses from young adults (19-24) and adults (25 and up) participating the trial. Both young adults and adults participants replied that they find the Klonies content to be appealing and fun to use and that they would be willing to pay for this mobile service.

As for the Klonies looks, yes, Klonies are good looking and juvenile, as they are primarily targeted to the youth mobile market. Klonies are good looking as they are our alter ego, our “wanna be web\mobile persona”. Klonies are also means for playing with our identity. Over the web we can “try” different characteristics as if they were different outfits (or costumes), we can express hidden parts of our personality that we don’t expose in daily life, such as our desires.

As for "rugged", "mature", "experienced", "damaged", “fat” avatars, the question is who would want to have his exact body shape and look to be his\her web representation? Imagine yourself this situation: I’m a very cool teenager but my face is all covered with pimples. Would I want my avatar to be polka dotted as well? -of course not! Would I want to have a button that adds zits to my avatar’s face? -no!! Nobody thinks zits are a good way to promote yourself. We all prefer to show an improved image of ourselves. If an “add a zit" option exists in the avatars building studio, and I’d deny its existence because I want my avatar to look cool and hip (who wouldn’t?!), my friends would say I’m lying about the way I look. The bottom line is that no button that adds flaws is welcome in avatars world. Better not have this possibility\option.

And last note about the Klonies looks - we are working on different skeletons to address different market tastes:

Also, different cultures have different conventions of how to present our body and how to pose:

 

Thanks Jean or sharing your thoughs and Thanks Phil for raising great ideas (I tried to reply to all of them at the comments section).

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! 

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!

John White: Mobile Messaging Futures (Part IV)

Welcome to the third part of the mobile messaging coverage. Today, John White of Portio Research Ltd will be visiting here. If you missed the previous parts you can follow these links: Part I, Part II and Part III.

Let's welcome John:
Hi John. Thank you for coming back, how are you? :)
Hi Xen, thanks a lot, I’m doing great thanks.
Today, you're going to share some more insights about the mobile messaging futures
Yes! Here’s what Portio Research has to say about it:

Why has growth been so slow for mobile email?

Once we understand this argument, we can put mobile email into perspective. Set against an installed base of 2 billion plus SMS-capable handsets, mobile email has only just got off the starting blocks. RIM’s BlackBerry is widely accepted as the market leading device of choice for corporate executives who need reliable mobile email, yet after years of pushing these excellent devices into the market, the installed base of BlackBerry subscribers, worldwide, in mid-2006, reached only a little over 6 million. Taken alone, 6 million or more is a great success for RIM, but compared to the 2 billion souls around the world with SMS in the palm of their hands, it’s just a drop in the ocean.

Looking forward perhaps 10 or 15 years, we should see a future where email becomes the unchallenged #1 most popular form of non-verbal communication on the planet. With billions of people connected to the Internet, wired and wireless, email will surely be the messaging format that most people use, but this is unlikely to be a conscious decision on the part of the consumer. By this time, how an individual is connected to the Internet, and which messaging platform they are using won’t matter - and the user will neither know nor care how it all works. Messages - text or images, moving or still, with or without attachments, sound, colour, etc - will be sent and received by any device, any time, any place, with or without wires, and telecommunications service providers, if they are smart, will not burden consumers by even trying to explain how it all works.

But getting us to that vision of the future from where we are now will take some time, and there will doubtless be some barriers to cross along the way. To move towards a point where mobile email becomes the mass market messaging format of choice will require absolutely seamless integration of competing technological standards, in an industry that so far has a poor track record on standardisation. For mobile email to start reaching deep into the mass market we need widespread penetration of email-enabled devices, we need to see simple, transparent pricing and we clearly need effortless interoperability between telecoms operators, not only mobile network operators but also wireline operators and the broader Internet community as a whole.

So it may be a while before consumers all use mobile email, but what about the enterprise sector?

In the short term, mobile email solutions such as BlackBerry will remain popular tools with company executives, and many operators around the world are promoting their own email solutions, and this should slowly help the sector to grow. But as we learned from MMS, it takes a long time for handset penetration to build a critical mass of users, and a long time for a service to penetrate the consumer masses who are more price-sensitive than corporate users.

