Winning and Losing in Mobile Content (2003)

SUMMARY

Report Overview

W2F highlights the winning and losing marketing and Distribution strategiesfor Mobile Content - from Ringtones to Games to Mobile news and Informationservices.

With low barriers to entry, the Mobile Content market has a large number ofequally positioned competitors who will be seeking to leverage their assets tocreate competitive advantage. How do you compete effectively in this market andhow will this change over time?

The Mobile Content industry has to move from one obsessed to one becomingincreasingly obsessed with effective distribution of the product to theconsumer. This means assessing the potential cost savings and revenueopportunities afforded by retail, independent and operator-based distribution.

Mobile Content without effective distribution channels cannot provide asufficient return on investment.

This report examines the economic feasibility of business critical factorswithin the Mobile Content industry. W2F demonstrates how the choice ofDistribution Channel will make or break a Mobile Content Provider.

It also demonstrates how Operators who take a proactive stance in evolvingthese channels will stimulate long-term ARPU growth, customer loyalty and reduceChurn.

Furthermore, it provides a clear business case and sales message for thoseservicing this industry through technological innovation or the licensing ofintellectual property.

This report comprises the key elements required for developing

• a) a mobile content strategy for providers and operators
• b) a strategy to sell to mobile content providers or operators
• c) a business case for those entering the market

Winning and Losing in Mobile Content has been developed by W2F over 12months of intensive research utilising

• a) key interviews with leading content owners, FMCG brands, operators,technology providers
• b) intensive statistical analysis providing market valuations, technologyavailability and potential consumer demand for content
• c) case studies of successful content providers and licensors globallyidentify their business models and how they are monetizing mobile contentprofitably.

Companies mentioned in this report:

Mobile Operators   

• AT&T Wireless
• e-plus
• Hutchison 3G
• J-Phone
• KPN Mobile
• NTT DoCoMo
• O2
• Orange
• SK Telecom
• T-Mobile
• Vodafone

Non-mobile Content Providers

• Bandai
• Disney
• Emap
• Hasbro
• Mattel
• MTV
• Sony Computer Ent.
• Sony Music
• Universal Music
• Yamaha

Mobile Content Companies

• 3G Labs
• Cybird
• Digital Bridges
• Faith Inc.
• I-touch
• Minick
• Moviso
• Phat Tonez
• Xing

Technology Service Providers

• Comverse
• Ericsson
• Logica CMG
• Motorola
• NEC
• Nokia
• Openwave
• Sharp
• Siemens
• Sony Ericsson

Other

• 7-Eleven
• Carphone Warehouse
• Tesco

What companies can gain from this report:

Mobile operators

• Discover how Mobile Content impacts ARPU and churn
• Learn how to create cost savings through greater operational effectiveness
• Find out at what stage of the market is it appropriate to launch MobileContent and the expected ROI
• Understand how to develop the mobile content market by identifying clearlywith your role, potential partners and competitors
• Find out which of your competitors is making a difference in this market andwhat are their competitive strengths. Includes an analysis of the competitivethreat of I-mode, O2 Active and Vodafone live!

Non-mobile Content Providers

• Understand the impact of Mobile Content on your current business model
• Find out the ROI of investing in Mobile Content and the size of yourpotential market
• Understand which companies are making money from Mobile Content and how theyare making it
• Get detailed analysis on how to distribute content effectively, at what doesthe market become critical and what partnerships are necessary for success
• How to make money through licensing your brand and at what market stage isit the best option.

Mobile Content Companies

• Discover how to survive in a Developing market - learn about evolving yourcompany positioning, and the importance of Specialising or Generalising
• Understand the threat of non-mobile companies and their impact on yourmarket share
• Uncover how to develop sustainable business and distribution models forsuccess in a Developing, Maturing and Mature markets
• Find out how Operator attitudes towards Content Providers will change andhow this effect revenue share

Technology Service Providers

• Get the Statistics and Market Information highlighting the potential ofcontent in a Maturing mobile market
• Find out who will buy technology supporting mobile content and non-mobileContent companies

TABLE OF CONTENTS

Executive Summary

1. Introduction to Winning and Losing in Mobile Content

• Exploding the content myth
• Value Network v Value Chain
• Focussing on the Consumer Market
• Industry Obsession with Killer Application
• Inefficient distribution models and capital leakage
• Timing of Market Entry
• Global evidence for consistency in mobile content market evolutions
• The Japanese mobile content market lead
• The Underdeveloped North American and European mobile content markets
• The Evolving market: Moving to Profitability
• Figure 1.1 The traditional view of the industry as a "Value chain"
• Figure 1.2 The Value Network
• Figure 1.3 Dual approaches to mobile market problems

