It was in November 2005 - I was at a bar in Kiev, Ukraine. I am on a business trip in a land of Bentleys and a missing middle-class. Around 2am a young lady sitting at the bar looks at me between puffs from her waterpipe and clearly wants to say something. I approach her and she tries to say something but I don’t understand. She pulls out her new and fancy Samsung multimedia phone. She types something on the screen and shows it to me. Quite dumbfounded I grasp the situation and answer back the same way. She has some family photos on the phone, we check them out. She has funny video clips of herself plus some downloaded comedy clips and we watch those. Honestly, she had that funny video clip where the cat gets mangled in the ceiling fan, remember? She had it on her phone! The phone had all her life on it! She lives through it. Her maneuvering the keypad is fast like a lightning when she jumps between menus and enters text. We are in Ukraine, a third-world country. She’s deaf-and-dumb. Her name is... Anina. Returning to the US I continue to communicate with her via text messaging. Suddenly there is an interoperability issue, I receive her messages but she does not receive mine. She has no email. I cannot call her and talk to her because she would not hear. T-Mobile, you’re killing me!
So now I know two Aninas: one in Kiev and one in Paris (www.anina.net), both mobile bloggers in their own way. Should I call Jim Jarmusch and suggest a sequel to his 1991 movie Night on Earth (http://www.imdb.com/title/tt0102536/)? It would be called Night on Earth: Five Aninas, Five Cities, Blogging for Life. Now I just need to find three more Aninas…
I took a break in writing the newsletter, I felt there was little to say that had not already been said. If you read www.moconews.net and www.digitalmediawire.com you pretty much know what’s going on. The need to give a personal perspective through blogging is there but I need to give the industry some time to make new mistakes…
I believe 2006 will be a terrific year for the mobile industry. Most things follow the logic of ketchup being tricked out of a bottle: you first try every possible technique in vain and then suddenly it will all just start flowing on your plate without any visible reason. There is still a lot of hype on the market, let’s all try to measure the temperature.
Best wishes for a Successful 2006!
Warmest regards,
- Tapio Anttila
- www.anttila.net
MY 2006 PREDICTIONS
Here are some sentiments and predictions as to what might happen on the market before the end of 2006, particularly on the US market.
1) Mobile video and many other new services continue to be over-hyped. The theme of the 2005 holiday season for the mobile industry in the US was… colorful faceplates. The pink RAZR of T-Mobile. There was a craze about suddenly having a wealth of options to the boring silver line of products that had been shipping before. Forget all the hype about mobile video, this Christmas market was really that of colorful faceplates! Next holiday season in December 2006 will not be about mobile video, either, because mobile video over cellular will not scale. There will be something else, a bit less sexy but probably something a bit more technical than faceplates. How about WAP?
2) Original programming will start to flourish. In 2006 top Hollywood talent will sign up for production of innovative mobile entertainment. A prelude of this in 2005 was the announcement of AMP’D mobile signing up the producers of such Emmy-winning show like The Simpsons and Real World. In many regards I consider this to be the most significant announcement in 2005 - it show that the creative elements in Hollywood are getting involved. While in Finland I heard rumors that Nokia would be discussing production of a Nokia-funded mobile movie together with the producer of Mr and Mrs Smith. Angelina Jolie and Brad Pitt were supposed to be visiting Finland, too bad I missed them…;-).
3) iTunes will develop into a competitive media delivery platform to mobile phones. I believe the marketing savvy of Apple will help build iTunes into a serious contender (on the US market) as a media delivery platform. Down the road Apple will of course launch also smartphones (better than the one out there now) that enable the iTunes functionality. Apple might very well be the surprise performer on the mobile content market in 2006. They recently ditched their iTunes ringtone offering (according to rumors) but we should not count them out, quite the contrary. It is not a good idea to ignore a great marketer in a market were more or less everyone else lack that competence.
4) The bubble will grow slower. There are signs of the VC investment frenzy and M&A activity calming down a bit: M&A valuations have actually come down significantly from the height of the hype which can perhaps be defined as the $90m Airborne acquisition by Cybird. Materialized revenue multiples have since been systematically at a lower level. Silicon Valley is still throwing money at mobile startups and VCs are sending me emails like “we are going to give these guys $10 million, do you think young people would use this service?”. Maybe they will come to their senses and the bursting of the bubble will be a silent puff. Unlike in 2000, there is a real market to build upon this time around, both on the mobile and broadband wireline side of the market.
5) Content rating requirements by carriers will slow down market growth. There were some reports from the recent Mobile Marketing Association (http://www.mmaglobal.com/) meeting that indicated that content ratings will be implied by all US carriers and that all content will need to be PG-13 until those ratings are in place. I feel that there will be a lot of regulatory activity going down and some of it is well justified. In any case it will dramatically hamper the commercial short-term potential of ‘racier’ material prepared for sale or planned to be made available as mobile marketing campaigns.