Further hampering the take up of mobile email in the enterprise environment, corporate IT departments are unclear about how to integrate mobility in the broader world of the corporate IT infrastructure. Should mobility be bought with other IT and telecom services from long standing, trusted suppliers, or separately, directly from the network? Should corporations equip large sections of the workforce with mobile devices, possibly costing a hefty slice of the IT budget, or can companies tap into the devices these individuals already own? If using their own devices, who should pay the bill and how does the corporation control network security? Corporations are understandably concerned about making these decisions, and so far no clear precedent has been set.

Again this presents an opportunity for SMS, and a problem for mobile email. While big companies can afford complete mobility solutions, for many small and medium sized enterprises that simply is not an option. In mature markets such as Europe and North America, the vast majority of employees already have an SMS-enabled device in their pockets. Solutions are available to offer some email functionality to SMS, such as copy, back-up, archive, forward, auto-divert, out-of-office reply and so on. If enterprises could buy into these solutions from network operators at a fraction of the cost of replacing all those handsets, many SMEs might find that SMS has an affordable place in the corporate communications infrastructure, at least for a few years while the industry hammers out the technical barriers to cheap, widespread mobile email for all.

So mobile email has a strong future, but it would be a mistake to expect it to replace SMS for many years yet, probably the best part of a decade. Mobile email will continue to grow year-on-year and big corporations will start deploying large scale mobile email solutions as time goes by, but mobile email for the consumer mass market remains some years away. Hundreds of millions of email-enabled devices need to penetrate the market first, alongside cheap and easy-to-use services, and technical issues around standardisation need to be ironed out before they have a chance to put people off. Remember ‘you never get a second chance to make a good first impression’. 

And where does that leave mobile IM?

Yet again we find it’s pretty much the same story for mobile IM, plus or minus a few subtle differences. Again mobile IM requires market maturity to make a big impression on the messaging industry globally. Hundreds of millions of IM-enabled handsets need to penetrate the market, interoperability agreements need to be in place and operators need to work together to ensure standardisation and the removal of technical barriers. Much of the promise around mobile IM lies in the argument that hundreds of millions of individuals already use IM services on their PCs, and these people are likely to switch effortlessly to using IM on their mobile handsets instead.

While this may eventually happen, this theory relies on a number of factors. For one, maybe these people use IM on their PCs because they sit in front of a PC all day anyway, so that’s unlikely to change. Secondly, IM on the mobile handset needs to be a perfect replica of the desktop experience, or better, in order to attract users away from a cheap wireline broadband connection to a more expensive wireless connection. Facilitating this experience will mean network operators, handset vendors and IM heavyweights such as AOL, Yahoo and MSN working closely together to ensure standardisation of handset display configuration and so on. Finally, true IM requires presence awareness in order to function as it does in the desktop environment. For operators worldwide to deploy fully IMPS (Instant Messaging and Presence Services) compliant IM services and have those service fully interoperable around the globe will take some time, and until that happens, without presence awareness, IM offers little more utility to end users than good old SMS, which everyone already has and already knows how to use.

As markets move forwards mobile IM is likely to gain increasing popularity in certain countries, such as the US and some big Asian nations, where desktop IM is already popular. For hardcore users IM is likely to be cheaper than SMS, but in strong SMS markets, such as Europe, operators will keep SMS prices low and IM prices less competitive. Cannibalisation will inevitably happen at some stage, once all-IP based networks penetrate the mass market and IMPS improves the functionality of IM, but until then SMS is likely to continue to wear the crown.

Thank you John for this interview, it was VERY insightful! :)

Tune in next Sunday for the my next visitor!

Pulse Mobile's 3D Mobile Avatars

Pulse Mobile, a San Francisco company that lets you send mobile messages with an animated avatar, has raised $7 million in a second round of financing according to PEHub.

