USA vs. Europe on mobile as a channel

I just spent 3 weeks on a round the world trip attending the MPA Digital 24/7 and FIPP Powering Digital Success conferences held by the world’s magazine publishing industry to get a better perspective on where these markets are in their “mobile strategy”. I'll break out each conference and the mobile component in separate posts but for this one in particular I want to comment on the general perceived attitude towards mobile from both the US and UK markets.

During the trip I attended numerous off-shoot meetings and side panel discussions on the magazine industry, where digital content is headed and specifically where does mobile play in all of this? These meetings were busy with attendance from the biggest players such as Hearst and Hachette Filipacchi right down to the niche markets such as the Farmers Almanac. What struck me time and time again is how much mobile was discussed at these events, it’s clear that mobile is “on the radar” and a definite must do. What is not so clear is exactly what this new mobile strategy is and how it can be executed especially when the brands themselves are not yet sure what this holy grail of advertising is.

It seems to me that mobile is currently just another buzz word that agencies can add to their ever increasing digital inventory to remain relevant and up to date unfortunately many are failing to conceptualise on exactly what mobile advertising is. Another thing that struck me is the stark contrast between the European and USA markets and their attitudes towards mobile as another platform.

In general the USA seemed very pessimistic about mobile, with many of the people I spoke to stating they had tried it at one time or another with mixed results. The attitude in the USA seems to be that the carriers are holding the industry back with a number of barriers to entry such as restricted content access, a lack of cross-carrier MMS, uncertainty around data charging, and a disproportionate share of revenue in favour of the carriers, meaning that the current mobile market is a no-go area least the valuable relationship with the brand is put a risk by a poor campaign. As a result anything even loosely related to mobile put into the “too hard basket”, I even had the following email response from a well know VC “Our aversion to the mobile market has to do with the gatekeepers (read: carriers) that clamp down on innovation and require exclusive and explicit permission for any technology more interesting than basic SMS, at least in the US market. “

This to me is a very negative attitude towards an amazing and compelling channel from an otherwise generally positive market towards Internet technologies. I think this in part is due to a successful scare campaign from the carriers, in one instance I heard first hand how a carrier controls the relationship between the publisher and the consumer “unless there is a direct relationship with all tier one carriers in the market we’re not interested” was a quote heard from management at one of the larger publishers. It seems that the carriers have seeded this mindset amongst the content producers that without their help there is going to be a world of hurt for anyone who even considers moving away from a carrier relationship.

I have explained in a previous post why I don’t think carrier relationships are the answer for content producers and even in the emerging USA market I still think these beliefs hold true. The carriers are not the answer and it is up to the content producers to realise that the US mobile market is now in fact mature enough to start experimenting with “off-deck” solutions.

Europe on the other hand is embracing mobile wholeheartedly; again there is a lot of talk about mobile but very little in the way of content publishers trying their hand. All of this seems about to change and if the conference I attended was anyway a benchmark mobile is going to be the targeted delivery channel for branded content in the future. The feeling in Europe is one of optimism and a let’s give it a try attitude, the carriers hold very little weight here and as a result they are introducing tools to make their offers more attractive to the content producers. In particular I saw some great services from T-Mobile offering simple content mobilisation tools for T-Mobile users, where content providers can place a link on their website to mobilise and save the content to the T-Mobile user’s account. When the user logs into their T-mobile "walled garden" they see the mobilised content. This is fantastic initiative and one in which T-Mobile shouldapplauded, unfortunately it still has the effect of watering down the content producers brand and prevents the content producers from moetising this channel through their existing brand relationships.

It will be interesting to see how these markets mature. My feeling is there will come a day in the not to distant future where content producers in the USA will finally realise they are no longer shackled by the constrains of the carriers, then things will really heat up.

Announcing M.E.G.A - Mobile Enterprise Growth Alliance

I'm proud to announce the 2008 launch of MEGA a national government initiative giving specific focus to innovation in the mobile sector. This is a fantastic opportunity for Australia to be recognised as global leaders in the mobile sector.

