The winter has passed fast living in the ‘fast lane’ with the mobile industry doing extremely well. Hopefully the young ones will believe me when I say that this all will come to an end at some point. Cycles have not gone anywhere, they still exist. Wise are those who are holding a sustainable job 18 months from now. Having said that, there are many underlying conditions that enable a prolonged sustainable growth and extend venture capitalists horizon and patience to keep us all sucking the nectar. The biggest of them all is the fact that the broadband infrastructure is finally being used for what it was conceived for and multimedia is finally coming of age. I spent early March making a cumbersome transition from T-Mobile to Cingular. I believe the time is ripe to experience the revamped Cingular service portfolio which is characterized by newly discovered openness and a solid roadmap towards broadband services like HSDPA. Moreover, now I can finally buy all those mobile content items available via PSMS – hopefully, crossing your fingers is always useful if you live in the U.S.A. Two weeks into the transition I have almost got my WAP settings to work, spent hours frustrated on the phone with Cingular customer support and I will expect major issues with fraudulent billing from T-Mobile as a result of canceling my subscription. I am getting more and more warm to the idea of a ‘luxury MVNO’ like VOCE who will offer a high-end service experience at a premium. Having been a Starwood Platinum member for some years I can appreciate what a concierge service can do for you: you call one 800 number and stuff just works, painlessly and according to your priorities.

Warmest regards,

Tapio Anttila

www.anttila.net

3GSM – PREPARING TO MAKE MULTIMEDIA RELEVANT

3GSM in Barcelona was bigger than even I could have imagined – it is encouraging to see the magnitude and momentum behind the industry and the launches of new network generations. In my opinion the big news is the arrival of 3.5G network upgrades – and not the much-hyped mobile TV. Being a user of Verizon’s EVDO on a laptop and having tried Cingular’s new HSDPA in San Francisco I can tell you that first of all I see no reason to chase down WiFi hotspots any longer. It is all about quality of service meeting my expectations, being able to do what I need to do seamlessly and forgetting the tools I am using. HSDPA is a clear step forward from EVDO in laptop use: web browsing is really snappy and comparable to a WiFi-broadband experience. 2007 will be the big year of HSDPA and the majority of the GSM networks in the developed world will be upgraded to it. Funnily enough, W-CDMA as its first incarnation turned out to be a almost a commercial non-event.

Now the remaining question is where to find usage for phone-based applications of those broadband services? Even though laptops will increasingly reach the masses and even though they will certainly increasingly exploit flat-fee based mobile broadband services, they will not create a mass market for mobile services in the foreseeable future. In fact, they might gain competition when purpose-built connected devices and network computing will gain ground. Could the solution be seamlessly performing real-time push media, stuff like Everypoint (http://www.everypoint.com/) whom Yahoo Mobile just partnered with for FIFA World Cup 2006 mobile service? Let’s not forget among all this mobile TV hype that faster networks will make conventional data services work fast enough for non-technical users to be impressed – that’s why even WAP services are experiencing a renaissance…

Having said all that, it looks like mobile multimedia is getting more traction than I can imagine from a personal experience (am I getting old perhaps?). My friends at WiderThan are running the Verizon mobile music platform and they say the numbers are very promising and beyond all expectations.

What else was there then at 3GSM? You know, I am losing my ability to monitor startups and figure out which ones have a chance of survival. We are back in the era of VC-funded startups and the market is flooded with business plans 90% of which are going to die in the next shakeout. For example, the market is now flooded with mobile social software startups. Which ones of those will survice and prosper? All I can say that it is a relevant and sustainable phenomenon and MySpace certainly will survive. By the way, in many ways Myspace IS the American SMS phenomenon. The young generation had to roll their own digital culture, they refused to accept something from marketers (SMS). Well, they did adopt it but MySpace is the breeding ground of youth culture these days.

GDC MOBILE – PROBABLY THE BEST MOBILE EVENT IN THE WORLD

I attended GDC Mobile in San Jose and I cannot stop admiring how good an event Rob Tercek has been able to develop out of it. The sessions are informative and in some cases a real crash course to the state-of-the-art in mobile gaming. A case in point was the traditional presentation of the best in mobile game innovation by David ‘DC’ Collier and Matthew Bellows, a highly informative look into the latest stuff particularly from Japan. Please ask DC for the presentation URL: d3ntaku@gmail.com.

One of the leading themes was “made for mobile”, the need to develop content separately for the mobile platform. It is great to see Hollywood finally embracing this wholeheartedly. It is partly a result of mobile content now being seen as a major future revenue generator: Hollywood executives usually see all the right things when they can afford to come out from the hiding. Ricci Rukavina, the mobile studio head at Disney gave a brilliant presentation on the topic.

Overall, I really recommend you make GDC Mobile part of your travel plans for March 2007!

CTIA – THE SHOW WAR CONTINUES

CTIA in Las Vegas more ‘business as usual’ – the tide seems to raise all the boats. Unlike at 3GSM, the CTIA show floor had content companies and networking hardware companies mixed in happy disharmony. The mobile industry in the US is still relatively speaking less focused on content as they need to finish the war on all levels of infrastructure technology. In Europe the infrastructure is a given and the focus is on innovating for the end user.

The mobile content shows MECCA and MES continue the war for trying to kill each other. I attended both shows this time and I have to say both were useful – but what a waste of opportunity to split the audience this way! MECCA had a far better program and better organization but MES was more intimate and offered better networking opportunities.

Among the conference program there were presentations of the ‘untouchables’ – the heads of wireless data for US carriers. Michael Gallelli of T-Mobile confirmed (with enthusiasm) my earlier observation that the US mobile market at the moment is all about personalization and colorful faceplates. Jim Ryan of Cingular gave an animated presentation highlighting the traction on the US wireless market (according to him Cingular is nr 3 in the world in wireless data revenue). He went on to cheer the crowds by repeating what I heard an Openwave executive say three years ago: United States is not lagging behind in wireless innovation. That’s nonsense. The rate of adoption is high and US is catching up but just yesterday I heard from a developer how much more advanced Brazilian developers are because ‘it seems they have done most things already three years ago’. US is an import market and the carriers are well aware of that. It will actually continue be an import market until the pace of innovation in the US is so much fueled by VC money and those start-ups so well grounded that they can compete for carriers’ attention. That will take at least another year.

MOTOROLA RAZR – ANOTHER PIECE OF FINNISH INNOVATION?

Actually I am not sure I would want to credit this to my countrymen, RAZR is actually not that great of a phone… But the urban legend is out there – from quite reliable sources – that the Motorola RAZR technical hardware design was originally done in Heinola, Finland at the facilities of a global contract designer-manufacturer Flextronics. The design was then offered to Nokia who refused it mainly based on logistical problems associated with the manufacturing process for this type of a slim design where the components are stacked one after the other horizontally. After that Motorola saw the light and picked up the design, raising certainly some eyebrows in the Nokia organization.

SOME COOL COMPANIES

ShoZu. I met with Marc Brown, CEO of Buzznet. Buzznet is getting good traction for their affinity-based blogging service and mark demoed to me the photo-blogging service of their partner Shozu. Its thick-client approach seems to enable a more seamless blogging experience with faster interaction with content and with lots of uploading and downloading happening in the background. I need to get this on my phone and try it out. http://www.shozu.com/portal/ - http://www.buzznet.com/

Inmobia. The Danish company is focusing among other things on mobile content on emerging markets such as Africa. We have all heard about the buzzing Latin American market but making money with logos in Lagos… http://www.inmobia.com/

Cellfish Media. Lagardere Active changed its name to CellFish (I think this name would suite better a carrier, though… it sounds like ’selfish’…). Hmmm… a closer look at the press release reveals that the name is meant to highlight consumers’ thrive to express themselves. Never mind the name, this company is executing a very innovative brand strategy with solid investment behind and it is bearing fruit. The company is also organizing all international units to be managed from the New York office. This is the first time a non-US media company moves their headquarters into the US – the relative importance of the US market is certainly growing. http://www.cellfish.com/