Since last December, Cingular users can use Pulse Mobile’s “Veepers” in order to create an animated avatar and send it to friend's mobile phone or email address. Users can upload a portrait photo or pick an image from the gallery. Then, the image turns into an image with 3D animated qualities. Users can direct their avatar to nod, shake or wink and choose what kind of accent the avatar speaks the message when it is delivered to friends. Finally, friends will receive a fully animated personality delivering the chosen message with voice by MMS. To get a sense of how Veepers works click here

Little by little, we see more players populating the mobile avatars arena. The fact that investors believe in the avatars market and are putting the $$$ in it - is very good news for the entire world of avatars! GO avatars!

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…

John White: Mobile Messaging Futures

Welcome to the third part of the mobile messaging coverage. Today, John White of Portio Research Ltd will be visiting here. If you missed the previous parts you can follow these links: Part I and  Part II.

Let's welcome John:

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

Today, you're going to share some insights about the mobile messaging futures
Yes! Here’s what Portio Research has to say about it:

Many in the mobile industry feel that MMS, mobile email and mobile IM have somehow failed as messaging platforms and that SMS, though it seems to pain people to admit it, is the only truly successful mass market messaging format. However, this is not the case, while SMS is a truly staggering mass market phenomenon, these other messaging formats have not failed, they have simply failed to match up to the runaway success of SMS.

For some reason SMS has become a ‘dirty word’ for some people, analysts don’t like to talk about it, mobile operators don’t like to focus on it, and no-one treats SMS like it’s sexy any more. It’s as though SMS is “old” technology, as if it no longer deserves any credit, it should be consigned to the history books. This is crazy. Worldwide, SMS still accounts for approximately 75 to 80% of all non-voice service revenues, SMS traffic volumes are still growing at a breath taking pace and as worldwide subscriber numbers climb from 2.5 Bn to 4.5 Bn over the next 5 or 6 years, SMS is the only non-voice service likely to gain widespread acceptance among the majority of these new mobile users.

Worldwide, SMS traffic hit 1 trillion messages in 2005, and that figure is set to reach over 3 trillion by the end of 2011. Set against that backdrop, of course other messaging formats look small. But MMS has not failed; worldwide MMS traffic touched 14 billion messages in 2005 and is forecast to pass 115 billion by the end of 2011. These are not small numbers, and while they are only a fraction of the volume that SMS has achieved, MMS should still be seen as a great success.

So if MMS is a success, why has it not replaced SMS?

MMS has not failed; the industry had totally unrealistic expectations of MMS in the first place. MMS was hyped as the natural replacement for SMS, but that shows a misunderstanding of SMS and the reasons why SMS has been such a big hit worldwide. SMS owes its success to its simplicity. It is the quickest, easiest and cheapest way for two people to communicate a short and simple message and as such it serves as an extremely useful communications option that is affordable universally, even among some of the lowest income groups of society.

MMS, on the other hand, has been misunderstood from the start. MMS should be seen more as a mobile entertainment service than as a messaging service. MMS is more complex and expensive than SMS, so consumers are unlikely to use MMS to communicate a simple message, when SMS does the job so quickly and easily and costs so little. MMS will always look like a failure when compared alongside SMS, yet when you consider MMS in its own right, as an entertainment application and content delivery tool, then MMS can be seen as a very popular and successful service.

Why has growth been so slow?

MMS struggled to gain ground between 2002 and 2004 primarily because the service was not fully supported and the necessary equipment was not in widespread circulation. At the time of launch, MMS-enabled handsets, with GPRS support, colour screen and camera included, were comparatively expensive, and many networks launched services amid an array of complex tariffs. MMS was often charged according to the size of the message (per-KB) which left end-users confused about costs and created the perception that picture messaging was expensive.

Further problems were caused by a lack of standardisation among handset vendors, leaving screen display for MMS messages unreliable, and a lack of signed interoperability agreements between network operators further hampered the potential growth of MMS services. Add all this together and throw in a complex user interface and it is hardly surprising MMS got off to such a slow start. The industry failed to understand that until the penetration level of MMS-capable handsets reached a certain critical mass, widespread use of the service was never going to happen.

