Mobile Content: Too Many Cooks Spoil the Soup

location based services

Mobile is the buzzword today, and whoever manages to best satisfy the needs of consumers on the go, effectively catering to the ”third screen,” will be the marketing king of tomorrow. There are three types of mobile services that are reaching for their tipping points: location-based services, integrated presence services (WAP/Internet, IM, SMS, MMS, e-mail, phone), and mobile delivery of rich-media content (video, TV, user-generated content, audio, games, etc.) -- with the combination of all being the true killer app.
The “Mobile Services - Content is King” panel discussion, hosted by the German American Business Association (GABA) this week in Palo Alto, focused chiefly on the latter. This made sense in light of the fact that mobile TV is the fastest-growing new data service on handhelds (according to a Telephia study). While the panelists, including industry experts from Telephia, Yahoo, MobiTV, and Infospace, largely agreed that the combination of rich content with mobile broadband will propel incumbent carriers as well as new specialized service providers, they conceded that the industry still faces major obstacles in driving widespread adoption for a number of reasons:
1. Fragmentation of offerings: While there is a vast array of services and applications from numerous providers, it is this sheer number of custom offerings that seems to confuse consumers. Knowledge of mobile services is still limited to late adopters while the early followers depend on the packaged information they are fed from their gate-keeping mobile carriers. Often, average consumers do not even know what is possible with handheld devices. In particular, the awareness of mobile TV is very low compared to downloads, games, and mobile Internet. Of all the players, MobiTV seems best-positioned to tackle this and lead the market in part because it has developed a compelling brand and secured partnerships with AT&T, Cingular Wireless, and Sprint Nextel.
2. Fragmentation of devices: On the hardware side, players are fragmented into PDAs, iPods, PSPs, cell phones, etc., while research data shows that consumers would actually prefer to carry just one single device with them (preferably the cell phone) that integrates all of the above applications. Marketers consider the cell phone to be superior to other devices since it is the most familiar and also the most personal handheld device. Not to mention that advertisers appreciate its call-functionality (yes, you can still use a cell phone to make a phone call…) as it allows -- literally -- a “call for action.” Because of that, many believe that the cell phone will eventually also absorb many former iPod users in spite of the next generation of iPods being spiced up -- according to rumors -- with Wi-Fi and gaming features.
3. Fragmentation of technology standards: There are a number of technology standards being used to deliver mobile content. Right now, the field is divided between telcos that provide broadband connections, handheld devices manufacturers, and mobile services such as MobiTV, Qualcomm's MediaFlo subsidiary, or Modeo, that specialize in delivering professional content onto mobile players. The problem is that, for example, MediaFlo networks are based on Qualcomm technology, while Modeo plans to use the DVB-H standard backed by companies like Philips, Texas Instruments, Nokia and Motorola to build its networks. Hope is on the way, however, as Qualcomm unveiled a new chip Friday that supports three major wireless television standards. The so-called Universal Broadcast Modem (UBM) will allow handset manufacturers to use a common chip for production of devices geared to different standards. The standards supported by UBM are FLO, Digital Video Broadcasting-Handheld, and Integrated Services Digital Broadcasting-Terrestrial, enabling mobile handsets to receive real-time content regardless of the broadcast technology selected by operators.
4. Pricing: Mobile services are still prohibitively expensive for average consumers. If you subscribe to MobiTV, for example, you pay $12 per month for 15 channels (not 15 channels you want, the 15 channels MobiTV decides to feed you).
5. Usability: Mobile devices require content that is specifically tailored to smaller screens. Soccer games are a good example: The wide angle images usually shown on TV do not translate to smaller screens since viewers simply cannot see the ball. Service providers therefore typically use close-up shots of the players instead. It is also interesting to note that three of the five most popular channels on MobiTV's service were created especially for a mobile environment. People might want a familiar television experience on their mobile devices, but they obviously watch much different types of content on them -- short videos, also called "snackable" content.
After the panel discussion, I spoke briefly with Jonathan Atkin (Managing Director with RBC Capital Markets), the panel’s moderator, and asked him about the potential of mobile applications for the enterprise. Jonathan opined that the time wasn’t quite right for an enterprise play, arguing that technologies, applications, and business models first needed a proof of concept by consumers before they would be picked up by business users (as was the case with blogs and Wikis and will soon be with online social networks, see LinkedIn or now the expansion of Facebook into the corporate world). Yet the potential is enormous; Jonathan referred to real-estate agents being able to access location-based information from their cell phones during open houses. According to the Telephia Customer Value Metrics, the real-estate industry is most dependent on their cell phones.
For the time being, it seems that the mobile services market is plagued by the same problem that beset digital music before Apple created the iPod: while there is a plethora of fancy devices and powerful applications, the one mainstream application for the consumer is lacking. It might be a matter of design or maybe it’s a question of brand power, but mobile services will not be fully embraced by the mainstream consumer unless there is one single player that will lead the market with a groundbreaking (and that almost inevitably means simplistic) product.