CeBIT: Is Content is Really King?
By Niall McKay, Tue Mar 18 16:30:00 GMT 2003

The search for killer content rolls on...


If the telecommunications carriers are going to peddle the next generation of cellular wizardry to the "great unwashed" then they had better find some killer content. What they really need is a mobile equivalent of the Super Bowl, "The Sopranos," or "Da Ali G Show". Something that will send consumers out in droves to sign up for their 2.5 and 3G high-bandwidth services and pay through the nose to download ring tones, animated screensavers, photos, music, gaming, and even video.

At the CeBIT trade show in Hanover, Germany and this week at the Cellular Telecommunications & Internet Association (CTIA) trade show at in New Orleans content kings that survived the failure of interactive TV and the dot-bomb era gathered to pass out business cards to their newest potential customers - the cell phone operators, hoping that the third time's the charm.

Indeed, MTV, the company that could be seen as the gateway media drug for tots, tweens, teens, and young adults is now inking deals with cell makers and operators. Last week, the company cut a $75 million deal with Motorola, whereby the phone manufacturer use MTV to give it a youthful makeover by preloading content on handsets. This will include ring tones, games and images. Furthermore new MTV shows will be localized and content will be spun out to local regions.

The companies will also push live multimedia messages and SMS messages detailing events, retail promotions as well as provide screensavers, and ring tones featuring MTV stars. Of course, ring tones are already a pretty decent business. In Japan, for instance, JASRAC, the Japanese record industry-licensing group, collected about USD 33 million in 2001.

Mobile Media


However, Motorola is not the only company with which MTV is exchanging digital fluids. Just two weeks ago, the company climbed into bed (so to speak) with cellular operator T-Mobile. The operator also cut a deal with Universal Music. The deals will allow T-Mobile subscribers download ring tones, songs and even multimedia messages or short video clips from Universal and short animations form MTV.

Super carrier Vodafone is pushing its Vodafone Live! Service, which provides users with picture messages, games, ring tones, animations, and other content services. Indeed, in just three months it has nearly overtaken the European version of i-mode with over 380,000 subscribers across Europe. While i-mode in Japan has over 30 million subscribers, in Europe it has just 236,000. There are all sorts of reasons for this, not least among them is content, infrastructure and the lack of cool handsets. In fact, in Japan, handsets are not really an issue, as most look pretty much the same. Unlike Europe, where hipsters like to be seen with the latest, smallest and coolest handset, Japanese consumers are much more concentrated on functionality rather than design. Though Vodafone has gotten a number of Asian manufacturers to customize handsets for its Live! Service.

Moreover, according to Seamus McAteer, principal analyst with the Zelos Group in San Francisco, it's possible that US will over take Europe in the mobile content business. "The big surprise here [at the CTIA show] is that content providers are actually making money," he says, "These guys have stuck it out for years and now beginning to generate revenue."

For example, a company such as Vindigo, that has offered location-based listings (restaurants, hotels, etc) on the Palm and PocketPC platforms for a few years, is now enjoying new life as a cellular content provider.

It's still small potatoes, according to McAteer. According to a Zelos Group survey the total cellular market size in the US will exceed $72 billion in 2004. Mobile gaming and entertainment will account for little more than $100 million of that.

But in the US it is companies such as the normally very conservative Fox Television that are growing the market with interactive voting on television shows such as American Idol. As well as this Fox Sports coverage will be pushed out to celly jocs. But McAteer, thinks that user generated content will be the most compelling for the consumer. "Photos, weblogs, online dating that sort of thing will dwarf restaurant bookings." he says. Certainly, if the European and US users follow in the footsteps of their Japanese counterparts then he may be right.