 | Issue: | Asia-Pacific I 2007 |
| Article no.: | 13 | |
| Topic: | The future of mobile content in Asia | |
| Author: | D.P. Venkatesh | |
| Title: | Founder and CEO | |
| Organisation: | mPortal | |
| PDF size: | 388KB |
About author
D. P. Venkatesh, the Founder and CEO of mPortal, has more than 17 years’ experience in executive management, strategic planning and business development in the telecommunications industry. Prior to founding mPortal, Mr Venkatesh was with McKinsey & Company in their Hong Kong office as part of their global Telecommunications Practice. Mr Venkatesh led the Asia-Pacific telecommunications practice for Computer Sciences Corporation and started CSC’s office in Asia. Earlier in his career, Mr Venkatesh held several positions in product management and marketing for Convergys in North America. Mr Venkatesh holds both an MS in Industrial Engineering and an MBA from the University of Cincinnati, as well as a BS in Chemical Engineering from Anna University.
Article abstract
The mobile content sector is in a state of flux and uncertainty. Both content providers and operators want to ‘own’ the market. Content providers would like a Web-type model with free content, but operators want to charge for the content and not become mere re-transmitters. Whatever the model, the success of mobile content will depend upon the quality of the user experience, ubiquitous and seamless network availability, and pricing schemes that reflect the user’s perception of the value of mobility.
Full Article
The reality about the mobile content and applications marketplace today is, first, that no one really knows what exactly it is and, second, whatever it is, not everyone is talking about it whether they are doing it or not and, third, everyone seems to think that others are doing it better than they are. The mobile content business is trying to figure out how to get people to buy content and how to make money from it. Unfortunately, today, the majority of customers are not buying mobile content. They do not know what mobile content is out there, and figuring it out is too much of a hassle. While mobile operators seem convinced that they are going to be the winners in this race, the content providers seem equally self-assured that in the end they will emerge victorious. The underlying problem appears to be that both sides seem to be borrowing from the Internet model and each side has its view on what is the right business model for mobile content. The content providers will tell you that, similar to the worldwide web, it is all about content and that distribution should be free – or at least open and neutral. The mobile operators, on the other hand, are determined not to see a repeat of the Internet model where their brethren, the fixed operators, largely ceded control to the content providers and serve as mere pipes. Given the above issues and the opposing forces, one has to wonder if this is an industry that will ever become a mass market similar to web content. The reality, however, is that while it is completely different from the fixed Internet, mobile content is going through a period of learning. A shakeout of both its business models and its players, similar to what happened during and after the infamous dot.com cycle, is occurring. In the early stages of any market, there are usually early adopters and early providers who may or may not survive to the stage when the market matures and becomes a mass-market opportunity. Additionally, as the technology and business models evolve, it is imperative for players to adapt quickly rather than stick to the models that may have served them in the early phase of the market. With the Internet, we saw early-stage companies that effectively took an existing business or product idea and used the Internet merely as a distribution channel. A prime example of this model was Amazon.com, which merely took the idea of selling books and took it online. However, as the Web became more prevalent, companies like eBay developed by using business models that were not only made possible because of the Internet, but also depended on the Internet to exist. The mobile content and applications market will see a similar transition over the next few years. While today’s mobile content is merely about taking existing web-based or desktop-based content and revising it for mobile, the next-generation will be different. Rather than taking an existing content asset or application and putting it on a mobile device, next-generation mobile content and applications will be designed from the ground up to be pure mobile applications, and made especially for mobile. In order for the next wave of mobile content and applications to reach the shores of a mass market, several conditions need to be met. Fortunately, most of these conditions have been quietly there in the background. If we were to highlight the top three conditions that are required for the next-generation of mobile adoption they would be: a superior user experience; seamless and ubiquitous availability of broadband wireless networks; and, the competitive, value adjusted, pricing of services. As we examine each of these conditions in more detail, it becomes apparent that these conditions are neither the only issues that need to be addressed, nor are they simple issues, but rather each issue is comprised of several sub-issues that make them complex. User experience In terms of mobile content and application user experiences, we have yet to see anything as intuitive as voice or the iPod. The mass market is not buying content today because of the clunky and unnatural user experience. The issue is not necessarily because the content is not right or that there is not enough content available. The issue is with the usability factor. The goal of usability for mobile content and applications should be to provide the best possible user experience for finding or discovering the service, previewing the service offering, and ultimately purchasing mobile content in an easy, simple and straightforward manner. In order to promote mass adoption of mobile content, service providers should examine the usability barriers in these three areas and work to overcome them. Ubiquitous, seamless, wireless While network speeds might be a prerequisite, even a determinant, of much mobile content adoption, it is fair to say that there is a critical mass of adopters that must be reached before mass-market dynamics kick in. When examined more closely, the issue is more about seamless availability and ubiquity. While mobile operators argue that one technology is better than another or the faster connection speed is the answer to all adoption problems, it is really the way in which wireless networks are enabled rather than their speed that is the key issue. Consumers are more apt to adopt mobile services if they know that the services will be available seamlessly in multiple zones – in the car, in the home, in the office and such – and will be willing to trade off different services or depth of services in different zones. On the point of high bandwidth versus low bandwidth, it is wise to take a lesson from the I-mode experience in Japan, the success of which was based on seamlessness and ubiquity of mobile networks and compelling applications all on a low-speed network nearly a decade ago. Service pricing Most Web pundits seem to believe that competitive pricing really means free services. On the contrary, competitive pricing is more about tying price to the value provided to the consumer in a given context. While most content on the Web is supported by advertising and, consequently, free to the consumers, it is quite possible that consumers will pay for the same content in a mobile environment. Most consumers will say that they would prefer to flip open their phone directories or White Pages at home to find a local business or pizza store rather than pay for directory assistance. Nevertheless, the same consumer sustains a multi-billion dollar business in the US by paying to access directory assistance from their mobile phones. An often-cited example of the differences in behaviour of the online consumer compared to the mobile user, is that mobile users are willing to pay US$2.99 for a ringtone on a mobile, but they can download the entire song for US$0.99 on the Web. Consumers have shown they are willing to pay a premium for mobile content – perhaps due to the extra value they feel mobility brings. So rather than argue about whether people will continue to pay US$2.99 for a ringtone, the mobile industry should focus on additional mobile services that people are willing to pay a premium to obtain. Mobile advertising is a much hyped area where attention is currently focused. While it will be a viable and significant part of the mobile content market, there will always be subscription-based or non ad-supported business models that create real value for the user and drive significant revenue streams. Overall, when designing and delivering next-generation mobile services, all of the three parties concerned – mobile operators, content providers and device manufacturers – need to start by focusing on the customer experience and not on how to protect their current turf. They need to work backwards from the customer experience via the business model to the implementation. There are many different players jockeying for position in the next-generation mobile content race, but the winners will be those who can manage these alliances without losing sight of the customer experience.