2. Structure of this Report

• Figure 2.1 Report flow chart

3. Who is involved in mobile content?

• Reasons for involvement in mobile content
  • Opportunists
    • The Evidence from Japan and Korea
    • The success of SMS in European
    • Legacies of the wireless boom
    • Leveraging existing assets
  • Defenders
    • Traditional revenue displacement
    • Mobile content and maintaining ARPU
• Undefined roles in Europe and North America
• Figure 3.1 Mobile content valuations for Japan based on industry evidence
• Figure 3.2 Average spend by Japanese consumers on mobile content
• Figure 3.3 A theoretical prediction of mobile content markets

4. The Value Network

• Defining roles in mobile content market
• Front and back end mobile content provision
• Understanding positioning in the current content market
• Applying market knowledge to core competencies
• Figure 4.1 Front and back end of the Distribution process

5. Pure Mobile Players

• Figure 5.1 Pure mobile players short term positioning
• Figure 5.2 Pure mobile players long term positioning

6. Mobile Operators

• Figure 6.1 Mobile Operators short term positioning
• Figure 6.2 Mobile Operators long term positioning

7. Non Mobile Players

• Figure 7.1 Non-mobile players short term positioning
• Figure 7.2 Non-mobile players long term positioning

8. Roles within the value network

• Mobile Internet Service Provision
• IP Licensing
• Content Provision
• Content Aggregation
  • Aggregation and the Volume Premium
  • The Long Term Effectiveness of Aggregation
• Figure 8.1 Demand for major licenses as a function of market status
• Figure 8.2 Examples of major licensing deals between mobile and non-mobileplayers
• Figure 8.3 Cost and barriers to entry of content development as a functionof market status
• Figure 8.4 Relationship structure of a content Aggregator
• Figure 8.5 Revenue shares of a content Aggregator
• Figure 8.6 Evolution of content Aggregators business model

9. Mobile content ROI and market status

• Understanding the mobile Operators positioning within a market
• Defining the relative stage of Market development
  • Volume markets
  • Value markets
  • Transition markets
• Figure 9.1 Mobile market evolution - Volume to Value
• Figure 9.2 Mobile Operator strategies in Volume markets

10. Operator Content Strategies

• Core competencies determine positioning within the Industry
• Mobile content in a Volume market
• Mobile content in a Transition market
• Mobile content in a Value market
• The Mobile Operator as a Defender
• Figure 10.1 Mobile Operator strategies - Volume to Value markets

11. Distribution Models

• What is distribution?
• Why is distribution important?
• The Distribution Process
• Visibility
• Payment
• Delivery
• Assessing Distribution Models
• Figure 11.1 Overview of the distribution process

12. Visibility

• Repeat usage
• Methods to mobile content Visibility
  • Visibility: Operator menu system
    • Strengths and Weaknesses
  • Visibility: Content Aggregators
    • Strengths and Weaknesses
  • Visibility: Internet
    • Strengths and Weaknesses
  • Visibility: Merging existing product lines
    • Strengths and Weaknesses
  • Visibility: Media Channels
    • Strengths and Weaknesses
  • Visibility: Retail
    • Strengths and Weaknesses
• Figure 12.1 Overview of network and non-network based visibility methods
• Figure 12.2 Survey of industry visibility methods
• Figure 12.3 Pie chart of industry visibility methods
• Figure 12.4 Comparative of visibility methods
• Figure 12.5 Schematic of a typical Operator menu system
• Figure 12.6 forecasts for Vodafone Live! Enabled handset owners

13. Payment

• Popular methods for mobile content payment
  • Payment: Operator branded micropayments
    • Strengths and Weaknesses
  • Payment: Messaging based
    • Strengths and Weaknesses
  • Payment: Premium rate calls (IVR)
    • Strengths and Weaknesses
  • Payment: Retail
    • Strengths and Weaknesses
• Figure 13.1 Network and non-network based payment models
• Figure 13.2 Survey of industry payment methods
• Figure 13.3 Pie chart of industry payment methods
• Figure 13.4 Comparative of payment methods
• Figure 13.5 I-mode revenue shares
• Figure 13.6 Vodafone Live! Revenue shares
• Figure 13.7 Revenue shares from premium rate SMS

14. Delivery

• Popular methods for mobile content delivery
  • Delivery: Mobile internet
    • Strengths and Weaknesses
  • Delivery: Message based
    • Strengths and Weaknesses
  • Delivery: Mobile Middleware
    • Strengths and Weaknesses
  • Delivery: Point-to-point
    • Strengths and Weaknesses
• Figure 14.1 Network and non-network based delivery models
• Figure 14.2 Survey of industry delivery methods
• Figure 14.3 Pie chart of industry delivery methods
• Figure 14.4 Comparative of delivery methods
• Figure 14.5 Comparative of friction in distribution models

