Mobile Phones As Mass Media: Models For Content Distribution - Part 2
The history of media follows the same path as the history of humanity and it is made of great discoveries and progressive changes.
Photo credit: Sanja Gjenero
In the early 2000's, for example, we get to know the seventh mass medium and the second interactive media: the mobile. Mobile media, like the Internet before it, is capable of swallowing all of its older siblings, even the Internet itself. The consumption of news, the playing of music, watching TV, listening to radio, even viewing movies are all possible on a mobile device. And the Internet's two unique capabilities, interactivity and search, are also available on the mobile platform.
While mobile media is only eight years old, it is growing and greedily capturing business revenues and content from its older media siblings.
Mobile media can in fact replicate all of the capabilities of the other six mass media while sporting six unique benefits:
- The first personal mass media
- The first always carried media
- The first always-on media
- The first media with a built in payment mechanism
- The first media always present at the point of creative impulse
- The first media where the audience can be accurately identified
(Source: Tomi Ahonen explanation of the seventh mass media, mobile)
In this second part of this white paper edited by Alan Moore, CEO of SMLXL, you will be guided into a greater understanding of what the evolution of mobile phones as mass media has in store for you.
Today, Gutenberg would be a mo-blogger: Mobile, 7th of the Mass Media
by Alan Moore
Benefits of Mobile
Personal: My Media
It's a fact that people today are more wedded to their mobile phones than to their wallets. And the mobile is rapidly cannibalising our wallet too. A Unisys survey revealed that if we lose our wallet, on average we report it in 26 hours. But if we lose our mobile phone, on average we report it in 68 minutes. Meanwhile a 2006 survey by Wired found that 60% of married mobile phone owners will not share their phone with their spouses. A Carphone Warehouse survey found that 68% of teenagers won't let their parents see what is on their phones. It is that personal.
Always Carried: The City in my pocket
It is no longer surprising that we will not leave home without our phone. A global survey by BBDO in 2005 found that 6 out of 10 people sleep with the mobile phone physically in bed with them. A worldwide Nokia survey in 2006 found that 72% of the population use the mobile phone as their alarm clock. The phone is taken to the restroom and it was quoted at Forum Oxford that the bathroom is one of the common uses of both the mobile internet and mobile TV.
No other mass media has this intense a relationship with the audience.
Some early opinions by the newspaper publishers were that maybe the internet could offer a rival experience to the printed newspaper, but the mobile phone screen has so little "real estate" that it could not fulfil this need. This is also being proven not to be true. Mobile offers an active screen which, can be far superior to the static printed paper view of a newspaper or magazine. It just took a while for the mobile content industry to develop its formats to capitalize on the power of mobile.
For example Japanese mobile operator NTT DoCoMo has introduced iMedia - a news ticket feed that uses the idle screen mode of the mobile phone. So whenever the phone is placed on the desk or table for example, it will scroll breaking news like the CNN News Ticker on the bottom of the TV. Users can select whether they want sports news or world news or financial news or celebrity gossip news and so forth, in any combination.
When the phone owner clicks on the current news, it goes to more of the story with text, pictures - and video. The service costs 2 dollars per month and in 18 months from launch, 8 million Japanese were paying for this service, which amounts to a 16% adoption rate and a massive 192 million dollars per year in Japan alone.
Consider all subscription news services online on the internet, Japan's NTT DoCoMo has more paying subscribers on one mobile news service than all online newspapers worldwide combined. If we assume that the same rate of adoption happens around the world - and there is no reason to doubt it - this one mobile news service alone, if used by 16% of the 2.8 billion mobile phone users could generate over 10 Billion dollars of revenues worldwide. Can a mobile news service threaten a newspaper? It already does, the same service was recently launched in Portugal by Vodafone. Coming soon to an idle phone screen near you.
Built in payment
In Helsinki Finland 57% of the public transport single tickets are paid by mobile. In Croatia over half of all parking is paid by mobile. In South Africa you can have your paycheck paid directly to the mobile phone account linked to your mobile banking account.
In Soweto a barber shop has more than half of its customers paying by mobile. 20% of London's congestion charge is paid by mobile. In Slovenia every vending machine, every McDonalds restaurant and every taxicab accepts payment by mobile phone. In Kenya the maximum limit of mobile-to-mobile money payments is set to 1 million US dollars per single transaction.
And in South Korea all credit card companies enable their credit cards to the owners' mobile phones by default, offering to send an optional old-fashioned plastic credit card to the customer's home address for free. Where the internet is an iceberg that has started to rise, and parts of its impacts are already visible, mobile as the 7th mass media is mostly still submerged. But make no mistake about it, mobile will be far greater in its reach, much larger in its revenues, more influential as a mass media, more relevant as an advertising vehicle and more potent as a creative platform than the internet.