“Be a part of Australia’s Mobile Industry future

• Do you want in-depth knowledge about the mobile industry?
• Are you thinking of starting your own business?
• Would you like to expand your business to meet the growth of the mobile market?

The mega business incubator program will be held from February to June 2008 in Melbourne, Sydney and Adelaide with the direct participation of Australia’s leading mobile and digital content industry experts.

mega is a hands-on, industry-led program that supports creative, IT and business people to develop new companies, content and/or products for the mobile phone. Join as a team or as an individual (we’ll match you with individuals with complementary skills sets), develop your idea and then pitch it to a panel of telcos, broadcasters, angel investors and industry experts.

Want to get across mobile? Get into mega.

Attend our Call to Action event early Feb to find out more or visit: mega.org.au“

I've been appointed to the Victorian working committee and will be working with the participants to educate them on the opportunities in the mobile space. I'm honored to be a part of this exciting initiative and look forward to helping it grow into something amazing!

For those in Melbourne make sure you come along to Digital Harbour tonight at 6pm for the launch for some great networking opportunities and to hear whats happening in mobile for 2008.

Should I do a deal with a carrier?

With the rise of the Mobile Internet gaining ground, there is a current state of flux for content producers and publishers around the best mobile strategy. To go on deck or not to go on deck that is the question? (A carriers branded mobile portal such as "Optus Zoo" is typically referred to as a deck "walled garden")

Many of the larger content producers already have established relationships with carriers, and have had some degree of success, in fact Sony BMG states that Hutchison globally is their largest seller of online music outside of iTunes.

There is an assumption by many content producers that once I get my properties on the carriers portal I've got it made, then I just need to sit back and watch the cash roll in. There is obvious appeal in this strategy a relationship with a carrier provides, exposure to an audience of (x) million people, a guaranteed user experience and a billing system.

Due to the current lack of decent content there is also currently a fantastic opportunity to strike some great deals if the content is compelling enough, especially if it has an existing audience. I know of two examples here in Australia where the carrier actually funded the production of the made for mobile series in much the same way a movie studio would, that gives you an example of the current climate and strong desire for good content.

So it all sounds pretty appealing and as a result for many producers their entire marketing strategy comes down to getting onto that holiest of decks but more often than not this will end up being the worst possible strategy.

Why don't I think that getting on deck is the best strategy possible?

1. Exclusivity:
   
   
With mobile penetration exceeding 100% in many countries carriers can no longer look for new customers instead the market is now all about reducing churn (preventing customers from moving to a rival network).

This battle is being fought on two fronts, price and content. Obviously reducing price can only go so far before it becomes ineffective and starts to impact on margins so the next best option is great content and this battle is being fought hard.

Carriers believe that content is king and will do what they can to lock in exclusive content rights. In Australia Telstra paid AUS$60million for exclusive Mobile and Internet rights to the AFL, Optus paid a significant amount for a limited window of exclusivity for MySpace mobile (3 months), Vodafone globally for the Rugby and 3 Mobile for the cricket.

This model typically reflects the TV model where a TV network will pay for the exclusive rights to content in the hope of winning viewers, increasing it's reputation for good content, pushing up ratings and funding it all by advertising, this is a proven model and works well in TV land.

Unfortunately this model just doesn't work in the mobile sector, why?, because, uh, carriers are not TV networks and have something called proprietary networks and walled gardens! (AOL anyone!?)

In TV land if Channel 7 has a better show than Channel 9 I just need to change the channel, thats it, no long term contracts, no new handsets, no change of number, no new rate plans, just pick up the remote and push a button. This model works because the networks are open and the consumer can chose their content.

This is not the case in the mobile space, if I want to watch exclusive coverage of the AFL on my mobile I can't just walk into a store and pick up new handset, I have to go through a very painful and lengthy process, sign up to a 24 month contract and promise my first born if I want to cancel!