BreakDesign. The South-African interactive design firm is focusing on mobile and particularly on FlashLite. They have created a very compelling UI customization partnership with a Swedish clothing brand and Nokia – I think we will see a lot more initiatives like this. Also, talking to people in the industry it sounds like FlashLite is starting to get traction within the carrier community even outside Japan. I am an advisor to a FlashLite-focused developer Omega Mobile (www.omegamobile.com), another good source to get you started with a FlashLite strategy. www.breakdesign.com – Emma Kaye, CEO – emma@breakdesign.com

GREAT GUYS & GALS OF THE INDUSTRY

Jaron Millner. This young gentleman has developed and is running most of the mobile interactive TV operations (a.k.a. participation TV) in Finland. His expertise would be really valuable in the US market – hopefully someone will hire him soon. Finland is roughly three years ahead of the United States in this area and another Finnish company IndigoTV (www.indigo.tv) is already launching a pioneering mobile-centric interactive show in New York City. Contact: jaron.millner@luukku.com

Troy Evans. It looks like Macromedia’s FlashLite guru Troy did not stay very long at Airmedia, now he is at Nokia as a Sr Manager, Branded Content. Nokia might be increasing their push into FlashLite content soon… Contact: troy.evans@nokia.com

Doug Britt. You may wonder how to get in touch with the much-hyped US MVNO Helio without possessing Korean language skills and cultural sensibilities… Well, the right person might be Doug Britt who started there as Sr. Business Development Director. Contact: dbritt@helio.com

Mario Tapia. No, we are not related but he seems to be a great guy. Mario recently started at Disney Mobile, heading up their content strategy. He comes to Disney from Playboy (who partnered with the unfortunate DIJJI) so he is poised to get a very different career experience this time around. I would say un-learning some things will be useful. Contact: mario.tapia@disney.com

EVENTS, BLOGS & SOURCES

MEM06. Just a heads up, this show in London on May 24-25 will probably be worth it, my friends who attended last year were very happy – this time around it should be even better. I might go there to see how Europe is doing. http://www.mem06.com/

Christoffer Andersson, a resident mobile guru and executive at Ericsson has launched together with his colleagues his second book on mobile applications development. Called “Mobile Media Applications – from Concept to Cash”, the book is available on Amazon and has a companion blog at http://www.mobilemediaapplications.com.

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/).

* * *

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.

Warmest regards,

Tapio Anttila

www.anttila.net

3D AS A WEB SERVICE

I usually don’t write about my own projects but as these are certainly interesting to the wider community…

First of all, I am in the midst of a wireless strategy project for Mental Images, a leader in the area of 3D visualization software. (And not only is it a cool company but it also enables me to use the coolest email address: tapio@mental.com!) The company has developed a product called RealityServer which enables realtime interactive rendering of photorealistic 3D visualizations. In an optimal setting of high bandwidth and low latency networking (starting from UMTS/HSDPA…) this enables a highly scalable way to compute “3D video” in realtime and make it available on handsets and any devices capable of running merely a browser.

I would encourage you to review our presentation which we will keep available at least another two weeks under this URL: http://presentation.realityserver.com/rs-ssp.pdf (USER ID: pre, PASSWORD: sentation)

This approach is opposed to but also complementary to the trend of adding more computing power into handsets and specialized hardware and software for 3D rendering. If you were able to make available an equivalent highly scalable web service of this kind, adoption rates would be a lot faster, given the immediate availability of service-capable handsets.

Now the first questions needs to be answered first, though: what are the most attractive usage scenarios for this type of a technology? What is the mass-market application that can create a market quickly? There are lots of potential applications in design, construction, navigation and other productivity-related uses but what would be the potential uses in entertainment? I would very much like to hear your opinion after reviewing the presentation.

The first thing that comes to my mind is launching parts of a future feature film (with lots of synthetic 3D material) in advance of the movie launch on the Internet as an interactive game or an interactive world, enabling sneak previews of the movie and gravitating towards introducing more promotional elements prior to the box-office launch. The service could be a revenue-generating entity and it would naturally accumulate a user community, forming a direct B2C relationship to also measure the responsiveness of the various marketing programs. In fact, this is quite a lot in line with what James Cameron has announced doing with his future Sci-Fi movie “Project 880″. http://www.businessweek.com/magazine/content/06_07/b3971073.htm

Looking forward to your insights.

OFFSHORE SERVICES IN MOBILE CONTENT DEVELOPMENT

Another of my projects evolves around a supporting a Danish mobile development services company Touchlink Mobile with operations in Ukraine (www.touchlink-mobile.com). I am building up their business development office in North America.

I firmly believe that we are entering a fast and sustainable growth phase in the area of mobile content. Fast-maturing technologies will ensure that new generations of services will be introduced in large volumes by the majority of companies in the media and entertainment industry. This will simply mean that there will be a shortage of development resources who will be able to fulfill all those needs with sufficient quality. That will push a lot of the development into leading offshore development countries such as India, China and Russia, creating price pressure and limiting the competitiveness of those services. We can already see India becoming a relatively expensive market and some Western companies start reducing their investment there. This dynamic creates opportunities for those countries who have yet to enter the market seriously – such as Ukraine, the former center of the Soviet Space Program and home to a highly educated workforce in the country of 48 million people.

So what are the issues that prevent companies outsourcing their development to a country where invoicing cost of a skilled man-hour is around $25-30? The often-cited reasons are 1) fear of IPR theft, 2) poor delivery on-time and 3) quality issues. How can those issues be tackled in the best possible manner to secure that companies can give to offshore development not only simple routine procedures such as porting and QA but even entire development projects of a major 3D mobile game title? I am in the process of finding the right answers and I have to say I am very excited about the opportunity. After all, the Ukrainian market is in the proximity of the advanced Western European markets and offers e.g. a nationwide CDMA/BREW network. I believe that with Western management overlay we will be able to guarantee good service and improve our clients’ competitiveness tremendously.

I am curious to hear your views on the subject and whether you are ready to consider mobile development outsourcing.

So that was my little project update – somewhat self-promotional, for sure, but I need to pay for the newsletter hosting fees;-). I promise I will revert to my usual provocative mode for the remainder of 2006…

SOME COOL COMPANIES

Floating World Media is launching a true cross-media program to teach US high- and middle school kids US history and civics. This is a major undertaking spanning over various media such as TV, DVD, games and – mobile. As I am not an expert in neither US history nor civics I thought some of the readers might be better suited to take the opportunity and help build the mobile part. Please contact Kris Nybakken at kristof@newtonsecond.com. http://www.newtonsecond.com/bios.php?name=kris

The guys from ThumbJive (http://thumbjive.com) are applying their knowhow in wireless product design and development to a new mobile advertising venture – mVertex. The company is seeking an investment partner to help bring the product to market this summer. The core intellectual property is an innovative patent-pending method for integrating interactive advertising into wireless entertainment. Through the mVertex system, content providers will have new revenue opportunities from advertisers, and mobile subscribers will have low cost access to high quality games and lifestyle products. daniel@thumbjive.com

HeadZup is creating comic strips for video phones and iPods and feeding carriers with that sought-after data traffic and revenue. The idea is rather original (and it is rather hard to figure out from the website what they actually do): end-users use a camera phone upside down and build a funny mask around their mouth and chin to record a funny blurb. You may want to try this rather in the privacy of your home but I have to say the idea is great! http://www.headzup.tv/makezup.php. Please contact John Shay for the company presentation: john@headzup.tv.

BlogStar will be launching at 3GSM in Barcelona a celebrity mobile blogging site where A-list celebrities have actually committed contributing to stories. In the words of the folks at BlogStar “For now, BlogStar is the only place Jessica Simpson and Nick Lachey can be found together.” The company is the brain child of Ted Field a well-known Hollywood mogul and founder of Interscope Records. http://www.blogstar.com/index.php

Dai-Biao. Duane Kennedy is launching a company to bring hip-hop culture and music to the Chinese market – including mobile content. http://www.dai-biao.com/ duane@dai-biao.com

GREAT GUYS & GALS OF THE INDUSTRY

Vesku Paananen, the inventor of ringtones works for Microsoft as their mobile evangelist. vesku@microsoft.com

Jim Beddows. Microsoft seems to be hiring also mobile media executives, Jim just started a gig there heading up MSN video business. jim.beddows@microsoft.com

Seth Skolnik, VP of Digital Media at Paramount left the company and is looking for new entrepreneurial opportunities. seth@skolnik.org.