At point of Creative Impulse: Convergence of User & Creator
In the context of mobile and the web, the mobile web is focused on the user as the creator and consumer of content, as Mobile Web 2.0 author Tony Fish says, 'at the point of inspiration.' It is "Prosumption" (production and consumption). We are using the mobile platform to share information with a trusted network, we are collaborating, and we are using our mobile as a media production tool.
Witness the use of mobile technologies in the London July 7th bombings, witness the use of the mobile to bring down the government of Joseph Estrada of the Philippines, or SeeMeTV on the Three mobile network, the use of Mo-blogging at Moblog UK, which has recently been incorporated into a project with commercial TV broadcaster Channel 4. MyNuMo allows people to create mobile content and if they can sell it they get a revenue share. Even Al Gore's Current TV is noted as being a leader in the use of user generated mobile content.
Mobile makes TV interactive: Pop Idol
To illustrate its power, mobile is able to act as the interactive channel for legacy media. A good example is the global Pop Idol format, with its American Idol, Australian Idol, Germany's Deutschland Sucht Der Superstar and the French Nouvelle Star variants. Pop Idol has had over 60 runs in over 30 countries over the past five years, gathering a total of 3.2 billion viewings, where nearly half of that number has been watching the finals of any given national Pop Idol run.
More revealingly, those 3.2 billion viewers have voted a staggering 1.9 billion times, and almost all of the votes were on mobile phones, mostly using SMS text voting. The Pop Idol reality TV format alone has generated more than 600 million dollars of revenues out of viewers voting. (For more see SMLXL 2006 White Paper on Pop Idol)
Accurate Audience: The Holy Grail of marketing
The Holy Grail for Mass Media is to clearly identify an interested audience. We know what gets measured gets made, and so the more accurately we know who the audience is, the more precisely advertising and marketing can be targeted. With magazines and newspapers those who subscribe can be identified, usually by name and address.
But then we don't know exactly how many in the given household actually read that publication. And for those issues bought at the newsstand, we have no idea. With radio and TV we can only measure audiences by Nielsen ratings, a sampling of 1000 families telling us what millions watch. With cinema we know even less about the actual viewing audience.
That is the exact opposite with mobile. With the 7th Mass Media, every phone is identified and all web traffic and service content usage can be tracked. There still are imperfections, in that some mobile phone users have two phones. But for example the fact that over half of the world's phones are "prepay" accounts (where the user name is not known) often surprises people outside the mobile telecoms industry, that these accounts are perfectly and uniquely identified and can be tracked perfectly.
The only element not known is the actual name of the person. But for Playboy page views by phone number 0123 456 7890 can be tracked use after use, day after day, month after month. And we can see which other pages this user consumed, at what time of day, from which address, eg., home or work or hotel, etc that access was made.
AFM Ventures illustrated the degree of accuracy in 2007. On TV only about 1% of audience data is captured. On the internet this is about 10%. But on mobile, about 90% of audience data is captured. This is totally unprecedented accuracy in any mass media ever. And that is what's has aroused the interest of brands and advertisers as they see the effectiveness of traditional marketing communications as a pale shadow of its old self.
Data the Next Intel Inside
From who consumes our media content, to what the user consumes. The first level of audience understanding is who is our audience. That is easy to understand. Who is my audience. A magazine subscription or Nielsen rating or internet profile or cookie can get us that information. But a more powerful element is what that customer consumes.
Some internet services can capture that level of information, such as which YouTube videos a given customer has watched, but this has the internet draw-backs of incomplete user data to begin with. On mobile perfect user-information can be collected. As every click of a mobile web page is transmitted over the air (and may incur a charge to the phone bill), the mobile network operator already collects total usage information on its millions of customers, all day and all night. Perfect usage information. This is much more valuable to the media owner or the advertiser than just knowing the size of the audience. Which pages of the news feed were consumed, which were ignored, etc.
Social context of consumption
If we can understand every click and as mobile is also a communication tool, we can apply "social data analytics", to the massive flows of data. Not only discovering what we consume, but with whom. If we like a joke, to whom do we forward it to? If we receive a mobile coupon which friend did we share it with who retrieved our coupon? Only if the users are accurately identified, their actual usage is measured, and the media allows sharing, can we map out social networking dimensions accurately.
This is far more valuable to advertisers and media owners than only knowing the size of an audience.
One of the first discoveries out of the social networking analytics was the concept of the "Alpha User", as discussed in Ahonen & Moore's book Communities Dominate Brands. When communities of interest can be identified by their communication patterns and, members each be accurately identified, then it becomes a matter of tracking their communication to identify who are the influencers of the communities.
