Several months ago, I urged major publishers to consider distributing content to the emerging mobile phone platforms. For all of the hype surrounding wireless (my own included), however, 2004 was not exactly the breakthrough year some had expected for mobile content. In the U.S., mobile phone penetration is at about 60%, but users are only beginning to venture beyond voice and into the various kinds of data channels content providers will eventually exploit. According to Jupiter Research, mobile carrier ARPU (average revenue per user) has not gone up much, if at all, in the past three years mainly because increased fees for data usage (ring tones, SMS messaging, games, mobile content) have not been enough to offset the declining prices we pay for voice minutes.
For most carriers, premium data services still account for significantly less than 10% of the revenue they make, even though millions of people are buying ring tones (143 million tones in 2004) and teens are sending enough SMS messages to fill an encyclopedia (42 billion in 2004). This is all still penny ante stuff when you consider the staggering size of the potential user base (180 million in the U.S. alone). The fact is that U.S. customers are just getting their feet wet in premium mobile content compared to the faster buy-in from Europe and Asia. Part of this is a technology problem; our networks are not robust enough for consistent experiences. But carriers and publishers also need to cultivate users more effectively than they have. Mobile content needs a jump-start.
First, we need to make best use of the mobile tools people already know and like, such as SMS messaging. SMS, which far outdistances even ring tones and games in revenues ($2.5 billion in 2004), is a remarkably facile publishing platform. For instance, send a text message to the short code 42278 ("4CAST"), and Weather.com will reply with your local forecast. Both Google and Yahoo! have beta versions of SMS search tools that return local vendor listings, including hot-linked phone numbers you can call with a single button press.
Take a lesson from the early Web, where it took years for publishers to "discover" that email, not Web sites, was the Internet's killer app. Don't wait for 3G networks that can broadcast video and make WAP phone browsing tolerable. Publishers need to insinuate themselves in the venues that customers already use, and SMS is a place to start. I think text messaging is one way that B2B publishers and even companies can let people pull content that by design, must conform to the phone's limited content capabilities. Let the user send you a short code, and pass back to them your latest headlines or blog entry. It is an elegant solution that works within the phone's physical limitations and user familiarity. It also sets you up for the inevitable ramp-up of multimedia messaging service (MMS), which will deliver images and robust content subscription services to the newest generation of handsets.
Secondly, to paraphrase our late president, carriers need to tear down that garden wall. Unlike Europe, where content providers often sell their wares directly to mobile customers from branded portals, U.S. carriers keep subscribers inside a proprietary service and split revenues with publisher partners. This is understandable because the Verizons and Cingulars do not want to become ISPs (dumb pipes that can't realize additional revenue from all the fee-based content that passes through their networks).
Nevertheless, the problem for both publishers and users is that carriers are not media companies; they do not know how to merchandise and market content effectively. Knowing what content is offered by a carrier and then finding it in the morass of menus on ham-handed proprietary portals is a nightmare that surely extinguishes more buys than it facilitates. We need some sort of decentralized approach to mobile content delivery, one that lets publishers market, brand, and sell their own mobile content to their most likely enterprise or consumer targets but at the same time remunerates the carriers.
And finally, we need to wrestle harder with the phone form factor. Even on Verizon's laudable new 3G VCast service, those 90-second repurposed TV clips (filled with long shots) from CNN and ESPN are tortuous on the best smart phone. We need to think about what shape content should take on a phone. Moreover, we need a much more customized interface that pushes you the content you need or want so you don't have to drill through a phone interface. Mobile push is also the way that enterprise content managers and business publishers will leverage the mobile platform and target alerts and narrowcasts to their select audience.
Let's not make the mistake of thinking that mobile content is waiting for the U.S. audience to catch up. Carriers and publishers need to get a move on and meet users halfway.