Just Because It's Mobile, It Doesn't Change The Economics Of Content

from the let's-try-this-again dept

Last summer, we wrote about the pending crisis in the ringtone market, which both music execs and mobile operator execs were so bullish about. The problem, it appeared, was that due to a little bit of success, both industries seemed to think that mobile content defied the basic economics that applied to all other content. It wasn't hard to see that this couldn't last -- and it appears that some are finally recognizing this, as questions abound about how to make money on mobile content. MocoNews has two interesting stories today that highlight this issue. First, is a column discussing the simple fact that mobile content is too expensive. This isn't a new argument, but the industries involved became so enamored with the price they could sell ringtones, that they thought it would last forever. Of course, they then misunderstood their own market -- believing that ringtones were the equivalent of "mobile music" rather than a personal expression. That is, consumers view ringtones not as "content" to be consumed, but as a fashion accessory to be spread around -- and thus are willing to pay differently for it. Most other mobile content, however, is content, and needs to be priced accordingly -- meaning recognizing the competition. Most people are used to accessing content mostly free online. If companies think they can charge for the same content on a mobile device, there certainly needs to be a very good reason for it, and an additional value for users (and just being "mobile" usually isn't enough).

The second piece may be even more important. It talks about how the line between mobile content and mobile advertising is blurring -- and posits this is a bad thing. There are two things wrong with this statement: It's not a new thing and it's the natural state of the market. We've said it before, but apparently it bears repeating: content is advertising, and advertising is content. That's always been true -- even if it wasn't always clear what the content was advertising or if the advertising was really bad content. None of this changes on the mobile device -- and the fact that anyone should be surprised by this revelation suggests the industry has a long way to go before figuring out how to really make mobile content (and mobile advertising) work. However, when you embrace the relationship between content and advertising, it becomes much easier to recognize what business models are likely to work, and which are likely to struggle.



Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    julien blin, Mar 7th, 2006 @ 7:30pm

    still a long way to go, but...

    The Ringtone market has a long way to go, but cross product promotions (Ringtones, graphics, video/TV..), wireless music stores, mobile advertising, subscription based offerings, off-deck content strategies should drive this market in the coming years.

     

    reply to this | link to this | view in thread ]

  2.  
    identicon
    hexjones, Mar 8th, 2006 @ 6:32am

    Re: No Subject Given

    There really isn't much more to be said than the above post.

     

    reply to this | link to this | view in thread ]

  3.  
    identicon
    Tyshaun, Mar 8th, 2006 @ 6:52am

    but...

    Mike,

    I agree with most of your statements in this piece, however, you're so hard on media companies for not accepting the "business model" where content and advertising are one and people want access cheaply. I dunno, sounds great, but businesses are like any other establishment, they look at historical precedent more than future trends. It makes sense, if I'm a big telco or music company, there should be lots of safeguards in place to deter or slow down me adopting a new "business model" just because I think it could be a winner. The biggest obstacle being that I've made lots of money in the past with the old model, so what's wrong with that. Using that mindset, I completely understand (but don't agree necessarily) why so many music and telco companies are looking to mold future use of technology in the image of what their past has been, fractured monopolies. I guess my point is, although you may be right about a new business model being the secret to success in the internet media future, we shouldn't always brow beat old media outlets for being behind the times and fighting to shape the future to look like the past, it's the dying gasps of a nearly extinct species. It seems to me the more appropriate thing to do is ask how can we make the extinction occur faster and limit/circumvent the damage the old media outlets are causing in the interim (cough, DRM, cough, cough, network neutrality)

     

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  4.  
    identicon
    Andrew Strasser, Mar 8th, 2006 @ 9:13am

    Re: but...

    True, however if you were living your life right and treating your neighbor as yourself. Would we even be having a discussion about weather or not companies will take peoples money at all cost even if it slows technology and hinders advancement. We face this everyday in our world. I'm glad to see Mike take a stand against corporate terrorism.

     

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  5.  
    icon
    Mike (profile), Mar 8th, 2006 @ 9:14am

    Re: but...

    Tyshaun,

    It's an interesting point, but maybe I'm just an idealist and believe that smart business people can recognize that there are better solutions out there that will help them be more successful.

     

    reply to this | link to this | view in thread ]

  6.  
    identicon
    scott kline, Mar 9th, 2006 @ 4:04am

    Fast Growing Trend - User Generated Mobile Content

    We are experiencing tremendous growth in the volume of mobile user generated content transmitted through our networks.
    Create-Ringtone lets users make ringtones from any audio file, and send them to your mobile phone through Wireless Access Protocol (WAP), Data Cable, Bluetooth, Infrared or Memory Card.
    It also lets users make and send wallpapers, as well as send other mobile content files, including Podcasts, Videos, full MP3's, Microsoft Office documents, etc.
    Our sister mobile user generated content network let people send any content to their mobile phone - see Mobilatory.com
    In the future, mobile users will increasingly make and use their own content.
    What do you want to make and send your mobile phone today?

     

    reply to this | link to this | view in thread ]

  7.  
    identicon
    julien B, Mar 9th, 2006 @ 6:53am

    Re: Fast Growing Trend - User Generated Mobile Con

    I am sure you guys must be competing with companies like Xingtone and Kargo (Fever Player)...people can use their solutions to create their own ringtones as well.

    julien

     

    reply to this | link to this | view in thread ]

  8.  
    identicon
    juliet, Apr 27th, 2006 @ 5:48am

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    reply to this | link to this | view in thread ]

  9.  
    identicon
    Cookie Marenco, Dec 8th, 2006 @ 4:25am

    well put Mike!

    Sorry, I came to this party a little late, but I completely agree with Mike. I have made a career in the music industry for more than 20 years specializing in high quality acoustic music. It's been a bad business model for that entire time, but I still love it.

    Your phrase 'content is advertising and advertising is content' is dead on. In creating an audiophile label at a time when quality means nothing forced me to look into alternative means of getting our content out there. With little effort, by giving away 1000 free copies, several high end consumer electronic companies called us, bought thousands of copies to co brand and place with their products. Immediately, we had broken the odds of success and the record had not been released in normal retail channels (and still hasn't).

    I believe that music can be given away for free or should have a huge value as an artist piece without expectations of career motives. I have won on both grounds. Music as advertising might leave a bad taste in the mouths of musicians who think it is beneath them to advertise... but you're absolutely right.. music is fashion... it carries a label.. it carries status.. it defines who you are. For commerce,it is much less about 'art' and much more about the person buying it.

    You've probably heard that last week the most downloaded ringtone had nearly twice as many hits and 250% more value than it's counterpart mp3/itune download. The financial media is now calling the music industry a 'leader' in the new commerce. Yeah, until free ringtones are discovered.

    On my shameless last note for advertising, I'm encouraging your readers to visit our website at www.bluecoastrecords.com if you're a lover acoustic music and want to hear the ulitmate in recorded quality.

    Again, thanks for your insights

     

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