Only now is MMS growing in popularity since all networks are fully interoperable, colour-screen cameraphones are in widespread circulation and MMS tariffs are now cheap and transparent. Compare this to SMS: worldwide there are approximately 2 BILLION SMS enabled handsets in operation, it’s cheap and easy to use, widely supported in almost every corner of the mobile world and there are hundreds, perhaps thousands, of services and applications that utilise SMS as a communication medium. That is why SMS is so popular, and why MMS has taken so long to take off.

Thank you John for this interview. Wanna read more about mobile email and mobile IM?? Tune in next Sunday! :)

New: Klonies Predefined

Hi everyone,
As I was getting some emails asking about the Klonies and how things are going with them, I decided to dedicate a few of my posts to this ever so interesting phenomenon, and to the ‘making of Klonies’ in particular.  I began with the content, how do we know what people would like etc’ and followed with an illustrated description of the process of the design and draw.

If some of you have missed the previous posts, here’s a quick reminder about what Klonies is: Klonies 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.

Today, I wanted to share some good news: Klonies has a new type of content - the ‘predefined pictures’. Showing around the Klonies at many sales meetings and conferences brought up a lot of reactions; many people love the process of selecting body, hairstyle, clothes, backgrounds etc’ while others want to keep pictures we made for the demonstration as they are (“can I keep it?”). This made us think… Some people want to have the full experience of selecting and making while others just want a ready to use picture and would love to adopt something predefined, so why don’t we offer both kinds???

And thinking about it a little longer brought the following idea: if users select from a predefined library of pics, why should we limit them only to our Klonie, Klone or Klonster? We can offer a vast variety of other cool picture as well.

With this thought in mind, our designers hit the designing board and started to draw some sketches. After a few shots, this 3 types of content are the first to be brought to you:

Psycho Pets

Urban junkies

A selections of babes

Check it out Klonies at Skype. After selecting a body, press the red tab called ‘Picture’ to see the entire library of content. Let me know what you think of it!

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!

John White on MMS (Part II)

Welcome to the second part of the mobile messaging coverage. Today, John White of Portio Research Ltd will be visiting here and covering the MMS. If you missed the previous part you can follow the link.

Well John, the stage is all yours! :)

What is the value of MMS?
MMS generated approximately $15 Bn USD in full-year 2006, and our new “Mobile Messaging Futures 2007-2012” forecasts this rising to almost $34 Bn USD by the end of 2012.
Market size estimates Worldwide, MMS traffic volumes in 2006 reached a little over 27 Bn messages, which demonstrates remarkable growth of over 90% form the year before…when we recorded total SMS traffic at 14 bn messages worldwide for the full-year 2005.

How big is the market for MMS?
We forecast this market to continue growing healthily for several years to come, contrary to some reports than “MMS is all-but-dead”, we disagree and we see MS traffic volumes growing to reach over 131 Bn messages worldwide by the end of 2012.

When will MMS penetrate the mass consumer market?
We believe that the entire mobile industry has misunderstood MMS from the start, including most of the operators who have been working hard to drive higher adoption. MMS was sold from the start as this great successor to SMS, but that shows a complete misunderstanding of what MMS ad what has made SMS such a popular service. As explained previously, SMS owes its success to it’s utility and simplicity, it is useful, cheap, easy, quick and almost effortless. MMS is entirely different, it offers little additional utility over SMS, costs several times as much and is more time consuming and complicated to use. If anything, that makes MMS LESS useful than SMS, as a service, so why would consumers want to pay MORE to use it? We believe MMS should be seen in its own right as an entertainment service and as a premium content delivery mechanism, not as a messaging tool. SMS is all the messaging many people need, and what MMS offers is something else, something fun, the chance to send pictures to your friends…this is nice, but it is rarely an essential activity, the way many SMS messages are. As long as everyone keeps expecting MMS to follow the success of SMS, they will continue to be disappointed, but once the mobile community stops linking the two together and looks as MMS as a separate service, we can that it is a highly successful application.   

What should operators do to overcome barriers to users’ adoption?
Reduce prices, drastically. SMS is priced, in “most” markets at a price level that most people don’t have to think about. Most people just keep sending SMS messages without thinking about the cost. Once MMS can be priced at a level that people can exchange several picture messages per day without giving the cost a thought, then traffic will grow, rapidly.

