The amazing pile of bricks the mobile operator has constructed into a giant castle of voice and data services. It feels like great kingdoms with vast amounts of land. Too bad this dream has leaders that gives its subjects large bills, outrageous taxes, and confusing customer service and spotty service (in the States). How long can we stand the wheels of big organizations? When are we going to fight a rather draconian regime?
Building off the proliferation of building out the Internet, the Telecom industry could use some shake up and building some reform. A bit of faith that it can happen, a ground swell of successes from new household names in the mobile wireless space — the revolution has begun. Part of it is coming from the increased focus from the Internet titans such as AOL, Google, and Yahoo who have use their influence on millions of followers. But we need to allow this industry like many others to undergo massive progressive change in order to seriously benefit it’s subscribers that will continually come back for more.
There has been a lot of talk about “Behind the Operator’s Firewall” and to circumvent the grip that Carriers hold. But as more and more people talk about a mobile ecosystem, we are starting to see more diplomacy in the forms of revenue sharing and short codes as one way to allow co-existance and partnerships.
This is a great start, but we need further cooperation. The “Walled Garden” approach does not insure the Publishers (content developers) will continue to accept revenue share, as they mature and attempt to become a profitable business. Publishers will need to spend more jockeying for position and mindshare amongst subscribers.
Opening up Location Based Services, Mobile Storefronts and other resources would provide a great opportunity for both developers and subscribers as we would begin to see more and more mobile services and content start to resemble the wired Internet. The caveat to all this is also creating low-cost billing models that can support subscribers consuming information, content and services that is not prohibitive.
Consumption is always encouraged. The utility companies combine my landline, cellular, satellite, and broadband into one unified bill. Software has gone through many different cycles to build business models. I remember when I wanted to purchase a PC or console game, it was payment upfront, so I had to trust that the game was worth it. Read all the reviews and maybe even try it out at the store. Return policies were stringent and things like eBay and the Used Game Market didn’t exist. This was a simple model, easy to understand and easy to consume. At the same were also familiar with newspaper and magazine subscriptions. At smaller price points, we could subscribe to an issue with content, and if we liked, continue to subscribe or stop at the newsstand on our way.
The other side of the story to look at is the Publishers (Games and Application developers). By converting from a revenue share to a subscription basis, it comes as a double-edge sword. Their most popular titles would suffer from rapid commodification while their other titles might get a boost. Would subscribers actually be willing to subscribe to an individual publisher’s subscription package? One can definitely invision signing up for a Games or Ringers subscription, but individual publishers like Infospace or mForma? Would the publishers want to get into the business of direct consumer marketing? That might be tough for some of the smaller houses, but a Jamdat (renamed EA Mobile), would certainly be able and capable.
So far, what has stood the test of time has been the Apple iTunes store. The price point of $0.99 USD a song is extremely reasonable. Why can’t the mobile operator do the same? A whole song on iTunes costs $0.99 vs. a ringer which costs $2.99 USD! And you even have to watch how many kilobytes you push over the air (overages are extremely costly). Looking at Music Download stores from Verizon and Sprint are charging hefty fees to get whole songs, $2.50 vs. $0.99. I might as well, get my music from iTunes (larger selection, easier navigation, less expensive), invest in a large flash memory card, and shuttle songs using a USB adapter.
Games and other types of digital content could potentially adopt a try before you buy model. This would encourage higher usage of content and provide more potential data usage amongst subscribers. Services such as traffic reports, restaurant reviews, news services, even photo sharing are initial subscription services with tremendous upside revenue potential. However with all subscription models, the price/value equation must slowly be commodified though adding more features and functionality for the same inital price.
The bottom line behind all this is understanding the customer and their buying behavior with introductory and value pricing to gain adoption versus maximizing the content for every last nickel and dime possible.
Rather than using a phone as a display terminal for reading, it might be best to think of the phone as a storage device (see post about Dense Mobile, Dude and Pie Chart in Mobile, Wireless Connections) with the ability to display on a digital substrate that resembles a piece of paper. Futhermore, this display interface can be folded up and put in a pocket or slipped is an attache. The connectivity of the mobile device and portability, certainly offer advantages over carrying around a notebook. Then again, this idea might cause us rethink mobile computing and make the phone the CPU, eyeglasses the display terminal, and carrying around an armband for keyboard/mouse/stylus input. Hopefully it will come in all sorts of styles, colors, shapes and sizes. I would hate the ability to NOT personalize the need to be constantly connected for the sake of fashion!
What I believe is seriously missing in the mobile space, with respect to advertising, is the fact that unlike other forms, where you are increasing brand awareness or selling an image, mobile advertising has to accelerate the purchase decision or consumption of the intented task. This is where I think the hidden value my lie. If you can’t compete in the Operator’s WAP deck, or believe that “Pay For Placement” is a zero-sum game, then maybe mobile search and mobile advertising could become star-crossed lovers to enhance the user experience. It is already known that Mobile Publishers and Mobile Operators have created a store with limitless shelf space in a compact and convenient travel size, the problem is that address the “Long Tail, Short Tail” is impossible given the current state of things. Thus, advertising needs to be one driver in making mobile commerce quicker and less painful. A Wacom Group study performed showed that “76% of mobile data users give up [in using or finding digital content] because search is too difficult” is one of many data points to validate that we cannot simply repurpose content and business models for mobile and expect them to stick.
Even more apparent is the fact that mobile phones have become such personalized devices that a feature might even come along where subscribers might even pay to not have advertising. Hmmmm. Sounds strangely familiar to XM and Sirius satellite radio. So Mr. Mobile Operator, dabble and experiment with mobile advertising — it might be worth a serious look when your ARPU numbers are starting to take a nose dive.