I put it to the carriers that anyone who was compelled to change networks due to exclusive content did so a long time ago. A typical consumers mobile buying habits are not driven by the content they can access, it's by the type of handset (iPhone anyone?) and price, anyone who thinks otherwise is kidding themselves.

As a result this desire for exclusivity has a significant impact on the ability for the market to access your content leading me to...


2. Exposure:
   
   One point of doing a deal with a carrier is the instant exposure to at least their subscribers right? Wrong! In the majority of cases unless you are an established brand and the carrier has paid good money for your content you will be buried at least 3-4 levels down on the deck, e.g main menu - comedy - stand-up. Any potential customer browsing around on the deck will more often than not be wooed by the offerings at higher levels before getting to your stuff.
   
   
3. Market Share:
   
   The largest carrier in Australia (Telstra) holds about 40% market share in a market of 19million mobiles, which is pretty significant and for many this would be enough.
   
   Except when you realise that the vast majority of these customers are:
   A) Mum's and Dad's (so not early adopters)
   B) Governments and Corporate (who will not consume most content)
   
   As a result a deal with one carrier, even the largest, will rarely generate enough revenue to justify doing an exclusive deal with a carrier, there are other problems as well.
   



4. Revenue:
   
   The simple fact is that for most content producers an exclusive deal with a carrier, especially if your a small studio is not the pot of gold at the end of the rainbow many expect.
   
   Now admittedly this is an interesting one and it all depends on how much of an established brand you are, in the instance of the AFL the ability to negotiate is on their side and screwing Telstra out of $60million would have them laughing all the way to the bank. But in most cases the typical deal is nothing upfront and long term revenue share on content sales.
   
   This in turn causes a cash flow issue as content producers wait for customers to sign up to their great offering - 1 month, then wait for the customer to pay their bill - 2 months, then wait for the carrier to share the revenue with them - 3 months and this is just the start, this time frame can be even longer if there is a content aggregator involved.
   
   Additionally in some instances the revenue share with a carrier can be in excess of 50% of the sale or subscription price, the argument being that they are providing a billing system, a ready audience and so on. Now this isn't necessarily a bad thing even if it is a tad bit on the the high side (PayPal mobile typically charges 2% of the sale price to process a transaction) but it all comes down to volume of sales and as I pointed out before if you can only reach a small percentage of an interested market you wont be selling enough to justify the effort of getting on the deck in the first place.

So whats the answer?

The best option is to spend the money (it doesn't cost much) and establish your own branded mobile site as an additional distribution point for your content.

It is important to remember this though, mobile should never be your stand alone distribution point (unless your a mobile only play) it should act to reinforce your main distribution channels. The greatest thing about mobile is it's online when people are off-line, as a result you can leverage your existing promotional campaigns via SMS or Mobile Barcodes to drive consumers to the mobile site.

Monetization of this new point of distribution mimics the current online options with companies like PayPal launching PayPal mobile checkout and a range of mobile specific ad-serving networks springing up to fill the gap.

My advice is go off-deck, don't cut out 3/4 of your audience, and even more of your revenue for the sake of a carrier exclusive relationship, it's just not worth the heartache.

Made for mobile content

David Lynch a well known eccentric artist/director of Twin Peaks and Blue Velvet fame and his point of view on watching feature length films via the mobile...



I think this is a great video and even though it is a mash-up of sorts, (it is not an ad for iPhone as it would have you believe) I wholeheartedly agree with Davids point of view.

The issue here is not whether people will watch a video on the phone, people can and do "watch" feature length movies on their mobiles, this sector is growing in popularity on an almost daily basis with many startups trying to commercialise on the opportunities presented.

One such example is Rokcorp, with their "patented" Rokplayer in the UK (anytime a company throws around the word patented in their marketing you know it's just going to be crap) . Rokcorp allows you to purchase full length movies on a memory card that you can just plug into your phone, their site claims it give you a DVD like experience (yeah right) and even compares their service to the iPhone!

