09 May 2007

Jump Start Mobile Content

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.

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


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