FEATURE 

Mobile Content

Mobile is a growth area. The advertising industry is starting to take note and content providers are looking at possibilities beyond SMS & ringtones – the mainstays up until now. Andrea Kirkby looks at some of the issues facing publishers.

By Andrea Kirkby

News Corporation’s recent acquisition of Jamba, the company behind Jamster and the Crazy Frog, put mobile content firmly in the media spotlight.

Murdoch clearly believes not just that the next generation will be ‘internet natives’, but they’ll be accessing their content on the move.

Mobile content is a huge growth area. Research house Informa estimates that mobile advertising alone will grow from USD 871m this year to USD 11.4bn by 2011.

And mobile is no longer just something for teenagers or the early adopter. Matt Jerwood, head of mobile at Dennis Publishing, says this has changed remarkably quickly. "Six months ago I would have said our readers were early adopters, but now I’d say mobile’s gone mass market."

Paid-for model

Unlike internet content, most mobile content isn’t free – consumers expect to pay for mobile content as they pay for calls and SMSs. Alexandra White, of the Association of Online Publishers, says "that’s a healthy place to start," though she admits that several services are offering free trials to get their user bases established. And the Independent’s Richard Withey has noticed that, "because the pricing isn’t very upfront – you only really realise when you get your phone bill – there’s less of a perceived barrier" and users are more likely to pay for the value-added service.

And even better, says Matt Jerwood, because the price of content goes on to the monthly phone bill, "it’s very easy for people to spend – one click and they can buy stuff from us." Because in most cases the operator collects the payment, remitting only an agreed margin to the publisher, that makes payment easier to collect.

A lot of interesting products are now being launched. And as 3G becomes more common, and handsets become more sophisticated, sexier applications have become possible.

Growth areas

Alex White of the AOP believes that "the whole area of video over mobile is going to be pretty big." So far, only 11% of users watch video on their mobiles, but this number is growing quickly. Dan Winterbottom points out that while video use is picking up slowly, MMS is growing faster – perhaps because consumers are already used to the similar SMS text message.

User generated content is also going to be a big trend, thinks Dan Winterbottom, senior analyst with Informa. He points to 3’s successful launch of See Me TV, which allows users to upload their own short video clips and view others. Matt Jerwood too thinks video could be as successful on mobile as it has been on the internet with YouTube – but the challenge, he says, is how to make it relevant to your media brand. Users’ videos from motor shows might work well on evo, for instance.

Matt also points to location based services as a potential growth area. These haven’t worked in a big way yet, perhaps due to privacy issues, but proximity marketing together with the need for local and geographical data (restaurant guides, weather and traffic reports) makes this a powerful medium for publishers.

Distribution channels

The distribution channel for mobile content is still dominated by the network operators’ portals. On- versus off-portal presence becomes a major branding decision for publishers. Alex White says, "Some are finding that they want to go off-portal as well as having operator based portals, to cover all the bases" and enable consumers to access the content directly or indirectly.

However, off-portal alone still doesn’t look like a viable option according to Dan Winterbottom, unless your content is very specialised. He warns, "It’s very much a battle of wills to protect your brand from being diluted – but, if you go off-portal, you don’t get the audience reach." So Conde Nast, for instance, took the decision to cobrand the ‘Style’ section on O2’s Active portal.

Matt Jerwood underlines just how important the portal business is to publishers. "We have our own WAP sites," he says, "but 90 to 95 percent of our traffic comes through operators’ portals. It’s a bit like the olden days of the internet when everyone went through AOL or Yahoo to access the web – everyone’s still going through the Orange or Vodafone portals." This will change over time, but, for now, it’s a fact of life for the publisher.

Conversely, publisher-generated content can be important for the network operators. Alex White says that the 15 magazines now contributing content to iMode account for 34% of all page impressions and 67% of active subscriptions, "so they are really important to the portal – it really shows how well media brands are translating to mobile."

