Vodafone Says Let Them Eat Marketing
By Mike Masnick, Thu Apr 14 01:45:00 GMT 2005

As content providers battle with operators over revenue splits, Vodafone is trying to appease them by promising to pump up marketing efforts. So far, it doesn't appear to be making anyone very happy.

Mobile operators around the world still haven't quite learned the lessons of how mobile content is going to work. With the ongoing obsession over ARPU, operators start looking at how much they can charge each individual on every transaction, rather than taking a step back and looking at the bigger picture. If there was more desirable content, easily accessible, then the overall pie would be bigger, and everyone would have the opportunity to make more money.

Instead, the operators get greedy. Despite ongoing protests from content providers, Vodafone is basically unwilling to budge from the revenue splits it's set up -- which tend to bottom out at around 50/50. As content providers (who are just as bad in their short term greed) complain, Vodafone's latest response isn't to change the revenue share agreement, but to promise to market mobile content offerings more.

While better (which doesn't always mean "more") marketing is always a plus, if there isn't that much decent content, then it's not going to do much good any way. What's amazing is that all of these mobile operators seem to refuse to take a basic lesson from DoCoMo in Japan on mobile content. DoCoMo set up i-mode as a system to encourage mobile content generation by promising nearly all of the revenue to the content providers, and just taking a small piece (about 10%) for itself. That actually encouraged content providers to offer their content on mobile offerings, increasing the overall pie size for everyone. The success of i-mode over the years certainly supports that model, yet operators like Vodafone think that they can get away with revenue splits that make content providers wonder why they should bother going mobile at all.