U.K. Mobile Content Market Worth $1.3 Billion In 2006, Sales Set To Reach The Tipping Point

location based services

By Peggy Anne Salz - Wed 30 May 2007 01:03 AM PST

A new Informa Telecoms & Media report (via an e-mail release) contends the U.K. mobile content market is “on the cusp of becoming multi-billion dollar industry.” But that boom can only become a reality if the mobile industry can tap into “an addressable market approaching 50 percent of U.K. mobile users.” That’s a big “if” by any standards.

Get past the superlatives and the survey of some 2,000 subscribers - in collaboration with mobile operator Orange UK and fieldwork partner Starcom Mediavest —sheds some important light on user behavior and content preferences. Overall, the mobile content market was worth 661 pounds ($1.3 billion) in 2006, with half of revenues coming from the so-called “mobile cash rich” segments of 25-34 year olds.

Among the key findings:

--35 percent have used the mobile Internet (including WAP browsing). Location-based services and mobile banking topped the list of services users would most like to see on their mobile phone.
--Regular buyers of mobile content, those who purchase a minimum of one item of content every three months, represent one-fifth of mobile users.
--Occasional consumers, those who will purchase at lease one item of content per year, account for 30 percent of respondents.

The challenge: If the wireless industry can encourage these occasional spenders to regularly consume content, the addressable mobile-content-market spend over a three-month period will expand by 150 percent, according Nick Lane, Informa principal analyst and author of the report.

While half of respondents said mobile content prices were too high, the survey revealed they are nonetheless willing to spend 5 pounds ($10) per month on mobile content. Services and content priced above this monthly threshold will appeal to less than 5 percent of users. “This is presenting the industry with a dilemma: as premium rate pricing for services such as mobile TV could potentially cannibalize revenues from other services within the mobile content ecosystem,” Lane said in a statement. Indeed, mobile advertising, which picks up the tab for mobile content, may be the only way out of this dilemma – and the way to tap the potential of the growing user base.

Meanwhile, some other recent Informa stats (reported in The Guardian) show that mobile content is no longer a fledgling market overshadowed by the much larger market for content consumed via the fixed Internet. Revenues from the Internet are pegged at about $25 billion, but Informa estimates mobile content sales to be worth $31 billion.

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