Steve Hartford started as Director of Product Marketing at Visage Mobile. Visage seems to be doing well and Steve is one of the bright young stars in the industry. shartford@visagemobile.com

Andreas Lieber has recently started as a Senior Consultant at Detecon in the SF Bay Area. Andreas used to head up portal services at T-Mobile in Europe so he is two years ahead of everyone else in the Bay Area . andreas.lieber@detecon.com

EVENTS, BLOGS & SOURCES

Wireless Scandinavia resource and community site opened by John Strand from Strand Consultants – learn all about wireless companies in the Viking Territory! http://www.wirelessscandinavia.com/sw153.asp

Christoffer Andersson, a resident mobile guru and executive at Ericsson has launched together with his colleagues his second book on mobile applications development. Called “Mobile Media Applications – from Concept to Cash”, the book is available on Amazon and has a companion blog at http://www.mobilemediaapplications.com.

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/).

* * *

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.

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/).

* * *

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.

Michael Terpin’s CTIA partylist will be published at: http://newswire.blogs.com/partylist/ and it will be pretty much the authority on where the best networking will take place at the show.

Talking about the hurricane Katrina and the unfortunate tragedy in the Gulf Coast Region, hopefully the U.S. wireless carriers will take the opportunity to point out to the government entities how one could use mobile technology in the future to better handle a crisis like this.  Remember how FEMA scrambled to give out the evacuees debit cards and quickly pulled the plug on the plan as it was impossible to execute on?  I believe with mobile phones and services one would be able to create an infrastructure to quickly enable everyone with:

- identity management

- electronic wallets

- server-based funds allocation, integrated with bank accounts

- missing person search & identification using databases and camera phones

- ‘fleet management’ capabilities to instruct people with customized alerts

This was obviously not possible by the time the hurricane hit and it does present a lot of issues in the areas of deployment and usability.  However, I think in the future mobile phones would offer a compelling foundation for emergency recovery.

Warmest regards,

Tapio Anttila

www.anttila.net

 

 

SEOUL SEARCHING:  SELLING KOREAN MOBILE SUCCESS TO AMERICANS

Sky Dayton, the CEO of SK-EarthLink is known as a brave snowboarder and a successful entrepreneur through his founding of several companies, including one of America’s largest ISPs, EarthLink.  His new venture SK-EarthLink brings to him an entirely new type of a challenge: managing a joint venture with SK Telecom, Korea’s flagship telecom empire.  Headquartered in Los Angeles, the company has currently 80 employees and is hiring at a rapid pace.  As an MVNO on both Verizon and Sprint-Nextel networks they are planning to launch by the end of the year both an enterprise (SME) offering for EarthLink customers as well as a new youth brand.

From a Korean perspective the venture is extremely important:  as perhaps the most advanced wireless operator in the world SK Telecom has now the opportunity to capitalize on the experience gathered on their home market and to bring over to the U.S. other players from the Korean mobile ecosystem to make some money when the CDMA2000 EVDO technology still has an edge over the GSM community in broadband services.  The Koreans have tried to do it before: the rumors tell that SKT were close to acquire Sprint PCS in 2001 (when the latter had a market cap of $1.7bn…).  Finally Adventis, the strategic MVNO consulting entity to both companies put them in the same room and the rest is history.

However, as I have said before, the proof of the pudding is in the eating.  According to people familiar with the situation the venture is experiencing some execution issues.  The Koreans have moved in a staff of approximately 30 people and turned the innovative EarthLink company culture into a reportedly stale carrier organization.  In the ensuing political turmoil quite a few people seem to have left the company.  According to sources the Koreans are swearing “we will never let this venture fail” – which is certainly true.  The question that remains is whether thy will be able to build a successful media-focused MVNO from scratch without acquiring some parts to it later on from more experienced entities.  My guess is that they will end up acquiring AMP’D Mobile after the latter has executed a couple of rounds on the market and spent the raised $100m.  AMP’D has acquired a great understanding of what the youth market in the United States might want to buy.

DWANGO: SEATTLE BLOWS IT AGAIN

No, I don’t have anything against Seattle, I just could not help putting up the title after my earlier writings on Infospace…

During times when entrepreneurs come from Europe and build a company with success in under a year (Q-Mobile) there are home-grown US companies who venture into mobile content and manage to fail miserably.  Please meet Dwango (OTCBB:DWGN) from Seattle.  The company just recently missed their quarterly numbers and the stock took a dive from $1.25 to $0.36 in less than a month.  10% owned by Dwango Japan, Dwango North America acquired rights to some fairly significant content brands, among them Playboy and Napster.  Without any intellectual property on the platform side and overpaying for the licenses, the company ended up producing a $10 million trailing 12-month loss on revenues of $3.35 million.  Of the recently raised private placement of $15m the company has already managed to spoil $6m.

I think this is a beautiful case of the importance of right ‘industry NDA’ as discussed in earlier newsletters.  Dwango is a product of financial stock market engineering rather than a company having a sound vision of the future of the mobile content market. According to friends who have more time on their hands than the undersigned, the ousted CEO Rick Hennessey had a reputation of a ‘man who knew how to throw great parties’.  A successful mobile entertainment company CEO needs the capability to establish his company as a market maker, an educator and an innovator.  Dwango has focused on buying expensive rights and replaced innovation and leadership with plagiarism.

What will happen to Dwango in the future?  The company has cash for about one year and sources speculate they are getting a new round of private placement.  All I can say is that at $0.36 per share they are either gone in less than a year or they will be one of the best investments in 2006.  I believe the company can make a turnaround but then again… they are from Seattle so what do I know…

THE END OF THE FOOD CHAIN IS GETTING READY TO ACT

All those small mobile companies who lived on the mercy of getting deck placement from carriers are now facing both opportunities and challenges as the pace of the game accelerates.  Venture funding and IPOs are becoming increasingly viable and large media companies and portals are readying their plans to move into the mobile space with acquisitions.  The situations is a bit similar to when I got my first real motorcycle, a Kawasaki 650 after having been riding for two years a Honda 125.  You have suddenly a lot more horsepower available and you can either learn to master it or ‘die trying’.  There are plenty of examples of this on the market – what a great analogy;-).

Let’s take for example m-Qube.  With close to $50 million of raised funding and rather slow execution towards profitability the company is more like a Harley Davidson.  The poor weight-performance ratio does not really allow for fast and sporty riding but they compensate it with good marketing and PR (or ‘noise, tattoos and vibrations’).  The company recently raised another $10 million and are planning to take the burn rate even higher by adding close to 100 people to the current staff of 160.  The possible exits for the company include a merger with a European connectivity services company (such as, hmmm… Netsize who still does not have a U.S. presence) or an acquisition by a larger player like NewsCorp.  The ‘mobile bubble’ will probably help bail them out… wait a minute… was it NewsCorp who in circa 1996 offered $400m for PointCast who declined the offer… indeed… So the name of the game for m-Qube is to know how to ride the wave with its Harley.

What are those larger players then going to do?  Large portals such as Yahoo and AOL are still a question mark.  They are recovering from the over-investment in wireless during the dotcom boom and clearly ramping up their mobile product portfolio – however no big moves yet.  The real action from their perspective is in the online broadband market and wireless is still a second priority.  Interactive Corp. is another much-anticipated actor in this space and the consensus is that they are looking to acquire a large player with a strong brand when the market has matured significantly, maybe a year or so more.  Finally, of all the media companies and consumer brands it seems like NewsCorp is really ramping up their combined investment in online and wireless with the $3bn earmarked for related acquisitions.

So the lucrative exit for wireless startups is clearly starting to take shape and form.  Now we just have to make sure that we are able to build sustainable growth on the market with real revenues and profitability.

