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Business Models for Mobile Content Providers
Mobile Content Provider -- Provides original content (e.g. news, information, digital products & services) via intermediaries called syndicators.
Mobile Content Syndicator -- Aggregates and packages content from multiple providers. The syndicator distributes through alliances with various channels or portals.
Mobile Portal -- acts as a distributor for the content. Example NTT DoCoMo.
| Mobile content includes entertainment, sports, news, stock quotes, auction bids, ring tunes, directions, traffic reports, surveys, games, promotions and advertising. Some examples of "device-agnostic" content providers include CNN, Disney, InfoSpace, ESPN, CNBC, MTV and EMI (music). |
In case of NTT DoCoMo's i-Mode portal, some of the most widely used content-- check concert dates, display Winnie the Pooh as a screen saver, change the ring tone to Beethoven's Fifth--comes courtesy of Cybird. Since its founding in 1998, Cybird has bloomed into Japan's mobile e-commerce colossus. Today it boasts 3.2 million paying subscribers and a market cap of $ 142 million. Cybird provides content for all the mobile carriers in Japan.
Cybird sells more than 60 mobile services -- such as Namidensetsu, which for $2.44 a month offers information on surfing conditions around the country. Users pay between 80 cents and $ 2.30 monthly for each service, including ring tones and news updates. The carrier takes a 9% cut, and the license-holder--say, Time Warner for its cartoon characters--up to 20%.
Types of Mobile Content
Mobile content providers include Cybird (Japan), Digital Bridges (U.K,), Disney (U.S.), Infospace (U.S.), iTouch (U.K.), Ludigames (France), Mforma (U.S.) and Zed (Finland). These companies provide a diverse set of content ranging from:
- News: This covers the development and transmission of local, national or international news -- society, politics, economics, culture, sports and weather information. News includes alerts, headlines and full articles.
- Transport information: This encompasses the capture, packaging and transmission of content related to journey planning, incident information and other transportation services such as timetables. This deals with private transport, short and long distance public transport.
- Financial information: This includes the capture, packaging and distribution of content related services like stock quotes, exchange rates and analysts’ recommendations. These can be text, audio or video-based and in alert or full-article format.
- Games: This encompasses simple time-killer (Hangman-type) and elaborated applications. Games can be played either on-line or off-line, require a download or not, be embedded into handsets or not.
- Edutainment: This contains educational games, interactive reference publications (encyclopedia, dictionaries, etc.) and interactive guides (city guides, museum guides, etc.) Music: This consists of download or data streaming of tracks.
- Ringing tones and icon downloads
- Adult entertainment
- Directories
Note that for each of these applications, there are differences in the structure of the market, its business model and the technological requirements to deliver content.
Revenue Models
The different revenue models for content providers -- creators, syndicators and packagers -- include licensing, referrals, and transactions.
Mobile Content Revenue Model |
Description |
Examples |
Pay-per use |
Every time someone uses the content through a portal, the content providers get a cut. Typically 50-90% |
Cybird (Japan)
Infospace
Picofun |
Recurring flat-fee Subscription |
Unlimited usage included in hourly, daily, weekly or monthly fee |
Cybird (Japan)
Endemol |
Revenue Sharing Models |
The mobile operator would receive a piece of whatever business was generated from a mobile surfer who clicked through a link to a partner site. |
Content providers doing business on or through the mobile portal are looking for true sales and distribution channels. Example what DoCoMo has done for several content companies. |
Time Specific Pricing |
Content becomes available at a specific price point for a limited period. |
Short-term Promotions e.g., airline or concert tickets (USA Interactive -- Ticketmaster or Expedia) |
Personalized Services and Content |
Pricing based on personalization |
Most cellphones come with the SIM card -- computer chips that contain personal ID information. Using this personal information, content providers can customize their offerings even further. |
Free Content |
Included in basic portal services such as Palm.NET |
Moviefone, Starbucks Coffee Shop locator or USA Today. Hard to see how these companies can monetize this. The revenue gain from providing the mobile device capability has to outweigh the cost of doing so. It is not clear that this is the case. |
Content License fee |
Commercial database companies that give limited "rights-to-redistribute" their content to organizations or portals. |
Lexis-Nexis, Thompson Financial, MapQuest |
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Pricing based on speed of connection Pricing on location of user |
Streaming content -- video, audio, Multimedia Messaging Service Location based or proximity based content |
There are many other digital content revenue models, including: One-time access fees, Time-of-usage in any increment, Peak/off-peak times, and per item based pricing.
Mobile Content Strategy Questions
What potential does 3G unleashes for content providers? 3G usually makes people think of futuristic services like streaming video and music clips. But for such services to take off, the demand and supply must be in sync. Content-centric business models will not win over users. Users still do not know what 3G can do for them yet. Under such an environment, it takes time for users to acclimate to the potential possibilities. One needs to remember that what made i-mode take off was e-mail and ringing tones, and users began to reach for more complex things gradually.
Why will this time be different in the digital music delivery business? All downloaded music is by definition music by the track. The distribution method is new but the concept isn't. There have been numerous attempts to sell music by the track since the early 1980s on. All have failed, not because of technology but because the record labels (content owners) don't want to sell music by the track. Why will it be different this time in the mobile space. What should a company do to successfully create a business of downloaded songs to a handheld. In the end, entrepreneurs need to do their homework and come up with business plans that address the failure of older similar experiments. The on-line music industry like MP3 and Napster didn't address the reluctance of the record labels to sell music by the track, until that happens all track centric business models are bound to fail.
What do you think? Should content providers like Wall Street Journal (WSJ) start preparing for mobile delivery. We think that providing news headlines from the Wall Street Journal (WSJ) would be a hit mobile service. The crisp new summaries -- usually 40 to 60 words -- put out by WSJ editorial staff are ideal for a mobile device. A service like this can be part of the overall WSJ subscription or an element of a bundled service. The challenge would be pricing it. $2.50 per month would be a good price point. Treating the mobile channel as a add-on and grafting it on to existing bundle of offerings is taking to require a lot of careful planning.
Interesting Content Provider Problem -- Given the almost painful failure of WAP, would you as a content provider risk jumping on the WAP 2.0 bandwagon. WAP 2.0 - announced in August 2001 - is an upgrade to the specification. It is meant to answer complaints about WAP. Services should load faster and be quicker because of the “always-on” network connection. XHTML as the content markup language should mean that more WAP content will be available to users, although content developers wishing to make applications and content available to users in a multi-device context still need to do content reformatting to make the data readable on the handset. WAP 2.0 is tailored for faster networks, such as General Packet Radio Services (GPRS) and UMTS, and supports a new scripting language, EXtensible HTML (XHTML), which combines HTML and EXtensible Markup Language (XML).
Will a service like this sell? Kanakaris Wireless, a provider of video-on-demand services for both wireless devices and PCs, yesterday announced it would launch a new streaming movie service called CinemaPop.com. The service will offer users the ability to watch full-length movies as either a streaming video or as a downloaded product. Movies will cost between $1.99 and $2.99 for unlimited plays in a two-day time period. Last year, Kanakaris debuted its Web-based TV station, AK.TV, which can be viewed on wireless handhelds.
Will a service like this sell? Pet and baby watching. Parents are often eager to know how their new-borns are doing and what kind of expression he or she has. One could fix a webcam in the baby's room and send images over the wireless network. Some aggregator company can provide a solution so that the moving images will come out well on the mobile phone. The same can be done for pets. What will you charge for this service? |
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