Content Makes a Comeback

By Edwin Yapp

CONTENT IS KING – SO SAYS THE adage. And this saying perhaps finds its truest meaning in the highly competitive mobile telco world. But as important as content is to the mobile space, more publicity has been given to the development of mobile infrastructure compared to the content side of the equation.

The speeds at which services that have been rolled out claim to transmit – from a maximum of 384kbps (kilobits per second) 3 years ago to over 1Mbps (megabits per second) today – have also increased. And just before the dust settles on 3G, there is talk about 4G and the associated acronyms that go with it – WiMAX, LTE, UMB – to name a few.

As innovative as telco vendors have been over the last few years in bandying acronyms and technology jargon, sceptics have remained cautious about the take up services that these technologies are supposed to exploit.

Many analysts have pointed to the fact that despite the progress made in radio access technologies and their associated backend technologies, one area that still remains a stumbling block is content, or the lack thereof.

However, at a gathering of a panel of experts at the recently concluded CommunicAsia conference and exhibition at the Singapore Expo last month, some industry players argued that the tides are turning, at least for the content world.

The panel, entitled CEO Perspectives: Digital Content and Services, was moderated by Andre Levisse, partner at management consultant firm McKinsey & Company.

The panel comprised five executives: David Ko, managing director Yahoo Connected Life, Asia Pacific, Niren Hiro, vice-president, Business Development for mobile advertising company Admob, Mauro Montanaro, CEO of mobile content player Jamba, Richard Tan, business director, Telkomsel Indonesia and Emilio Umeoka, president, Microsoft Asia Pacific.

EVOLVING LANDSCAPE

There are three things that are changing in the mobile world today which have the potential to influence the content world.

`Firstly Nokia announced its plan to go into services by its acquisition of (map data provider) Navteq. This effectively signals its shift into digital content. Secondly, Google announced its intention to get into mobile platforms through its Android operating system,’ says Levisse.

`Lastly, the amount of interest that has been generated as a result of the launch of Apple’s iPhone, and how revenue can be shared by telcos and device makers,’ he says.

Underpinning these factors, Levisse pointed out, are several other broad aspects that could be seen as driving new trends in the content world.

Mobile data today, he notes, is cheaper than it was a few years ago and this has changed user behaviour. Adding to this is that good devices, particularly 3G handsets, are also beginning to shore up, and this is adding to the momentum, he added.

Jamba’s Montanaro acknowledges that the mobile content world has indeed been disappointing over the last few years but concurred that things are beginning to change as users can subscribe to cheaper data plans – many of which are flat-rate offerings- and handsets are more compelling today compared to yesterday.

`The challenge lies in how we market the content and how we make the consumer aware of this,’ he says.

Montanaro also adds that in order to provide compelling content to users today, operators would need to get big media companies on board so that they can back the content.

`We need “stars” and “hits” too in this business,’ he says, referring to big name studios which to date have backed mobile content players in a big way.

Telkomsel’s Tan offers that from the perspective of a mobile operator, a transparent business revenue sharing model for content providers (CPs) has helped spur its content business in Indonesia.

`Indonesia is a huge market and most CPs are delighted to work with us because our model allows them access to this large market,’ he says.

Tan adds that, coupled with the reduction in data plans prices and a wider variety of content, particularly user-generated content, has really augured well for Indonesia’s mobile operators.

Yahoo’s Ko argues that in order to build an ecosystem of developers for mobile content, the industry needs to encourage an open platform so that content publishers can get their content onto devices.

An open platform, he says, would enable smaller but innovative content developers to get their content out there, as many of these players do not have the financial capability to otherwise get their work out to market.

THE MOBILE AD CASH COW

One definite sector that shows promise is mobile advertising (mob ads), considered by many to be a subset of mobile content. While the majority of panel members expressed caution to varying degrees about the revenue potential of mob ads, they generally agreed that mob ads are definitely an upward trend.

So confident was Yahoo about its prospect that it announced on the sidelines of CommunicAsia a strategic partnership with Maxis Communications and India’s Idea Cellular mobile, in which both mobile operators will carry a variety of innovative graphical ads on their respective Wap portals.

In Malaysia, the deal will see Yahoo and Maxis combine their expertise in the industry and knowledge of consumer habits, enabling leading brands to offer consumers targeted advertising specifically created for the mobile environment, according to a joint statement. Maxis’ first mob ad customer is Taiwan’s IT gear maker, Benq.

The deal comes on the back of Maxis’ collaboration with Yahoo on its mobile search product dubbed oneSearch launched last year at the same event.

Yahoo’s Ko says the partnership with Maxis demonstrates Yahoo’s continued focus on becoming the must-buy opportunity for advertisers and further extends its leadership in graphical advertising across mobile devices.

`We are excited to work with Maxis to create superior experiences that deliver great value to advertisers and mobile consumers alike,’ he says.

According to Prashant Mehta, vice-president and head of advertiser and publisher group for Yahoo, the industry has `reached a tipping point’ where mob ads are concerned. Acknowledging that the industry has heard this before, Prashant notes that `this time, the scenario is different.’

`Half the world’s population has mobile devices. And there are expected to be 600 million 3G-enabled handsets by 2010, of which an estimated 350 million devices will be able to access the Internet,’ he says.

Prashant also points to the various analysts’ forecast for the potential of mob ads, citing the business to be worth between US$14 billion and US$16 billion by 2011, up from US$2 billion to US$3 billion today.

`Carriers (mobile operators) recognise the potential of mob ads and have been creating better data plans to support this growth,’ he says. What’s more, large advertisers are asking companies such as Yahoo about the mobile channel and how it can be tapped to deliver high value to subscribers.’

However, Mehta acknowledges that to make the mobile channel effective for mob ads, the user experience must be good, advertisers must target the relevant demographics and the mob ads must be device agnostic.

CAUTIOUS OUTLOOK

According to T.Kugan, general manager and head of products and infotainment business at Maxis, the partnership with Yahoo shows Maxis’ commitment to enhancing its strategy and harnessing the power of mobile advertising to create new revenue models.

However, despite this revenue potential, Kugan declined to reveal what Maxis’ expectations are from its mob ad venture, saying `that mob ads are still in their infancy.’

`It is not so much about the revenue for now as it is about the getting the user experience out first,’ he says.

Asked what were Yahoo’s revenue expectations, Yahoo’s Ko says: `We don’t reveal such numbers. However, if Maxis had not thought that the potential was there to exploit, it would have never committed itself to launching mob ads on its portal, and Yahoo would not have had the opportunity to jointly launch mob ads in Malaysia.’

Ko also says that the launch of mob ads syndication in Malaysia and India were not because of any particular reason.

`The two operators were ready and we are prepared to partner with whichever operator that’s ready to launch,’ he notes.

Recognising that the future of mob ads is still in its infancy, Maxis’ Kugan acknowledges that there are several factors, which need to be worked through such as the need to implement a permission- based model instead of pushing ads onto its subscribers.

`We need to get the experience right before mob ads will take off in a big way,’ he says.

Admob’s Niran added that for mob ads to work, the industry will not only need to get the experience correct but there must be a market for products in the segment a company is advertising in before mob ads can be exploited.

`Large advertisers will stay where the consumers are at the moment. However, mob ads will work where there is relevance to the customer, such as tech companies seeking to advertise through the mobile channel and where a “click-to-call” feature would work,’ he says.

(c) 2008 Malaysian Business. Provided by ProQuest Information and Learning. All rights Reserved.