The issue here has more do with the overall experience, no mobile device (today at least) can replicate the film the way the director intended. I think David's line "It's such a sadness that you think you've seen a film on your fucking telephone... get real" just about sums it up.

Sure you "watched" the film, but have you really "seen" it the way the director wanted you to?
Hardly, to watch a 120min action packed blockbuster or tear jerking drama and experience the same emotions and excitement you do in the cinema or on even your telly? It's just not going to happen, the screen is way too small, the sound too tinny and the finer detail, the stuff that really makes a good film, gets lost in translation, anything longer than 5 mins and you've lost me.

Now I'm not saying you can't watch video content on your mobile, infact far from it, I do all the time, but to get the full mobile experience you're much better off watching content that has been re-purposed or specifically produce for the smallest screen. We're talking less complex scenes , more close-ups, toned down soundtracks and shorter lengths, bite sized content is the key to engage with viewers in the mobile world.

As a final note to all you film studios out there who spend millions of dollars promoting your next big hit and want to add a mobile trailer into the mix. I suggest you do your selves a favor and spend a few of those dollars making a mobile specific trailer. There is no point in going to all that effort to get people to the film's mobile site only to reward them with a trailer they have already seen on a bigger screen and now just looks crap in comparison on the phone.

For those that want to know more I suggest you talk to Simon Goodrich, Andrew Apostola or Kate Elton at the Portable Film Festival. These guys have done a fantastic job at sourcing really good "made for mobile" content and have access to a network of really talented directors who understand what it takes to produce engaging short films.

Until next time.

Mobile Barcodes in Times Square

Kudos to our friends over at Scanbuy who've succeeded in getting their EZcode mobile barcode format smack bang in the middle of Times Square!


This is a huge win for everyone in the industry, I look forward to seeing Scanbuy stride ahead in leaps and bounds in the coming months.

To Jonathan Bulkeley, Chai Outmezguine, Jim Edson and the rest of the Scanbuy team, I tip my hat to you, much respect.

Also thanks to Bena over at GoMo News for the initial tip off, a great blog for those of you who want to be "in the know" about what's happening in the mobile space.

2008: The year of the mobile barcode?

Nokia N95 Review - Hardware review (Part 1)

So just got delivery of a shiny new Nokia N95 from 3 mobile, I was holding out for the N82 but as my N70 was about to give up on me I didn't really have a choice.

Over the next couple of posts I'm going to deep dive on this fantastic little unit and some of the great applications I've already found that leverage the inbuilt functions, this post is going to introduce the phone and it's hardware.

Off the bat I've got to say the N95 is a brilliant phone and herald of things to come as we move into the always on, always connected age of mobile media. Nokia's done a great job of integrating a number of previously separate components into one device, this is true convergence.

I've had it for about a week now and have already had a good crack at all the bit's and pieces, so what's under the hood?

HSDPA = Very fast data speeds
This is really stunning, the speed difference between the N70 and the N95 for data access is very noticeable. No more pixelation or stuttering when streaming video from sites like tinytube, 10 emails downloaded in 2 seconds, and browsing sites faster than my 1mb office Internet connection.

In fact this is so fast and data from 3 is so cheap I'm seriously considering not renewing my 512k ADSL connection at home.

Integrated GPS = Cause I always want to know where I am!

This is not simple Network assisted GPS anymore people, this is true satellite GPS coupled with A-GPS and boy does it really change your perspective on location based services. I've used previous iterations of GPS before via network only assistance (something Google is utilising with their latest version of Google Maps for mobile) and have always felt that until it was more accurate location based services would always be a little dodgy.

The accuracy on this baby is very sharp, although you do have to be outdoors for it to work properly, no matter how much I tried indoors it just would not lock on, but then indoors isn't really an issue, hey if I'm indoors I know where I am right? Get it outside though and the unit locks onto your position very quickly, less than 10 seconds on most occasions.

