New mobile content categories growing quickly: CTIA panel

By Dan Butcher

April 3, 2009

Mobile's angels

LAS VEGAS -- While the growth in traditional mobile content categories is slowing, other newer mobile content types are seeing increased growth, according to a panel at the CTIA Wireless 2009: Mobile Life conference.

Mobile content consumption is shifting from ringtones and wallpapers to applications, full-track music downloads, user-generated content, social networking, microblogging, TV and streaming video. The Yankee Group projects that utility-based applications leveraging GPS and social networking applications will drive the growth in mobile content in the years ahead, with ‘non-voice directory' the leading category.

"People like to customize their phones, and they used to buy ringtones as a differentiator, but now apps are the differentiator," said Aaron Kohn, vice president of strategy and development/general manager of mobile for National Geographic Global Media. "Hulu disproved the idea that everyone wanted to view user-generated content, but the flipside is that the only apps that people will subscribe to offer unlimited downloads of whatever they want.

"To distribute more and more richer apps, you have to go through the OEMs, you can't get what you need from carriers," he said. "We use mobile to cross-promote and upsell across our various platforms, and it does cross over nicely to traditional media such as print and online."

Many content providers are experimenting with different monetization strategies, choosing between ad support, subscription, micropayments and pay-per-download models.

AP Mobile

Many of the smaller players are struggling to find a sustainable model. However, big brands with an established, dedicated audience and content that is easily translatable to mobile are doing quite well.

"Mobile for us is a mass-market platform -- on the mobile Web we have between 8 and 10 million people per month, we deliver the second-most messages monthly after American Idol, we have applications on a variety of platforms, we're on i.TV," said Dan Mason, product director for ESPN Mobile. "We make money from ads and license fees, and for us it's an absolute first-order platform.

"Our mobile platform is every bit as big as ESPN.com on game day and mobile is a huge part of our business -- we're making millions of dollars," he said. "We see the majority of our revenue through our carrier partners.

Swimming in potential

"ESPN does not work with ad networks -- we're based on branding and sponsorships."

Despite ESPN's success, Mr. Mason recognized that squeezing payments from consumers has gotten harder, in large part because people have expectations of free content from their experience of the Internet.

"It's cost-prohibitive to offer the same kinds of services in a free environment," Mr. Mason said. "We have to find the right way to tell consumers that our content costs money.

"A lot of the models taken from the Web don't work as well on mobile, he said. "Mobile advertising has a tremendous future, but the model is still being figured out, what types of ads work best."

In addition to sports, news is another category that meshes well with mobile. For example, the New York Times and the Associated Press both have robust mobile offerings.

The AP switched its application from a purely ad-supported model to a pay-per-download model that also contains advertising.

"The consumer is king, and you have to give the consumers what they want, which is customizable content," said Jeffrey Litvack, general manager of mobile and emerging products for the Associated Press. "Our strategy fundamentally changed from the mobile Web and on-deck offerings with the carriers to apps distributed through the handset manufacturers.

"The mobile phone is a device that is for information and entertainment, and the carriers were never able to truly bridge that gap," he said. "Carriers determining content for users in a walled garden hasn't fully worked.

"You have to let users decide what content they want and make it as discoverable as possible."
A common theme on this panel -- and a common complaint from mobile content providers and brands -- is the need for carriers to increase the relevancy of mobile advertising by sharing their subscriber data.

"We do want to work together with carriers to find a way to make our business grow," Mr. Litvack said. "A lot of ad-supported apps are charging such low CPMs that it's not a sustainable biz model.

"If you want to have ad-supported models, we need more information from carriers about their subscribers, because advertisers concerned that they can't target they way they can online," he said. "The data is there, but it hasn't been unlocked yet.

"We'll start to see more and more video and other assets that will be available off deck on the mobile Web, and carriers can continue to have an important role, but we have to adopt new business models."

The consensus on the panel was the consumers are willing to pay, but you have to give them a compelling reason to do so.

Mobile gaming is one category that has remained popular, although the way consumers access mobile games is changing.

"We focus primarily on video and gaming, because you can get something out relatively fast and monetize it in a very nice way on iPhone and BlackBerry," said Ross Cox, senior director of entertainment products for Turner Broadcasting's Cartoon Network/Adult Swim New Media.

"Traditional a la carte mobile gaming is on the decline, but gaming applications are growing and there are ways to create personalization apps that better represent our brand, so we're excited about mobile gaming," he said. "Adult Swim video has also translated well online, but instead of trying to directly port that brand, we reinterpret what that brand means in the mobile channel.

"Mobile is definitely a revenue generator for Adult Swim -- we've created product from a video perspective that will echo what we have on air and use ad support to monetize it."

Mobile television is one area that seems to be on the verge of exploding. Whether that will happen on-deck or off-deck remains to be seen.

MediaFlo USA, a subsidiary of Qualcomm, built a nationwide network to deliver mobile TV and cut deals with AT&T, Verizon Wireless and content brands to bring live TV to mobile devices.

"We're very bullish on the economic recovery, and we're investing now so that we're prepared for that recovery," said Mike Bailey, vice president of programming for MediaFlo USA. "The uniqueness of being able to take the content with you wherever you go is a very strong value proposition.

"This is new use for a channel thought to be primarily for voice and texting," he said. "More and more consumers are viewing TV and video on mobile devices."

"For my daughter, there's no question mobile is her No. 1 screen, and I expect it will be that way for the rest of her life."

Despite sharing success stories, most panelists expressed their desire to create new business models in the mobile medium.

"As more people get smartphones with video capabilities and all-you-can-eat data plans and it's not so expensive to consume, mobile TV will achieve scale," said Craig Vaughan, senior executive of business development for Creative Artist Agency. "As far as being the third screen, we don't think of it that way, because we believe that broadcast TV and online and mobile need to work together in order for all of them to have value.

"Hulu is paid, and we like that model, but in some cases it will be advertising, in some cases micropayments, in some cases driving to another experience such as online or broadcast," he said. "We like those models because people are paying for content."