There are also some aspects of the market I don’t have a great visibility into or a strong opinion on at this point. It will be interesting to see how the following things will pan out:
1) MVNOs. It is probably too early to say even by December 2006 how successful they will be. There are MVNOs like VOCE Wireless who have a very strong story on paper - focusing on carriers’ most lucrative customers is not a bad idea. There are companies like SK-Earthlink who have so much financial resources behind ($400m+) that their short-term success is an irrelevant question. AMP’D Mobile seems to have a good deal momentum going, particularly after the investment from MTV. It is perhaps harder to see the immediate success of Disney’s two MVNOs (Disney and ESPN).
2) Filling the gaps, lifestyle programming. There is a strong emerging focus on the market to discover and build content offerings for niche lifestyles. For example, content programming efforts of Forum Nokia have a solid entertainment industry focus under the leadership of George Linardos. Infospace says they have as one of their focus area the new fashionable trend of megachurches and religious programming in general. Lots of smaller companies are popping up: in the wellness lifestyle at least Omstream (www.omstream.com) and Buddha Mobile (to be launched) will be focusing on mobile content for the “generic-spiritual” lifestyle. A startup in San Francisco (to be called Mobile Endorphin) will focus on “alternative lifestyles”, such as tattoos, piercings, fetishes to name a few. The big question is whether these services will find a big enough audience and whether carriers will have any interest to support them. Of course here the emerging off-deck distribution channels will offer a viable alternative.
3) Mobile web services. I cannot help mentioning this emerging trend which promises to make it a lot easier to launch carrier and handset vendor independent services in the future. On the broadband side one of the major announcements in 2005 was the web services initiative of Realnetworks. Now I can enjoy my Rhapsody music service through a browser plug-in on my Mac-Mini even though Apple has refused to make the service available as it competes with iTunes. This is where the next big battle will be on mobile content and Google (as the nouveau Microsoft challenger) will lead the charge.
SOME COOL COMPANIES
ZoGo. Launching virally in the New York area, ZoGo focuses on anonymous voice dating. Through a web/WAP interface a user can browse profiles and launch an anonymous call request. If accepted, an anonymous premium rate call will be connected. A great idea! www.zogo.com
BurnLounge. BurnLounge is to music what HerbaLife is for dieting. While that might be a slightly sarcastic comparison we are talking about similar things. Here is a multilevel marketing model applied to music and awaiting its mobile strategy… www.burnlounge.com
MobilePlay. Mobileplay has launched a new advertising-driven service that allows consumers with personal digital assistants and smart phones to download free games, news, weather updates, and other content. Free sounds always good - maybe this will help kick-start the market. www.mobileplay.com
DIJJI. Dwango USA disassociated themselves from the Japanese mother and were renamed DIJJI (sounds a lot like ‘ditch-it’…). The company has been in the ropes for some time and in the next three months it might become the first casualty in the mobile content game - unless they get extra funding like Summus did. A not-so-cool company. www.dijji.com
GREAT GUYS & GALS OF THE INDUSTRY
Joe Hurd. The guy who launched Friendster’s mobile service in Asia is looking. Until very recently, he was the VP of BD and GM, International at Friendster, where he monetized the social networking company’s operations in SE Asia. He is looking to help the next hot mobile content startup expand internationally. You can reach him at jhurd@katamagroup.com.
Paul Palmieri. Again? Well, I just met with Paul ‘Soprano’ Palmieri who was until recently the most feared character in the US wireless industry (on behalf of Verizon). I can tell that Paul is now one of the big proponents of the off-deck model in mobile content business. He kinda reminds me of this 60’s stalinist student in Finland who later in life became the CEO of the largest bank and the richest man in the country… paul.palmieri@actawireless.com
RECRUITING
WAAT Media: WAAT, the leading mobile adult services company is looking at bringing on someone to help manage all of their off-deck psms activites in North America (and potentially abroad) - not so much from a sales perspective but from an operational and account management one. Please contact Dave Waldman (dave@waat.com).
EVENTS, BLOGS & SOURCES
Consumer Electronics Show is approaching next week in Las Vegas. 150,000 people… together with AVN Adult Entertainment Expo. Lots of reasons for a mobile professional to be in Las Vegas next week. I am going there for Victor Harwood’s Game Power & Mobile Entertainment (part of the Digital Hollywood series of events). It will be a great event - see you there! http://www.digitalhollywood.com/GamePower06.html
My favorite news sources: I have only time for two these days: www.moconews.net and www.digitalmediawire.com. That will get you covered.
Of other news sources you should notice Wireless Watch Japan (http://www.wirelesswatch.jp/).
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Disclaimer: Opinions presented herein are those of the undersigned and do not represent the position or message of any company I might be affiliated with.