Nokia has also included a free mapping application called Nokia Maps which interfaces directly with the GPS unit, eliminating the need to carry around a Navman or TomTom. Nokia Maps allows you to find your current location on its free locally stored mapping software, plot your route and even provide voice navigation instructions for when driving, they've thought of everything!

Having GPS on it's own is commendable enough but the fact that Nokia has allowed access to the GPS receiver by 3rd party applications really takes the cake. I downloaded an application developed by Nokia Research called Sports Tracker, it's designed to track and plot your workouts such as walking, running and cycling on Google Maps, trust me they've thought of everything but more on that later.

Accelerometer: Yes you heard me, an accelerometer!

The Nokia N95 has an inbuilt tri-axis accelerometer that is completely underutilised in it's current form. It appears that Nokia introduced an accelerometer to enhance the photo taking experience, it's currently used for image orientation and stabilization when taking photos, which is great but as the iPhone has shown it can be used for so much more. As the N95 was released before the iPhone I guess Nokia only thought slightly out of the box for this one considering the possible additional functions. Fortunately Nokia has since introduced a Software Development Kit (SDK) to allow 3rd party developers to take advantage of this neat little addition.

There are already some great apps coming onto the market that utilise the accelerometer on the N95 and in particular is one developer who's making a name for himself Samir Oueldi who has launched two very interesting apps that make just holding the N95 fun. Rotateme which automatically adjusts the display from landscape to portrait as you turn the phone on its side and Nokmote which introduces Wii like capabilities to mobile gaming. The Sport's Tracker application I mentioned previously also engages with the accelerometer to turn the N95 into a Pedometer

5 Mega Pixel camera with Carl Zeiss lens (wtf is a Carl Zeiss lens!?)

Now I'm not sure that the Carl Zeiss lens makes any significant difference to the photo quality, even though the company Zeiss is supposed to make some of the best lenses around, one would think this is more for the cool name "Carl Zeiss" (why does anything with a Z in it sound cool?) and to give Nokia a point of difference in marketing.


Nevertheless this is still one great camera especially for a mobile device. It takes clear sharp images with anti-blur, red-eye reduction, LED flash and macro and auto focus. The video recording quality is great with upto 30fps in MP4 (H.264) format.

This camera is good enough that I no longer need to take my digital camera with me when I go out, nuff said.

High Quality audio features: (for a mobile anyway)

I'm actually pleasantly surprised by the high quality audio output of the N95 both from the external speakers and headphones. Typically mobile audio has been the realm of the Sony Walkman range of handsets. Nokia has lifted the bar somewhat with loud clear distortion free external speakers that are great to use to play music when at a park or beach and you feel like a spontaneous rave.

I'm also glad that they've done away with the ridiculous POP port only headphone option limiting me to the extremely poor quality headphones Nokia provides. Now I can groove away on my Sennheiser CX 300's and not have to compromise on quality, heck I might even start leaving my iPod at home!



So what are some initial downpoints, cause let's be honest no one can be as perfect as Apple right? ;)


The slide is annoying the heck out of me!

Nokia in all their wisdom thought that utilising a slide to change from multimedia mode to phone/application mode would be a good idea, well it's not! The bloody thing changes to multimedia mode every time I take it out of my pocket (which is often) even when I go to take a call.

Multimedia mode puts the display into landscape,I have to slide it open and closed to revert it back to portrait mode, this is annoying to say the least, it's great concept in theory but I guess Quality Assurance missed to boat on that one.

Extremly poor battery life :(

Yeah this just isn't a good phone for battery life. I use my phone alot especially for data applications and I'm lasting till just about 6pm on a normal working day before it's lights out.

I suppose you can't win them all but still this is a pretty critical feature, I hate having to carry around 2 batteries, I did that with my Motorola A1000 for 12 months and I'm not happy about having to do it again, especially when the phone cuts out on a call.

Well thats about all I can muster for this round, more hardware features and some of the absolutely amazing 3rd party applications I mentioned in coming posts.

Cheers
- AMD