SOME COOL COMPANIES

Lagardere North-America.  Regarding my last month’s story on off-deck mobile content plays I clearly failed to include Lagardere in the top ten.  The company has clearly been one of the smartest players on the market by launching lifestyle brands Blingtones (urban hip-hop), Barrio Mobile (Hispanic) and Wicked Betty (tween girls).  The company is contracting and producing lots of original content and getting good results for the brands in sales both on carrier decks and off-deck. We are most probably talking about sales north of $10m for 2005.  The promotion for the brands is comprehensive, including print media, TV, radio, web and street marketing.  http://www.blingtones.com/ 

Telemedia Development. Telemedia is the leading operator billing aggregator in Latin America and the company is increasingly focusing on the Hispanic market on both American continents, targeting to serve media and consumer brands such as MTV whose Latin American operations they manage.  The company just acquired Media Movel, thus strengthening their presence in Brazil significantly.  www.telemedia.la  www.mediamovel.com.br

Mokool.  These guys in Singapore have developed a mobile content distribution platform for end-user content, based on multilevel marketing and virtual currency.  I am eager to see how/if they will pull this off.  http://partner.mokool.com/3pd_quicktour.php  http://partner.mokool.com/3pd_aboutus.php

Pod2Mob is a new company based in Los Angeles who have launched a streaming mobile solution for podcasts.  The company founder is Brad Zutaut who became previously known as the founder of the groundbreaking make-your-own-ringtone company Xingtone.  The software is targeted for mass-market phones and promises for interactive functionalities.  Could this be a little revolution in the making?  Particularly in the U.S. the masses are brought up to be media-savvy and ready to broadcast once you push a microphone under their nose.  Very interesting!  http://www.pod2mob.com/main

GREAT GUYS & GALS OF THE INDUSTRY

Bill Sanders started at Sony Pictures Digital Networks as VP of Mobile Programming and Jason Wells from Handango was hired as VP of Mobile.  It looks like Sony Pictures is getting their mobile leadership team in place and ready to act.  BSanders@sonypictures.com

Rich Miner started at Google as VP of Wireless after selling his short-lived start-up to the company.  Rich was earlier responsible for advanced product development at Orange and before that a Co-Founder and CTO of Wildfire.  This was clearly a smart move for Google.  miner@google.com

RECRUITING

Last month’s job announcement by a major studio was very productive for the company and it really seems the MEOW readership is a great source for job candidates.  I encourage you to contact me and submit a request for an announcement, it helps add value to this little community.

EVENTS, BLOGS & SOURCES

Digital Hollywood will take place in Santa Monica on September 19-21, it will be a great event for Hollywood networking – see you hopefully there!  http://www.digitalhollywood.com/

The next MoMeMo LA-chapter event will be staged on Sept 19 at 7pm at the LUXE Sunset Hotel.  Please contact the organizer Jon Bukosky for details.  jbukosky@m-qube.com.  See: http://www.momemo.org/

Jan Michael Hess is producing a solid set of study tours which could give you an opportunity to understand better the leading Asian mobile markets: Japan, Korea and China.  The next events are scheduled for October - check them out at http://www.mobileeconomy.de/met.

My favorite news sources:  I have only time for two these days:  www.moconews.net and www.digitalmediawire.com.  That will get you covered.  You should also 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.  

You all must have seen what happened to the Infospace stock a week ago - down 30 percent.  I wrote about the Infospace lack of wireless strategy in the past few newsletters and got surprised reactions from many people, including other industry publications like MocoNews (although it is my favorite news source;-).  Well, look what happened.  Infospace has apparently ignored to innovate and secure their position in the value chain.  Industry experts estimate that 75 percent of their premium content revenue relies on their relationship with Cingular – the one they are slowly losing out to Motricity.

Warmest regards,

Tapio Anttila

www.anttila.net

 

FINLAND – THE LAND OF THE ELUSIVE OPPORTUNITY

I spent three weeks in Finland which is often seen as the Mecca of mobile content. Finns themselves are being very realistic about their status and admit that mobile content market there lags some two years behind leading European markets where phone subsidies are in use.  The main trend in Finland seem to be a total commoditization of both phones and basic services – voice minutes are reportedly the cheapest in Western Europe.

Also the size of the Finnish market makes it difficult to introduce advanced offerings based on lifestyle segmentation:  the market is simply too small to allow for early differentiation like that.

Due to the presence of Nokia, the Finland continues to be a strong technology innovator with an amazingly poor track record of taking those innovations to the world market.  Why is it that the only two ring tone companies in the US who have not yet gained a decent valuation are of a Finnish origin? (For the record: ringtones were invented in Finland in 1997.) And why is it that on the contrary one of the greatest success stories in the US ringtone market (Q-Mobile) has its roots in Greece?  I  think the most important answer is that the Finns have not yet read Donald Trump’s book to learn to ‘think big’… 

What is even more important is the ability to ‘think big’ when it is time to do so.  To the credit of for example Q-Mobile they got the timing right.  Latecomers will find the market exhausted of high-growth vehicles and the investment risks multiplied due to market saturation.  Ask your favorite investment bank and they will not tell you this, though;-).

IS NOKIA DOING THE RIGHT THING?

Nokia published their quarterly results and took some beating on the stock market for reduced earnings.  The analysts were criticizing their focus on low-margin low end phones and on their losing market share to Motorola in the high end.  I am not trying  to defend the Finns (as you can see from the above;-)) but I think the market is seeing things through colored glasses.

I believe Nokia is for a change doing exactly the right thing:  securing the low end when they still can.  If they let the opportunity go they would feed emerging competition in low-cost labor markets, lose scale advantage and most importantly lose young customers who represent the greatest over-lifetime revenue potential.  Focus on design is important and in that respect Nokia has stumbled in the past two years in ways that should lead the chief designer Frank Nuovo to reconsider whether he actually after all is God.

My point is that the market for mobile multimedia is still very early and fighting for the high end market share at this point is not as crucial as securing the low end.  Even Series 60 as  the leading platform is just taking its first steps and putting all the ammunition on artificially building a market for that before the true consumer demand is there would not be the smartest thing to do.

The moment of truth for Nokia will come only roughly a year from now when multimedia phones and smart phones reach a price point where they will be able to build rapidly market share.  And at that point we all should have figured out what kind of revenue-generating content we can offer on those phones.  We should also always remember that not all technologies become successful when you just wait and let them mature – video conferencing is a case in point, the whole industry nearly died until video voyerism on the Internet finally brought it back… And mobile videoconferencing will fall on its face, sorry.

THE LATEST ON US PREMIUM SMS BILLING MARKET

It is fascinating to observe a revolution in the making:  the US carriers are indeed opening up the premium content market for the distribution of binary files (e.g. ringtones).  In the past month or so both Sprint PCS and Verizon have launched commercial services for off-deck binary content distribution with a few partners.

The latest numbers from i-bank/research company Rutberg & Co reveal that in the segment of the market covered by QPass’s billing settlement services (primarily Cingular and Nextel) the off-deck share of revenues grew from 2 percent to 23 percent during the first quarter of 2005 alone.  This is a very encouraging development.  When all the major carriers will have launched full-scale deployments of PSMS content billing by the end of 2005 we can certainly expect the overall mobile content market to grow significantly in 2006.  Off-deck players like Jamster are pouring in tens of millions of advertising dollars per quarter on the US market alone, thus raising market awareness and speeding large-scale adoption.

My top ten list of emerging off-deck players on the US market is the following, based on revenues, financial backing, strength of mother company and stage of launch.   I will certainly be making some mistakes here so I apologize in advance:

1. Jamster (Verisign)
2. Q-Mobile
3. BlueFrog Mobile
4. Dirty Hippo (Buongiorno-Vitaminic)
5. Katazo (Opera Telecom)
6. PlayPhone
7. 3GUpload
8. Flycell (Acotel)
9. ThumbPlay
10. Bonus Mobile

This list does not include companies focusing mainly on Latin America such as Telemedia Development, Wilaen or ClearSky.  I have also excluded companies who still mainly rely on carrier distribution such as Infospace, mForma, Airborne or Moderati. In the future we will certainly see studios, record labels and brands go direct to the consumer using premium SMS billing – an example under development is Universal Music Mobile or 123 Multimedia who are launching the BET Black Entertainment Television offering soon.