These are called Alpha Users and they are vastly more relevant to any service adoption than the previous concept of the "Early Adopters" from the marketing theories of the 1970's. Commercial social networking techniques were launched only four years ago and one of the pioneers, Xtract of Finland, reports that by using social networking insights, mobile operator Swisscom was able to increase its sales by of a new product launch by 90%.
The mobile device is the perfect platform for this to happen. Also it provides advertisers to provide relevant, contextual information and services that are "Just in Time" vs. "Just in Case," avoiding the huge wastage that is incurred with "Just in Case marketing."
Further more social data analytics enables the receiver of information, driven by commercial need to see that information as timely and relevant. It is a critical component in the migration that is occurring from what advertising was, Interruptive, to what advertising is becoming, Engaging. Engagement marketing is a very broad term, and purposefully so. At its heart, is the insight that human beings are highly social animals, and have an innate need to communicate and interact.
Therefore, any engagement marketing initiative must allow for two-way flows of information and communication. We believe, people embrace what they create. Engagement is about connecting large or small communities to content that they care about and, delivering that content in such a way that is always an emotional and valued experience. Something that interruptive communications cannot do. For more information download the SMLXL little book of Engagement Marketing.
Media content and Mobile
Music on Mobile
Most media executives know the Apple iPod and iTunes story well. In 2001 Apple brilliantly created a new market space into what many thought was a diminishing market owned by Sony Walkman on the portable music player side, and in terminal decline due to Napster on the content side. Apple turned it around, now having sold 100 million iPods in six years and creating a billion dollar revenue stream for the music recording industry out of legitimate music sales through iTunes.
What most media executives outside of music do not know, is that the mobile music industry is actually dramatically larger. Last year alone, 309 million musicphones were sold. The musicphone versions from Nokia, Motorola, Samsung and SonyEricsson each outsold total iPod shipments last year. While the growth in iPod sales is down to 40% year-on-year at under 50 million units, the much larger musicphone market of 309 million was growing at 250% year-on-year. This is the underlying reason why Apple had to rush the iPhone to the market, the iPod had lived a beautiful span in music but its reign had come to an end.
The same is true of the music content side. While iTunes delivered about a billion dollars of music sales revenues in 2006, mobile music was worth over 8.8 billion dollars worldwide. Three classes of mobile music - ringing tones, ringback tones, and full-track MP3 songs - each outsell total iTunes sales on a worldwide basis. In South Korea 45% of all music sold is sold straight to musicphones; in America less than 10% of all music sold is to iTunes.
Artists First, a UK based firm of musicians turned-technicians that enables artists to create, package and sell their content directly to mobile users and collect payment via reverse SMS. After launching in March, the service is live in over 25 countries. The company is also working on a peer-to-peer application and developing a range of content-creation tools that will allow artists to rip a part of their content and deliver it as a ringtone. The CEO Mark Bjornsgaard says:
"It's all about empowering artists to communicate directly with their mobile audiences, limiting the role of the middleman who could get in the way of that exchange and generating revenue streams from a whole range of income streams over and above the music."
Gaming going mobile
Videogaming is the second content category to follow music to mobile and has already grown bigger than online gaming. The most played videogame is not Pong or Pac Man or Donkey Kong or Madden's Pro Football on a Playstation. The most played videogame worldwide is Snake on Nokia mobile phones. But games pre-installed to phones do not power the worldwide videogaming industry any more than Minesweeper and Solitaire preinstalled onto Microsoft Windows.
The gaming industry makes money on console sales (Playstation 3 and PSP, Xbox 360, Nintendo Wii), on console game sales, and on networked games. While most internet games tend to be large format multiplayer games like CounterStrike, World of Warcraft, Lineage and Everquest, most mobile games tend to be small quizzes, sudoku games, poker etc which are better suited for the smaller screen.
Still multiplayer games are emerging onto mobile as well, such as Disney Studios' Pirates of the Caribbean, and Nexgen's Dwarf battling game Elven Legends. What is interesting to note is that at 2.5 billion dollars, mobile gaming has already grown to be larger than internet online gaming in revenues earned.
As with the internet, interactivity is built into mobile - in fact SMS text messaging is used by twice as many people worldwide as e-mail, and through SMS text messaging you can reach three times as many people as through any messaging platforms on the internet. Because of Metcalfe's Law (the utility of a communication network grows by the square of the number of network users) and Reed's Law (a collaborative network derives even greater benefits than a communication network), mobile has already become a bigger social networking platform than the internet.