The content mix

Mobile content has been around for a while now and many publishers have content portfolios including a number of different products and a mix of paid for and free content. Often, news and some features are provided for free and it’s the sale of ringtones and wallpapers that make the money. SMS alerts are also still going strong in B2B areas with MediaGuardian and the FT both charging for such a service.

But SMS and ringtones are rather dated products in a fast changing media market. They may still be making money but the growth may be elsewhere – in fact industry analyst MusicAlly predicts the UK ringtone market will decline for the first time ever this year.

So Chris Osborne of FT.com believes publishers now need to take stock. "We’re going through a process of rationalising the legacy stuff and deciding what to keep and where it fits," he says – which products are useful and worth keeping, and which are now too dated.

Not all publishers have adopted mobile with the same enthusiasm. The Independent doesn’t have a lot of mobile content, while the Guardian, on the other hand, has launched a number of services including its own downloadable news application with On2Go. Its strong branding – the Guardian’s red strips and classic typeface – together with graphical advertising and a ‘click to callback’ option should make it attractive to reader and advertiser alike. Other applications include alerts and sudoku subscriptions. Though it’s too early to see exactly which applications will last the course, Simon Waldman is a great believer in mobile content in general, and says "mobile is going to be an increasingly important platform for us."

Mobile could well be an increasingly profitable medium too. At Dennis Publishing, Maxim ("a highly visual title," Alex White says tactfully) as well as EVO, Poker Player and Inside Edge are making good money from mobile. "Yes, it makes money," says Matt Jerwood - "It’s one of our most profitable areas."

But, selecting the right content for mobile use is tricky. Matt Jerwood says, "Mobile content is about trying to pass two minutes when you’re bored – it’s not replacing the magazine, it’s not better than the web." So he looks for "bite sized" content. Richard Withey believes that certain types of content adapt better than others - "the helpful reference stuff – maps and things like that – anything locational works really well on a mobile." As publishers found with the internet, you can’t just throw content at a new medium – it has to be carefully selected.

Technology hurdles

The mobile market itself also creates problems for publishers. It’s a very mixed market technologically, with a number of different solutions – SMS, MMS, WAP and iMode, as well as the slightly different markets for Blackberry and other PDAs. Publishers need to adapt their content for different networks, technologies and devices. That’s very different from the now fairly standardised internet. "Handset compatibility is still an issue," warns Alexandra White.

Besides, devices continue to evolve. Richard Withey has been particularly impressed by the Sony Reader which launched at the Frankfurt Book Fair this year and the Illiad from Philips. "We might see a merger of all the devices," he says, "so you could actually download your newspaper wirelessly." Others believe the iPod may add mobile functionality. If that happens, there’ll be a whole load of new issues to address.

And print media start out in mobile with something of a disadvantage. The mobile medium prioritises sound and video, playing into the hands of the broadcaster. ITV has already launched news bulletins to mobile phones, and O2 did well, in market share terms – if not financially, with its football World Cup clips. Alex White says, "People who’ve already started using audio and video are going to be well placed – broadcasters are of course better placed than publishers focused on mainly text and image."

The remaining problem is the way revenues are split between the network operator and the content provider. Alex White says, "There are a lot of models and the market is still not clear." WAP was bedevilled by complaints about the poor returns for content developers, while iMode has delivered a healthier rate of return. That may be why the latter system seems to be introducing some of the more interesting content.

Richard Withey is less diplomatic, and asserts "The terms proposed by the networks have been miserably disadvantageous to the content provider, so it’s not worth developing anything really new." Unless this changes, he believes the market could stay stuck at the ringtones-and-SMS stage – which would be a pity given the opportunity to develop interesting new applications and services.

And life is getting a bit more difficult – as the decline in ringtone sales shows. Matt Jerwood looks back to the early days of mobile content with some nostalgia. "The low hanging fruit for us was, do a picture of a girl. That worked really well for us. But now, every man and his dog can do that, so we need to do cleverer things."