SOME COOL COMPANIES

CellCast Interactive.  Cellcast lauched their Flirt TV offering on Saturday on Echostar satellite TV as well as on the web.  It starts from a simple SMS TV chat and will evolve in the future to include MMS photos and video take by end users. CellCast touts the new venture as the ‘interactive version of Match.com’. However, looking at the launch email from Cellcast and the people that email was sent to it is clear that the offering might gear somewhat towards ‘adultish’ services. Included in the email are for example a new IP TV play Ripe TV (http://ripe.tv/) as well as Andrew Conru, the CEO of FriendFinder.com, home of the online dating industry’s most amazing cash cow AdultFriendFinder.com.  http://www.flirtliveusa.com/

SK-Earthlink. The Korean-American MVNO on Sprint has set up their headquarters in LA and they are building the platform as we speak. All signs indicate that the joint venture will be a showcase of best Korean mobile media innovations applied to the US market and it will be a conduit for several Korean platform providers to get a US foothold.

FotoChatter.  These guys in Santa Monica have developed a cool OTA p2p ‘mobile image network’.  It’s a very cool idea, kind of ‘photo group conferencing’.  It works through both WAP and J2ME. www.fotochatter.com

GearOn by Protohaus.  Another Santa Monica -based company Protohaus is bringing to the market a mobile UI design innovation which centers around community interaction. The various functionalities enable media sharing and various aspects of organizing ‘tribal activity’.  The company founder Eduardo Sciammarella was a senior award-winning UI designer at Sony for ten years.  If you are interested in knowing more about partnering with GearOn please contact Eduardo or myself.  http://www.protohaus.com/gearON/index.html

GREAT GUYS & GALS OF THE INDUSTRY

Chris Dorr started at Sony Connect as VP of Digital Video (including mobile).  Chris was previously VP Programming with Intertainer, an online VOD play which burned through $160m VC money.  Sony Connect is rumoured to the brain child of Sony’s new CEO Howard Stringer.  It is said to have 40+ open positions available…  Looks like Sony Connect might be the future bright spot in the Sony Empire… cdorr@earthlink.net.

Ivan Lopez started a while ago at Disney Internet Group (DIG) as Director of Business Development under Larry Shapiro. DIG has been given the mandate from the top management to be the focal point for mobile activity within the Disney Group. ivan.lopez@dig.com

Anina is a Paris-based supermodel who has become the ambassador of mobile within the fashion industry through her Nokia-sponsored mobile blogging initiative 360° Fashion which is using the Nokia LifeBlog platform.  This is a great example of a grass-roots development helping to bring a whole new industry into the mobile ecosystem.  You can contact Anina directly at www.anina.net or email me and I can evaluate and relay your partnership idea/proposal.  See also: http://www.cellphones.ca/1411

RECRUITING

Major Hollywood Studio with strong commitment to the mobile entertainment space is actively recruiting for the following positions:

• Manager of Business Development – Focused on distribution and evolving platforms in the mobile space for North America

• Manager of Content Licensing – Focused on securing 3rd party content from AAA brands

• Senior Manager of Account Management – Manage all distribution accounts and team of account managers

• Senior Account Manager – Manage major carrier relationship on day to day basis
  

EVENTS, BLOGS & SOURCES

Jan Michael Hess is producing a solid set of study tours which could give you an opportunity to understand better the leading Asian mobile markets: Japan, Korea and China.  The next events are scheduled for October - check them out at http://www.mobileeconomy.de/met.

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/).

* * *

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.  

The everyday reality is still pretty grim out there: a premium SMS guideline document of a leading SMS aggregator is thick like a bible and it lays out the absolute lack of any coherence in terms of how those services can be deployed to the customers of the various carriers.  Make no mistake, some of those concerns are very rational and necessary to protect the consumer.  Just the implementation of them is still today a content provider’s nightmare and a consultant’s paradise.

Discussions with upstart ring tone portals reveal a common trend: claimed round A financings are in the order of $5 million and first year revenue goals in the order of $20 million.  To what extent the public will take out their wallets and make these predictions a reality remains unknown but at least the guns are out and the fight has started.  What is the total ring tone market in 2005 going to be worth?  Says a co-founder of a leading upstart ring tone portal:  “Come on, that’s a macro question, you will have to talk to someone else – we will do $70 million in 2006, that’s all I can say.”  Did this happen before a few years ago?  And yet the funny thing is that it is dangerous to undermine the consumer devotion to spend money in something they feel passionate about.  Who would have thought the “Crazy Frog” ring tone  would become a chart-topping 20 million dollar winner?

At the end of the day the operators will probably note that the deregulation of the market was for the good of everyone in the industry.

Warmest regards,

Tapio Anttila

www.anttila.net

 

THE PROOF OF THE PUDDING IS IN THE DNA

 I have been following with interest the largest mobile content aggregators and publishers try to “grow big” in the space where their role going forward might be marginalized by either the carriers or the large media companies.

It is interesting to see Jamdat execute fairly well against their competition mForma.  Looking at the Verizon top ten game chart one can see many more Jamdat titles than mForma titles.  Why is Jamdat riding the wave with the stock trading at P/E 95 while mForma is going through a major reorg while trying to pull in enough revenue to justify their own IPO listing?  The simple answer is probably two-fold: 1) Jamdat was originally founded to be part of the BREW ecosystem and it is receiving the uncompromised support of the companies involved in that ecosystem and 2) the company simply was founded  by game company executives and mForma was founded by brilliant financiers.  In the fierce competition the real DNA of the company will eventually surface. 

Infospace is another example: a search/directory company at its core has expelled its wireless DNA (Moviso acquisition) and needs to rebuild it to suit a new strategy.  This is the classical problem with post-acquisition integration: how can you build sustainable value into the merged entity?

In the ring tone business in the USA we are now in a “deceptive growth phase”: new distribution and marketing channels will create a feeding frenzy with consumers (hopefully) responding to $100+ million TV advertising spending.   At the end of that frenzy we will see a mass-exodus of customers if the content offerings are not enhanced with quality and creativity.

Sustainable change comes most often “from underneath”: the Crazy Frog ring tone taking over the charts, Myspace.com becoming a catalyst of a major change in the music industry, blogs and podcasting emerging as potential business opportunities.  Companies with the right DNA can harness these opportunities but it takes some understanding on what lies at the core of the value provided to the end user. 

Some of these newcomers will give the establishment some tough competition: Bonus Mobile (www.bonusmobile.com) with heavy game industry DNA, BlueFrog (www.bluefrogmobile.com) with good sensitivity to music programming.  These are just examples and I am in no way affiliated with these companies.  mForma and Infospace are certainly good companies, too, but they will need to rediscover their DNA.

STUDIOS THROWING IN THE TOWEL?

I have been following the large movie studios here in Hollywood trying to make it in the wireless market.  We seem to be coming to a full circle here:  it all started by studios not yet understanding wireless and licensing the rights out for unreasonably high asking prices, thus causing the innovation to happen slower.  In the second phase they took the publishing in their own hands and tried to bring to market sellable product with varied success.  In some cases the quality of those products was not up to what has normally been expected from a movie studio – a case in point often mentioned in the industry is the Charlie’s Angels mobile game by Sony Pictures.  The studio bureaucracies are often notoriously slow, thus making it difficult for the company to execute and to bring product to the market.  Sony Pictures has reportedly not launched any ring tones for their movie catalog properties, largely due to complicated internal rights clearance issues.  Last week the company suddenly lost three senior mobile producers.  Do we have here a company with the right DNA or wrong focus on NDAs? (yes, this was a late-nite joke)

And then came the Crazy Frog ring tone that makes 14 million pounds sterling – go figure.  What will this result in?  How much is the Simpsons suddenly worth now in the eyes of Fox if the Crazy Frog sets a crazy precedent like that?  Would the studios be better off defaulting back to the licensing of their libraries now when the market is flooded with VC money?  As we have perhaps read in the press, Sony Pictures recently licensed a number of movie-based  mobile game rights to Verisign’s mobile games publishing unit Ojom.  The deal was rumored to be worth $1.5 million.  The circle is closing: now when will Sony Pictures license out a large part of their entire library to maximize the imminent value in the “inflated” market situation?  Why continue to own a part of the value chain where you’re not good at if someone is ready to pay an unreasonable amount of money?  On the acquiring side, would this be a better way for Infospace to spend their money than acquiring companies they have a hard time integrating (Elkware, Iomo, etc.)?  And how would you then launch mobile properties for old movies?  How to re-launch an old property and make the related mobile content timely and sellable?  One of the obvious answers would be to go talk to the home video division of the studio and integrate the mobile content launch into their product and marketing strategy.  This is often a viable option, particularly as the studio’s mobile arm and the home video unit might not work well together for political reasons… 

And who said middlemen are not needed?