And a very young mobile content category, the first mobile social networking services went commercial in 2003 as Cyworld Mobile launched in South Korea. But in only three years, by 2006, mobile social networking had shot past internet social networking in revenues, reaching a massive 3.45 billion dollars worldwide, according to Informa. This is a world record in how rapidly a new billion-dollar industry has been formed.
Even books going mobile
First books published for mobile phone consumption were released in Japan in 2002. The early concepts did not work very well. Much like so many others, the book publishers first tried to copy what worked in print, take their bestsellers, and release as mobile books. The concepts failed badly. But experimentation found success. New authors publish shorter novels to mobile before they have received deals to publish traditional books.
Those authors who do well, get their works released in book form as well. The publisher has no risk of printing thousands of books of a title that won't sell, then having to resell them at a loss. Booksellers don't have to struggle with stocks of obscure titles. But because of the payment channel inherent in mobile, very low cost delivery is possible for content which is not heavy in data load - moving text on the cellular network is not nearly as expensive as moving images or sounds.
Future prospective authors get more easily published, and publishers can test with only modest costs, the ability for a given author to find an audience. In five years mobile books have turned into an 82 million dollar industry in Japan, or across the whole mobile phone user base, the average Japanese phone user spend 90 cents per year consuming books on mobile. When this catches on worldwide, it is another multi-billion dollar content industry where mobile has cannibalized an older mass media content format.
After Cyworld opened, I hardly touched MySpace
MySpace is the well known social networking site with over 100 million users worldwide. Users post personal profiles, comments, assign indications of who are their online friends, exchange digital photos, rate music, etc. Cyworld is a similar social networking site from South Korea but older than MySpace, and built in the country with the world's highest penetration broadband internet and 3G mobile phones, Cyworld has evolved to become by far more advanced social networking site, and fully integrated onto both broadband internet and 3G mobile.
Cyworld combines all the innovations of MySpace with the avatars of Second Life, the personal virtual rooms of Habbo Hotel, the music store of iTunes, the online store of eBay, the video sharing of YouTube and the full blogging experience (blogs, web logs, personal diaries and personal publishing online). By every measure, adjusted for South Korean population size of 50 million inhabitants, Cyworld leads the world. 42% of the total South Korean population is active inside Cyworld.
Over 90% of all pictures shared in South Korea go through Cyworld and for all its immense power of videos shared on YouTube, out of less than a fourth the size in absolute user numbers, Cyworld actually generates more video uploading today than YouTube.
Its no longer a question of "should" Coca Cola or Nike or Ford find marketing tools to join social networking sites such as Second Life or MySpace or YouTube. In Korea every consumer brand HAS to be inside CyWorld. 30,000 businesses including all major consumer brands offer over 500,000 items of branded digital content for sale already. This is on top of all of the user-generated content. It truly is a virtual economy eco-system.
Eating the Big Fish
And the internet itself, currently still mostly accessed by personal computer, is rapidly being cannibalised by mobile phone. Japan became the first industrialized country where more than half of all internet access was from mobile in 2005. By 2006 South Korea and Japan joined this club and in 2006 the internet user migration to mobile of European countries such as Italy, Germany, Spain, Austria etc was in the 30% range. 19% of American internet users already use mobile to access the web. What was technically impossible until this decade, mobile access to web content is rapidly becoming the preferred choice.
As the majority of internet access migrates from PC to mobile, the first effect is that all internet content owners start to format their content with the small screen as the default. Secondly internet content owners discover the power of mobile money - Japan's Cybird was the world's first internet company that had been unprofitable on PCs but turned profitable in 2000 due to their mobile internet money streams, and made the cover of Wired in 2001 for this feat.
After the majority of internet users move from PC to mobile, the next to follow is usage and traffic, also already observed in Japan in 2006. And the next stage is that new PC shipments start to decline at the expense of new smartphone sales. This trend too was just observed in 2006 for the first time in Japan.
But what is important to notice, is that the internet was the most rapid cannibal new media ever. Now mobile is not only a faster cannibal of legacy media than the internet; mobile is cannibalizing internet access itself! That is why Google's CEO Eric Schmidt keeps repeating his mantra on the future of Google: "Mobile, mobile, mobile!"
About the author
Alan Moore is the originator of the term, philosophy and principles of Engagement Marketing. He started working on the concept in the late 1990's, which, culminated in his founding the first specialist Community Engagement Marketing company in 2001, SMLXL (Small Medium Large XtraLarge), and, the writing of the seminal book Communities Dominate Brands. SMLXL is a new type of marketing company that helps businesses and customers (to) better engage with one another. He lectures at Oxford University's short course on Mobile Social Networking.