Thank you John for this interview. Don't forget to tune in next Sunday for some more talkin' about mobile messaging  :)

The Making of Klonies - the Design and Draw

Last week, Ronen Ventura and Tali Perel shared some insights about research, styling and analyzing usage as preliminary stages of creating the Klonies content. Today, continuing with 'The Making of Klonies', I want to review the process of (actually) making Klonies content - the design and draw.

Deciding on a subject, theme or style (events, seasons, local culture, age group), was the first stage described in the previous post. Then, the Design and Graphics Team, which includes Ronen Ventura, Oryan Ventura and Al Toiber, take the lead. First, the team gets together for some brainstorming. After throwing ideas to the air and discussing them, each one takes a few items and hits the designing board.

To better explain the process, I’ll demonstrate using some Klonster sketches made by Al.

A. Theme - Klonies special for Halloween.

B. Item - an outfit (entire body and not only a shirt or only bottoms) of a Dracula costume.      

C. Al begins with a Klonster skeleton that looks like this (see figure 1a):

[Figure 1a]

D. First, Al makes a preliminary sketch for approval of concept (see figure 1b):

[Figure 1b]

D.1. After getting an approval, the next step is drawing a preliminary design (see figure 2a):

[Figure 2a]

D.2. The preliminary design receives more detailed comments (see figure 2b]

[figure 2b]

E. Last step is the implementation of the given comments, some corrections and final touches (see figure 3):

[Figure 3]

And here's the Klonster, all dressed up and ready to go (see figure 4):

[Figure 4]

And that's how a Klonies outfit is being made! Next time you'll browse the Klonies collection at Skype you will be able to evaluate the process that lies behind each item! :)

A Jump Into the Future - Multimedia Ringback Tones

Hi everyone,

Today I wanted to share with you a new and sexy service that according to one of the Product Managers at Comverse will be the natural evolution of the ringback tones. To do things right, I'll begin at the top :)

Once, there was no choice but to hear a dull ‘ring ring’ when you waited for your friend to answer the phone. Now, follow this carefully: Tomorrow, you place a video call to your friend. Suddenly the amazing top hit by the new hip-hop group The Beatz will fill your mobile screen. You are enjoying a great top 10 video clip until your friend answers the phone. Wouldn't that be a better way to wait?

The Multimedia ringback tone takes the very popular musical ringback tone service to a whole different dimension, from the audio space to the visual video clip arena. It allows you to enjoy watching a video clip while placing calls, as well as to entertain your callers with video clips to watch while calling you.

Sounds great? I haven't said the final word yet, which is content. There are 3 types of optional content:

• Users' content - music clips, Klonies customizable avatars, self generated content, corporate content... All depending on the segment.
• Operator content - branding (logo), promotion info, operator prompts.
• Advertisement - advertisers fund phone bills in return to placing ads at the multimedia ringback tones space. Less desirable for the callers, but it's an option.

We all know that personalization is a key growth engine to mobile services and applications and it will probably keep being a key factor in the future. Having said that, the multimedia ringback tone leverages the ringback tones' success and promotes the video arena\ tusage of 3G. It harnesses the human need to self express and provides a new and creative outlet for that. Smart!

What are your reactions?

John White on Mobile Messaging

I'm happy to welcome John White from Portio Research Ltd to review the market of mobile messaging here.

John White is Business Development Director for Portio Research and has over 17 years experience in the technical publishing industry. Working in the IT sector previously and in the telecoms industry for the last 9 or 10 years, John has extensive experience in the mobile sector.

Hi John. Thank you for visiting Xellular Identity :) How are you?
Hi Xen, thanks a lot, I’m doing great thanks :)

How big is the market for mobile messaging? What are the forecasts for the mobile messaging market?
Mobile messaging is massive, the total mobile messaging market today is worth approximately $80 Bn USD and in 2007 we will see well over 2.2 trillion messages sent back and forth worldwide between mobile devices. SMS is by far the biggest player in this space, with worldwide SMS traffic volumes exceeding 1,662 billion messages in full-year 2006, generating revenues in excess of $47 Bn USD.