15. The Evolution of the Mobile Content Market

• Four stages of Mobile Content Market Development
  • The Emerging mobile content market
    • Unsustainable profits in an Emerging Market
  • The Developing mobile content market
    • Barriers to entry to the Developing Market
    • Bridging the gap between Developing and Maturing mobile content markets
  • The Maturing mobile content market
    • The Maturing mobile content market and non-mobile players
    • The Maturing mobile content market and continuous reinvestment of profits
    • The end of the positive feedback cycle
  • The Matured mobile content market
• Figure 15.1 comparative barriers to entry in market stages
• Figure 15.2 capital leakage caused by inefficient distribution models
• Figure 15.3 the positive feedback cycle
• Figure 15.4 the matured market and the positive feedback cycle

16. The Mobile Content Ecosystem

• Adoption of Operator branded mobile internet services
• The evolution of mobile content
• Defining the Ecosystem
• Clear definition of roles and responsibilities
• Consumer benefits of the mobile content Ecosystem
• Industry benefits of the mobile content Ecosystem
• Handset manufacturers and the mobile content Ecosystem

17. Winning and Losing Case Studies

• I-mode?
• Digital Bridges
• Bandai
• Taito
• Cybird
• Asahi
• MTV Networks Europe

18. Summary of Recommendations

• Winning and Losing in Mobile Content: Corporate Strategy
• Summary of recommendations for Non-Mobile Media Companies in a Developingmarket
• Summary of recommendations for Pure Mobile Players in a Developing market
• Summary of Recommendations for Operators in a Developing market
• Summary of recommendations for Non-Mobile Media Companies in a Maturingmarket
• Summary of recommendations for Pure Mobile Players in a Maturing market
• Summary of recommendations for Operators in a Maturing market
• Summary of recommendations for Non-Mobile Media Companies in a Maturedmarket
• Summary of recommendations for Pure Mobile Players in a Matured market
• Summary of recommendations for Operators in a Matured market

19. Mobile Content Statistics Valuations

• Figure 19.1 Relative maturation of mobile gaming in Europe, North Americaand Asia
• Figure 19.2 Relative maturation of mobile music and ringtones in Europe,North America and Asia
• Figure 19.3 Moderate forecasts for mobile game market valuation inAsia-Pacific 2002-2006
• Figure 19.4 Aggressive forecasts for mobile game market valuation inAsia-Pacific 2002-2006
• Figure 19.5 Conservative forecasts for mobile game market valuation inAsia-Pacific 2002-2006
• Figure 19.6 Moderate forecasts for mobile game market valuation in Europe2002-2006
• Figure 19.7 Aggressive forecasts for mobile game market valuation in Europe2002-2006
• Figure 19.8 Conservative forecasts for mobile game market valuation inEurope 2002-2006
• Figure 19.9 Moderate forecasts for mobile game market valuation in NorthAmerica 2002-2006
• Figure 19.10 Aggressive forecasts for mobile game market valuation in NorthAmerica 2002-2006
• Figure 19.11 Conservative forecasts for mobile game market valuation inNorth America 2002-2006
• Figure 19.12 Moderate forecasts for information content market valuation inAsia Pacific 2002-2006
• Figure 19.13 Aggressive forecasts for information content market valuationin Asia Pacific 2002-2006
• Figure 19.14 Conservative forecasts for information content market valuationin Asia Pacific 2002-2006
• Figure 19.15 Moderate forecasts for information content market valuation inEurope 2002-2006
• Figure 19.16 Aggressive forecasts for information content market valuationin Europe 2002-2006
• Figure 19.17 Conservative forecasts for information content market valuationin Europe 2002-2006
• Figure 19.18 Moderate forecasts for information content market valuation inNorth America 2002-2006
• Figure 19.19 Aggressive forecasts for information content market valuationin North America 2002-2006
• Figure 19.20 Conservative forecasts for information content market valuationin North America 2002-2006
• Figure 19.21 Moderate forecasts for ringtones and mobile music marketvaluation in Asia Pacific 2002-2006
• Figure 19.22 Aggressive forecasts for ringtones and mobile music marketvaluation in Asia Pacific 2002-2006
• Figure 19.23 Conservative forecasts for ringtones and mobile music marketvaluation in Asia Pacific 2002-2006
• Figure 19.24 Moderate forecasts for ringtones and mobile music marketvaluation in Europe 2002-2006
• Figure 19.25 Aggressive forecasts for ringtones and mobile music marketvaluation in Europe 2002-2006
• Figure 19.26 optimistic forecasts for ringtones and mobile music marketvaluation in Europe 2002-2006
• Figure 19.27 Moderate forecasts for ringtones and mobile music marketvaluation in North America 2002-2006
• Figure 19.28 Aggressive forecasts for ringtones and mobile music marketvaluation in North America 2002-2006
• Figure 19.29 Conservative forecasts for ringtones and mobile music marketvaluation in North America 2002-2006

Glossary

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