CAN MOBILE CURE TIME-SHIFTING?

Using mobile phones to interact with TV programs is gaining ground even in the US.  We have all heard about the significant success of the American Idol SMS voting in what is called ‘participation TV’, integrating a mobile feedback channel into existing TV programming.

(The new emerging trend (already well-established in Europe) is mobile-centric TV programming: buying cable TV airtime to program entertainment which is mostly based on end-user generated content and premium SMS and MMS billing mechanisms to charge the end user.)

But back to participation TV, I have often wondered whether integrating the mobile feedback channel into TV advertising would actually offer the industry a way to battle the “Tivo-phenomenon”: viewers recording programs with the ability to skip ads.  If you simply start to create TV advertising that has interactive components in them with a possibility to win something, people would certainly be less likely to 1) skip the ads and 2) watch the program time-shifted.

Is there a problem doing this or is this an undiscovered opportunity?

ANOTHER BREW EVENT

Just a quick note on the BREW 2005 event which I visited two weeks ago in San Diego.  Hats off to Qualcomm for staying on the bleeding edge and responding swiftly to market needs.  The handset customization solution uiOne (http://brew.qualcomm.com/brew/in/about/uione.html) is yet another example of an innovation other leading players can kick themselves for not having brought to the market first.  Sometimes I wonder whether Qualcomm should spin off these innovations as new companies so they could better benefit the whole industry and not just the 15%-of-the-market CDMA ecosystem?

Because at the end of the day, no matter how well the BREW and other Qualcomm ecosystem programs are executed they will only serve a small part of the market.  The trade show may grow 100 percent per year and there may well have been a wealth of Indian and Chinese BREW developers attending the show but it all seemed to lack steam and real momentum.  And to their misfortune, the U.S. BREW ecosystem is reliant on the continued success of Verizon Wireless, the fierce defender of the Soviet-style closed walled garden ecosystem.  As a result of their inability to open up and share value with others Verizon has had to go on the defensive and rumors on the severed relations between Qualcomm and Verizon over the BREW service agreement abound.  When the cake is too small for the grown-up eaters it is understandable that sharing it becomes an issue.

SOME COOL COMPANIES

Great Media.  In the U.S. they talk about ladies in swim suits as adult entertainment.  Let’s take a look at Sweden, the home of folksy erotica.  GM Entertainment Inc. has created an entire ecosystem for the democratic selection of commercial imagery.  www.greatmedia.se is a service portal offering both Swedish men and women to the world as mobile entertainment.  www.girls.se and www.man.se are related online “casting agencies” where hotties are separated from the not-so-hotties. 

When will this come to the U.S.?  Why has www.vanitydate.com never really taken off?  Well, ThumbPlay is reportedly offering GME content here already.  www.thumbplay.com

mPowerPlayer.  The company has created a Java-based solution to offer trials of mobile apps on any website.  The app can then be ordered and provisioned, currently in partnership with Handango.  http://www.mpowerplayer.com/ http://content.mpowerplayer.com/

MySpace.  The LA-based social software site MySpace is making headlines with their incredible traction on the market place.  This is another example of grass-roots innovation: the site does not offer any sophisticated tools nor high-end experience and the server performance is very slow.  Moreover, the company is managed by InterMix Media which has been so far better known for innovative viral marketing techniques, also known as spyware…  See the Buzztone summary on the company success: http://www.buzztone.com/murmurz/setup.asp?id=27&sec=01&tmplt=2&w=800.  I wonder whether MySpace already has a mobile strategy in the works?

GREAT GUYS & GALS OF THE INDUSTRY

mForma had an eventful month: the company lost one of the most decorated industry executives, Rob Tercek who served as their CMO.  Along with him left Matt Edelman, SVP Publishing.  Both gentlemen were responsible for bringing expansive (and expensive) product innovation to the company which was apparently no longer needed when the IPO process needed more executives who can bring in the revenue.  It will be interesting to hear where Rob will end up – rumors tell he is in talks with Xingtone.

mForma also hired some new executives, including Gina Centoni as SVP Product Management.  Gina moves in from Macromedia who has by now lost most of its mobile leadership team.

The old management team of Moviso at Infospace is all but gone: the recent month’s casualties include Dean Newton (VP Entertainment), Shane Dewing (CTO) and Mark Levy (VP Licensing).  Mark has reportedly a cool new gig at Corbis.

Need a new job, too?  Please drop me a note, I might know of some options.

EVENTS, BLOGS & SOURCES

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/).

* * *

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.  

The new phenomenon of this ‘import market’ are venture-funded startups created as launch platforms for foreign entities with turn-key carrier relationships and a ’starter kit’ of content and customer base.  If you are one of those who labored through the grey and arduous task of understanding how to work with the US mobile operators – now it’s time to roll your own startup and retire!

Warmest regards,

Tapio Anttila

www.anttila.net

 

MACROMEDIA FLASH IN MOBILE – THE SLEEPING GIANT?

Macromedia put itself up on the market and got acquired by Adobe – little did we know!  Now it is easier to understand that the recent downsizing of their mobile division was more like window-dressing for the acquisition than a fit of rage by the infamous ‘Canadian economy version of Larry Ellison’ as their former CEO was recently affectionately referred to as.  With their head of developer services having left the company and nobody from the company’s mobile division admittedly attending the upcoming E3 one may ask whether one should calm down and wait before starting to develop for FlashLite. As great a company as Macromedia is – my advice to all of those asking for an introduction to the company is:  I am your friend, I don’t want to do this to you – please wait for another six months so that they will be able to give you some reasonable attention. 

And frankly, Macromedia does not have to hurry too much – the attractiveness of Flash as a technology is not going to disappear anytime soon and even though the company’s developer program on the mobile side is perhaps more power-point than anything else the competition such as Ikivo have a long way to have anything to put on the table to compare.

What comes to the future direction of the combined Adobe/Macromedia entity, industry insiders speculate that Adobe may actually push for the proprietary Flash platform at the expense of the OMA standard SVG-T they were earlier promoting – the new entity has probably more market momentum to bring a proprietary technology to the market.

Another thing the combined entity needs to correct is Macromedia’s historical lack of focus for the consumer market and for the entertainment industry vertical – the company is essentially an enterprise software player with a sweet spot in verticals such as government and health care where rich Internet applications and data visualization thrive and find optimal value.  This does not play well with developing an early success on the consumer-driven mobile data market.

THE MOROROLA ITUNES PHONE STORY – WHAT CAN WE LEARN?

Here is an anecdote on how I am told the Motorola iTunes phone got delayed – from pretty reliable sources.  Steve Jobs was in a meeting with Motorola executives (without the protective presence of Ed Zander, the CEO of Motorola).  He listens to the Verizon executives go off and suddenly says: “Guys, have you finished?  I am done, I’m outta here.” 

The interesting lesson from this whole Apple – Motorola partnership is that personal relationships matter – with Ed Zander in the lead Motorola has suddenly adopted the Silicon Valley culture (and relationships), both in good and bad.  It amazes me that Motorola still (or prematurely) attempts to launch products that go against the carriers’ fixation to ‘own’ the end user:  Ericsson learned to avoid the conflict sometime in 1999, Nokia cleaned up its act with the introduction of Preminet earlier this year.  Motorola goes off creating conflicts as if the company just entered the market.

SOME COOL COMPANIES

Rodger Desai is building a new company, Rave Wireless, based out of New York.  His focus is on the college market and he seems to have an intriguing and advanced understanding on something that could be called ’social work flows’ of a community or a consumer market demographic.  I am not really allowed to say more – please check with him if the college market is in your sweet spot.  Rodger’s mobile:  (917) 279-9380.

One of the Hollywood talent agencies – I am not yet allowed to say which one – is building a mobile publishing company that will offer its services to all its clients – an interesting new twist the other talent agengies might follow.  Yes, it is the one where Doug Dyer (formerly VP Wireless at THQ and Warner Brothers) found a new home.

