As
usual, we need only look to Asia to
see the future for Europe and the Americas
. As of October 2004, there are more
mobile handsets in Japan than in the
rest of the world combined and video
messaging is taking off at impressive
rates. So what can we expect in the
rest of the world? And how will operators
leverage technological advancements
to effectively deliver the mobile entertainment
applications that subscribers want,
adding new streams of revenue to their
bottom lines?
Reading the Subscriber
According to the Yankee Group's 2004
European Mobile User Survey, voice calls
and SMS messages are still the primary
drivers for mobile phone usage. Less
than 40 percent of subscribers use ringtone,
icon, and photo applications on their
mobile phones, and the use of location-based
services and mobile gaming hovers near
the 20 percent mark. While there is some
traction in the mobile entertainment
market, clearly, there is a lot of room
for growth in these areas.
The success of the ringtone and ringback
markets indicates that entertainment
applications are likely to continue driving
ARPU increases. A recent consumer mobility
study conducted by InStat and released
in July of 2004 indicates that 11.4 percent
of mobile subscribers are very or extremely
interested in purchasing full-featured
music applications, including MP3 downloads,
and news/talk content. The study also
found that monthly service fees tended
to be about 14 percent higher among likely
mobile music adopters.
So
the good news is that there are subscribers
interested in mobile entertainment
applications – and
willing to pay a premium for
them. On the other hand, we're seeing
that a vast majority still see their
mobile devices primarily as communications
tools. What's missing, and how can we
in the industry make these applications
compelling, and in turn make money from
them? The answer lies in the user experience.
We must understand how the customer wants
to access and be charged for these services
and we must make the applications compelling.
What Subscribers Want
The
early days of the wired Internet brought
about a sense of excitement because it
was possible for people to form new types
of communities unrestricted by geography.
3G is heralding a similar revolution.
We already see many operators undertaking
affinity-based marketing initiatives,
including promotions and entertainment
applications tied to sports teams, music
groups and television shows like “American Idol” in
the U.S.
Recently,
in the U.S. , the sports cable television
network ESPN struck a deal with Sprint
to provide a content-based service targeted
at sports fans. ESPN Mobile will launch
in the U.S. in 2005 with value-added
services such as streaming sports audio
and video, graphics and news. Both Sprint
and AT&T have launched
mobile video news and entertainment
offerings, with Sprint TV subscribers
paying an additional $4.95 per channel
per month for access to entertainment,
weather and news content, with video
streamed live to their handsets at the
rate of 1-2 frames per second. Some analysts
estimate as many 150,000 subscribers
so far for the service, within
a year of launch.
Still
operators will face a challenge managing
and marketing to distinct segments by
offering specialized content. Their current
service provisioning systems and marketing
processes don't account for vast stores
of disparate content and tracking subscriber
interests and usage. At the same time,
offering segmented applications could
result in the “silo-ing” of
content, further frustrating
subscribers and slowing adoption. For
example, a subscriber who wants to access
the same music clip for both ringtone
and ringback applications will not want
to self-provision (and possibly pay)
for the content twice. Yet operators
may find themselves in that very situation
if their content delivery strategies
are not carefully planned and coordinated.
Subscribers
and operators alike face a challenge
when considering content ownership and
storage. Ringtones have been problematic
for operators because they reside on
the handset and do not present recurring
revenue opportunities. Nor do they address
churn issues since the subscriber can
take their handset – and
the ringtones – with them should
they choose to switch operators.
Subscribers on the other hand,
face the challenge of storing
large content files on their
mobile devices. As video applications
continue to develop and the library
of audio files, games and other
content continues to expand,
storing these applications on
the mobile device may impede
performance, or worse, be impossible.
Operators must address these
challenges to truly capitalize
on the rapid pace of mobile entertainment
application development.
Meeting the Challenge
So
how can operators plan their mobile
entertainment strategies to ensure
they are able to recoup network investments
by offering compelling content and
building new revenue streams? The answer
lies in the management of those applications
and the way they are delivered to subscribers.
The industry needs to adopt a customer
content relationship management – approach
to mobile entertainment applications.
What does this mean? At its most basic,
the concept involves marrying mobile
entertainment content with service delivery
platforms. More broadly, this involves:
• Making
content available across multiple applications
• Tracking
user preferences and using the data
intelligently to upsell and provide
a satisfying customer service environment
• Storing
content on the network (both operator-offered
and subscriber-created) in a way that
makes it easy to access
• Providing
access to new applications in an easy-to-use,
intuitive way
A unified mobile entertainment strategy
and platform, driven by the CCRM concept,
will allow operators to truly capitalize
on consumers' desire for mobile entertainment
applications by improving the user experience.
In an optimized environment, subscribers
will be able to access audio, video,
gaming and other applications easily,
operators will be able to offer new applications
quickly and with minimal network disruption,
and increase ARPU significantly in a
short timeframe.
Conclusion
Handsets,
networks and consumer behaviors are not
the gating factors for broad adoption
of mobile entertainment. Operators must
realize that their back office systems
and strategic planning will make
the difference as they look to capitalize
on the growing demand for new
applications. Significant subscriber
uptake will be driven by the user experience – an
issue which operators must address in
order to see significant returns on their
network investments.
Through strategic planning and adoption
of the CCRM model, operators can provide
consumers with pricing they can understand,
easy access to content, and the ability
to self-provision and change their services.
Once that has been established, there
will be no limit to the ways subscribers
use their mobile devices to access entertainment
applications and a whole array of possibilities
for operators who want to leverage their
3G networks to increase revenues. |