As if these figures are not impressive enough, we see SMS growing for some years to reach staggering worldwide traffic volumes of more than 3.7 trillion in 2012, generating a whopping $67 Bn USD in total revenues.

What are the key country markets?
The Philippines have long been regarded as the “SMS capital of the world” and this still holds true, in fact more than ever as recent changes to SMS pricing on the islands has seen traffic roaring through the roof. Elsewhere in Asia Singapore, Malaysia, Australia and China are all hot SMS markets, and of course China takes the crown as the worlds biggest SMS market due to the sheer size of the market overall. The USA is a very hot SMS market and still growing, and in Europe Denmark, the UK and Spain are all aggressive SMS markets. In Latin America, Venezuela enjoys very high usage levels and Mexico and Argentina are strong markets too.

Who are the leading operators in this market?
In the Philippines – all of them! Elsewhere, Maxis in Malaysia stand out, Telecom Personal in Argentina, O2 in Ireland and the UK and Netcom in Norway all enjoy way-above-average traffic volumes when measures on a per-subscriber-per-month basis.

How do you explain the dominant position of SMS as the worlds leading messaging technology?
It’s simple, it’s all about utility, price and simplicity. We have been saying this and printing this in our reports for some time now – SMS is useful, it serves a purpose, it can communicate a simple message from A to B quickly and efficiently at times when a voice call is not so convenient. SMS is easy, cheap, quick and many people think sending an SMS is fun. It is discreet, private, effortless and only takes a few seconds. There is no “downside” to SMS, it serves a purpose, it does the job well and it is quick, cheap and easy – what’s not to like?

How significant contributor to the overall revenue is the mobile messaging expected to be in the future?
We have not specifically forecast ‘messaging-as-a-percentage-of-ARPU’ going forward so I can’t give you exact numbers, but I firmly believe messaging will continue to be the biggest contributor to non-voice service revenues for some years to come. Currently, worldwide, voice accounts for approximately 80% of total mobile service revenues across the globe and messaging accounts for approximately 80% of all non-voice service revenues contributing to that total. AS other services grow then messaging’s dominant position will decline, but we only imagine that happening at a rate of 1 or 2 percentage points per year for the next few years, then perhaps faster once 3G becomes ubiquitous in the mass market.

What promises to sell in the future?
Mobile email, in the long term, but that’s still a good few years away for consumer mass markets.

John White will be here next Sunday for more talkin' about mobile messaging. Thank you John and see you next week! :)

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 :)

What Motivates Mobile Phone Buyers? Self-expression

Once again, self expression is one of the main motivations when buying a new mobile phone. According to NPD,

“What motivates buyers when they choose a new mobile phone? Many factors come into play, of course, but having the desired capabilities and a flip-phone form factor rise to the top most often.

With a couple of exceptions, buyers have ranked these two criteria highest (roughly 40 percent) over the past seven quarters. That’s testament to the fact that experienced phone buyers know what they want in a phone and make purchases based on these factors.
The third most often cited reason for choosing a particular phone is that it is a “good brand,” which again reflects a mature market. Buyers have obviously come to trust certain handset makers over others.”

Also, when drilling down, we see that self expression is rated the highest among the youth age group:

“Age can play a role as well in the purchase of a handset. Among the various age groups, different profiles emerge based on the top purchase motivator. For example, buyers 18 to 24 chose “it’s a cool phone” as their top motivator for buying a handset during the last year. Those 25 to 44 most often chose “had the capabilities I wanted.” And consumers 45 and older chose “flip phone / can be closed” as their top criterion for purchase.

Based on age and the top purchase motivator, three distinct target groups emerge:

• The youngest buyers seek a desirable device that reeks of “cool” (design is key, but the phone has to deliver on functionality, too).
• Young to middle-aged buyers want a wide range of capabilities. Getting just the right combination is the trick, so the device must strike a balance between popular must-have features and those that might just be nice to have.
• For people just past middle age and the older crowd, a solid flip phone will suffice; however, it shouldn’t lack basic capabilities and the brand is still important, too.”

[via NPD]

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