Agile TV is developing a new way to navigate through mobile content on a server:  the solution is based on push-to-talk and speech-enabled server-side search with results returned with extremely low latency.  www.agile.tv

MediaLive, a French DRM solution provider, just got $4.2m round A funding with Nextel (!) leading the round.  The company is founded by a telecom industry and multimedia veteran Daniel Lecomte.  Check out Daniel’s LinkedIn profile for more info.  Nextel is apparently moving into new directions I was not aware of… and the Nextel CTO was quoted in the press release so this apparently was relative important announcement.  www.linkedin.com – search for Daniel Lecomte.

GREAT GUYS & GALS OF THE INDUSTRY

Ed Lang has started as VP Wireless at Sony Connect.  With a both entrepreneurial (Diggit) and large company (AOL) background he is perhaps perfectly suited to succeed in what I would call the most fragile new job in the industry (Sony is preparing for a major overhaul of its strategy, major cost-cuttings but perhaps a prioritization of Sony Connect, reportedly the ‘pet project’ of its new CEO).  Happy to make an intro.

Marc Brown was the longtime head of New Media for Playboy and he is currently looking for a job, mostly focusing on mobile opportunities.  Here’s a great opportunity for foreign entities establishing their presence in Los Angeles to tap into some solid experience and a large rolodex. In the American business environment moving from adult entertainment into mainstream corporate world is not fully unproblematic but that should not deter Asians and Europeans.  mabconsulting@earthlink.net

Miten Mehta, SVP of Content Acquisition at MobileMedia just launched a major ‘offensive’ on Linkedin and beat me in the number of connections – from near-zero to 1,200+ in a few days.  A well-connected guy indeed.  Please check out his profile and JOIN LinkedIn, it is a must tool for sales & bizdev and I am not paid to say this. www.mobilemedia.com  www.linkedin.com

Reno Marioni cut a deal with Digital Media Wire to take the news service into mobile publishing, podcasting etc. – very cool!  http://www.tangentmobile.com/index.php www.digitalmediawire.com

READERS’ WISH LIST

One of my readers has plenty of carrier distribution as a large mobile content company and seeks to expand into mobile game publishing by acquiring a number of small game development companies, typically in the pre-funding stage.  Please forward to me any ideas you might have.

Brian Ring at ComChoice is looking for mobile video developers for his new initiative. brianr@comchoice.com

Juha Christensen’s new company Sonopia, focusing on mobile branded communities is looking to recruit product management resources at various levels, please contact Juha at juha@sonopia.com

EVENTS, BLOGS & SOURCES

June 6 (New York): MoMeMo NYC meeting at SoHo House.  Senior-level monthly mobile networking event in New York.  For details, send email to Ashley Heather at info@momemo.org. 

June 1-2 (Miami):  Mobile Messaging Americas by IBC.  As always warmly recommended – see you there!

Talking about good blogs:  see the http://www.imodestrategy.com/ of Walter Adamson.  You don’t need to go further to learn everything about i-Mode.

My favorite news sources:  I have only time for two these days:  www.moconews.net and www.digitalmediawire.com.  That will get you covered.

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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.  

And then there is the magic word: MVNO.  It is one of those words people use without fully understanding what it means.  I bet P. Diddy did not fully understand what it means when he was calling himself an MVNO at the CTIA keynote.  However, he had a point:  he is an opinion leader that can move markets and direct the flow of value in the ecosystem.  Good for him.

Warmest regards,

Tapio Anttila

www.anttila.net

 

MOBILE MUSIC: TOWARDS LIFESTYLE PROGRAMMING

When trying to condense the essential of the past month in mobile music into one paragraph one has to lift up the revelation I had at the Warner Music party at CTIA (where I also lost my voice for 3 weeks). The record labels took mobile music seriously sometime in the fall of 2003 and the results start to show:  Warner is now offering a complete set of mobile music products for its recording artists to create and monetize – as part of the standard package.  So far we are talking about the basics: ring tones, graphics and downloads – I believe soon we will be talking about channels of dynamic entertainment programming. It is the ‘fifth element’ of musical entertainment, something pioneers like Snoop Dogg are bringing to the market today with his diversifications into TV shows or adult videos.  Or Bono extending his brand into politics.  Ring tones are just a tip of the iceberg, just like the hit song itself is.

In late 2001 I discovered a little company headquartered in Manhattan Beach, CA, called UrbanWorld Wireless.  Mike Johns was programming hiphop-related sponsored news to users of two-way pagers.  He was feelin’ it – the stuff I am trying to describe above.  He called himself ‘CNN for the hip-hop crowd’.  Then he moved on to original DJ ring tones, selling them through distributors like Infospace Mobile.  Now he has over 400,000 subscribers to his news service and close to a million dollars in annual revenues.  That’s enough for a company of two people.  Plus he will probably soon sell the company to the Koreans or to the Japanese for $10 million because hip-hop has some real following internationally and thus growth potential.  Good for him.

PREMIUM SMS  – OPEN OR CLOSED?

I remember talking to Paul Palmieri at Verizon sometime in 2002 about the European premium SMS market and how it should be replicated in the US.  His response was: “No matter how hard I try I don’t understand why people would pay more for a text message.”  We have come a long way since then.  By the end of Q2 this year all major US operators will start selling content over premium billing infrastructure.  Short codes can be rented for this purpose by anyone but the use of those codes has to be approved by each operator separately.

However, there will be no adult content sold through this billing mechanism – that business is all left for Bango.net to take over…  Adult companies are moving in to court the carriers, though:  a leading adult publisher New Frontier Media together with its mobile publisher Brickhouse Mobile organized a party at CTIA (at a gentlemen’s club) reserved strictly for mobile carriers (despite its name, MEOW! would not qualify to attend…).  A Brickhouse Mobile representative told me that this is the way the adult industry got past their distribution hurdles in the cable industry: with money and patience – and they intend to do it again in mobile.

I believe in the end open distribution models will win. In a way mobile operators are like Michael Gorbachev in the Soviet Union in 1988:  they are already preparing to promote perestroika in an effort to control the explosive market forces.  Eventually even that will fail because the consumers will vote with their wallets.  With some luck we might even see the iTunes phone one day,  ‘Carrier willing’.

SOME COOL COMPANIES

ThirdScreen Media.  This company is to mobile what DoubleClick is on the web.  Established only a year ago, their timing to address the mobile advertising B2B opportunity should be good.  www.thirdscreenmedia.com

M:Metrics. Seamus McAteer is launching a well-funded attack to create the ‘Nielsen’s-like’ research and rating service for the mobile industry.  www.mmetrics.com

m-Qube. Jon Bukosky took up the role as GM of Los Angeles and VP of Worldwide Content.  This mobile marketing company is hot in Hollywood, partly fueled by the media industry growing to understand how to integrate promotional components into mobile programming.  http://www.m-qube.com/

PEOPLE NEWS

The Macromedia content team was hard currency on the market after completing its mission:  on top of the undersigned enjoying the limelight, the other two individuals have cool gigs:  George Linardos is the first ever Nokia Hollywood employee (Sr. Manager, Branded Content) and Brad Auerbach is the Senior Legal Counsel for Qualcomm’s MediaFLO division.  Contact: george.linardos@nokia.com; brad.auerbach@qualcomm.com

Infospace Mobile is rumored to be bleeding.  Anthony Stonefield left last week to found a bunch of new companies but he’s not alone:  a large part of the Moviso team in LA is calling it quits. Does the HQ in Seattle have a mobile strategy?

EVENTS, BLOGS & SOURCES

May 9 (New York): MoMeMo NYC meeting at SoHo House.  Senior-level monthly mobile networking event in New York.  For details, send email to Ashley Heather at info@momemo.org. 

June 1-2 (Miami):  Mobile Messaging Americas by IBC.  As always warmly recommended – see you there!

Talking about good blogs:  see the http://www.imodestrategy.com/ of Walter Adamson.  You don’t need to go further to learn everything about i-Mode.

My favorite news sources:  I have only time for two these days:  www.moconews.net and www.digitalmediawire.com.  That will get you covered.

* * *

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.  

Another encouraging sign is the opening of of the floodgates in the wireless recruitment sector.  In the LA area alone, I know of tens of mid-to-high-level positions being filled as we speak. Demand will soon exceed the supply of candidates – a development fueled by VCs pouring money into new startups nicely categorized into the next hype areas.  

This leads me to the last point and a word of warning on the growing wireless bubble:  a good sign of it is that Silicon Valley VCs are pumping money into wireless CONSUMER plays, something they religiously refused to do still two years ago.  The time-to-IPO is contracting again and we see lots of financial M&A engineering and funding of ‘also-ran’ startups. You may want to take your grandmother aside and tell her about the dangers of the stock market in the next two years – otherwise she’ll be thrown off her rocker again …

Next week’s CTIA in New Orleans will be exciting – hope to see you all there!

Warmest regards,

Tapio Anttila

www.anttila.net

JAPAN AND KOREA – THE TRUE LEADERS?

Japan – My first impression when arriving in Japan was ‘where are all the small phones?’…  The Japanese market has suddenly adopted the idea of dragging along clunky smartphones.  That is probably because they have seen the need for added functionality such as mobile payments.  The smart card trials of Sony and DoCoMo have matured to a point where the rest of the world needs to take notes.  We were pitching mobile phone as a personal trusted device back at Ericsson in 1998 or so – now it is suddenly starting to happen on the marketplace with Japan in the lead.  Moreover, these innovations around mobile payments are largely exportable to the rest of the world, unlike most of the Japanese content or their social culture.  You may want to check out the latest market insights around this at the sources below.

http://www.eurotechnology.com/store/

http://www.wirelesswatchjapan.com/

Benjamin Joffe (http://www.akebonobashi.net/blog/)

Korea – If Japan is all about mobile payments, Korea is all about mobile TV.  And we talk about the real mobile TV, DMB – direct satellite broadcasting to the handset – not streaming cellular mobile TV.  They will have 50 channels broadcasting by May this year – all free to the end user during the launch phase.  The price of those very cool devices is high, though – in the range of $1,000.  Is the hype about Korean mobile use substantiated?  When you listen to the market numbers and to the services launched it appears to be so.  But when you spend time in the streets and trendy spots in Seoul you will have to concede that the use is still fairly conventional: SMS (high school kids average 53 SMSs per day), games, WAP.  I did not yet see much of those high-end handsets in use by normal people, even in affluent and trendy spots.  People use their phones ALL THE TIME for data in particular but hey, this is not America so what’s the big deal…

I spoke extensively with Simon Bureau, a consultant and Korean industry expert who has recently written (together with Benjamin Joffe) a great report on mobile music services in Japan and Korea.  He gave me a lot of market insights and I warmly recommend you take a look at the fresh new report:  www.vectis-intl.com.  Download the very informative presentation slides (for your enjoyment only in French): http://www.akebonobashi.net/blog/

My main takeaways from the Korean experience were the following:

1. There are no mobile enterprise applications, solutions or phones to speak of – it is all about the consumer market.
2. SK Telecom is the big money-maker, not the content providers
3. SK Telecom is becoming a mobile publisher through its Mobile Licensing Bank initiative
4. SMS is only 20% of data revenues, i.e. mobile content is a significant revenue generator
5. Original content plays a big role (e.g. ringback tones are often based on latest soap opera content).  This focus on dynamic content is very promising in my opinion.
6. Online world ‘Cyworld’ has had enormous success (both broadband and mobile): 10 million citizens have joined this online community (25% of the population).  This is huge!
7. Broadband and WiFi have penetrated very well and plans are in place for WiMAX – will they ever even need mobile professional solutions from Cellular providers?
8. The focus on privacy and security seems to be limited  – open WiFi access points are the majority and experts were pointing out how little privacy protection for example the online community Cyworld has.

HOLLYWOOD IS HIRING

Hollywood studios and other entertainment companies based in Southern California are ramping up their hiring spree.  The following ‘laundry list’ will show you that LA is becoming a real hot spot for mobile content:

1. Universal Music (Rio Caraeff) is building a mobile music publishing unit for the North American market: hiring need probably 10-15 people.
2. Warner Brothers has hired a number of new people into their mobile unit, the VP Wireless replacement is still missing.
3. Sony Pictures is still looking for a VP Wireless.
4. Disney is building their Disney-branded MVNO out of LA (and another ESPN-branded out of NYC): plenty of hiring taking place right now.
5. Infospace is looking for someone to head up their music bizdev.
6. Mobliss is looking for two business development directors in LA.
7. Nokia just hired their first LA-based bizdev person (George Linardos).  It was about time.
8. The new SK-Earthlink joint venture will start hiring soon:  my assumption is that the new unit will be based out of LA.  According to my friends in Seoul, roughly 20 Korean will be packing their bags soon to move to the US.  This will be a sizable operation.

And there are countless more – please let me know which ones I forgot and I will list them here next month.  Where will all these people come from?  I bet we will see a rush of mobile-heads moving into our city soon.  A word of warning: the weather here has a good reputation but it has been raining lately;-).

EVENTS CALENDAR

Mobile Messaging Americas by IBC – 1&2 June 2005 in Miami.  As always warmly recommended – see you there!

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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.  

On the professional front I completed successfully my project to build up a mobile content team for Macromedia.  Going forward the company will be focusing its resources on developing the next version of FlashLite technology as well as supporting the new handset licensees which start signing up at an increasing pace (Samsung was the latest announcement on January 19).  To understand a Silicon Valley company going mobile is not always easy and I am happy to guide the readers to the right source over at MACR – just drop me a note.

MEOW newsletter is just my way to keep in touch with industry insiders.  There is a lot I will have to leave out and I encourage all of my readers to drop me a note and I will see how I can help you.  I look forward to working with my readers in a more personal relationship over the course of 2005 – your feedback is welcome!

Best regards,

Tapio Anttila

www.anttila.net

TREND NEWS – MY 2005 PREDICTIONS

Lots of development and excitement – but still boring experiences.  This year will fail to bring to market anything that would cause me to run to the store and get a new phone.  A lot of exciting things are in the pipeline and industry people will be busy but the new stuff that is selling will still be *yawn* boring early adopter stuff:  ‘amazing video’ at 21 kbps and other over-promises from the industry players trying to beat the VCs to give them more money.  Having said that, 2007 will be a whole different story.

The last year of ‘peace’ between operators and the content industry.  Mobile operators have been allowed to build their walled gardens in the comfortable expectation that they would become the future media giants.  This has grown to significant dimensions on the US market where Verizon in particular has tried to legitimize this role.  Media companies are seeing the writing on the wall:  profitable alternative distribution channels for mobile content in Asia and Europe are sneaking into the US market.  Premium SMS will finally take off this year in the US.  There is only so much operators can do to stifle growth and competition.  At some point the floodgates will open and the US market will be like any other market.  See the rather provocative article by John Strand on the matter: http://www.160characters.org/news.php?action=view&nid=1422

US market will lag even more in December 2005.  Price competition in voice and SMS is driving operators in competitive GSM markets to innovate on data services – we are approaching the ultimate moment of truth for the operators in those markets: the new revenue has to come from somewhere.  On the oligopolistic US market the years 2005 and 2006 will be spent in sorting out the completion of the carrier mega-mergers.  Customers are locked into their 2-year contracts and they lack incentives to visit an operator store to find out about new services.  It is a miracle that the US market has gotten where it is today despite the lack of innovation in distribution!

Good news - in December 2005 we’ll all be very busy.  The mobile entertainment industry is clearly shifting in a larger gear: consolidations, IPO activity, start-ups funded,…  The Japanese are cherry-picking cheap US companies as if it were the Rockefeller Plaza times here again (Vindigo, Mobliss).  And perhaps the most interesting development of all is the surge is MVNO-related joint venturing:  The recent announcement of SK Telecom and Earthlink to form a venture to offer multimedia services through an MVNO (supposedly over Sprint PCS EVDO) is an interesting one as it involves Sky Dayton finally coming out of Boingo where he was cooking some rather utopian WiFi services which suddenly make much more sense when integrated in a larger context of multiple network infrastructures.  So this all will create jobs for everyone – not the least for headhunters. 

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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.