Wireless content development faces many challenges, wireless conference told

Wireless data services and content are expected to help wireless operators improve sagging average revenue per user (ARPU) numbers, but before that becomes a reality there are several relationship issues that need to be resolved. Offering wireless content, therefore, faces an uphill battle as providers fight against mobile wireless carriers on several fronts, say wireless experts. Emanuel Bertolin, VP marketing and sales of Calgary-based Wmode Inc., in a session at the Wireless Connections 2003 conference at the end of last month titled Wireless Content Evolution, touched on five key issues that he believes have led to the creation of tension between the mobile wireless carriers and the content providers. David Neale, VP new product development at Rogers Wireless Inc., then spoke about the challenges from a carrier’s perspective. On the customer ownership side, operators make significant investments to acquire customers. They offer deeply discounted or free handsets, combined with large bundles of minutes and other services. That’s a huge investment for the carriers, Bertolin said. "They want to get everything right and not do anything with their data services that could jeopardize losing that customer," Bertolin said. "At the same time on the content provider side, a lot of sites have done a lot of work in terms of garnering loyalty to their brand. So you can get into situations where you have a desire to own that customer relationship from a personalization perspective." However, Bertolin conceded that much of this problem is resolved through customer care activities. "There is progress being made in this space. I feel at the end of the day there’s a number of issues containing customer ownership, but the customer care issue is clearly one of the big issues that resolves who owns that customer. … In most cases, I think it is the carrier." Marketing and branding a particular service or content is also a challenge content providers and carriers are facing. Bertolin noted there is evidence to suggest that if marketing and branding are done properly, content can be successful in the mobile space. It’s hard to pick the next fad, though, Bertolin added. "I don’t think the carriers are necessarily the best at picking them, so there’s a real balance and tension there in terms of the power of brand, the power of white labeling under a carrier brand and who should be doing that." This is one of the big problems on the user experience front, Bertolin said. The struggle in this case is the balance between creativity from the content providers and the carriers’ desire to control the user experience. "Many of the carriers are very protective of how the user experience on the handset is manifested," Bertolin said. "Many content providers feel like the style guides provided by the carriers are very restrictive. They want menu and navigation structures that are different from the carriers’ style guides. At the end of the day, consistent user experience is very important especially in the early market. Another major obstacle to a fruitful relationship between operators and content providers surrounds pricing, billing and revenue sharing. The struggle centres on how the price for the content is divvied up. "Who’s the merchant of record if you purchase a ringtone? Is it Sony Music who may have provided the music or is it the carrier?" Bertolin asked. "There’s a lot of games that can generate significant data volumes and a lot of the gaming companies (believe) they should be part of it. On the other side of it, I think many carriers are reluctant to share revenue for transport, but are much more open to sharing revenue generated by premium services, where they act as a potential billing agent for the service." There are still a lot of issues to be resolved in terms of pricing and revenue sharing, but Bertolin conceded that business models aren’t yet clear. A final issue of contention between the two groups cited at the conference session is the technical adversity they both face. There is still uncertainty as to which standard will emerge as the dominant one. WAP continues to be inconsistent, but there is hope that xHTML can solve some of the technical issues. Three primary elements in the wireless content space One of the key challenges in the wireless content arena is that content is a private and personal aspect for each individual. Neale said that at one time carriers thought they knew what the consumer wanted, but have now realized that "selecting content for others is a real challenge for the operators." While content is personal, Neale highlighted that consumers are willing to pay for premium content and services and "we have found that high-profile branded content does have a value." He cited the example of users using a Weather Network icon as opposed to a non-descript weather icon. Even more surprising is that users are interested in content at a higher price. The relevance and usefulness of content is another key element in the wireless content space. Only information that is contextually relevant to that particular user is truly useful, he said. "(Content) that is contextually relevant actually sells itself," he added. Neale noted, however, the secret of success for wireless data and content lies in the presentation, adding that elements such as format, colour screens, and ease of use are key. Since the introduction of handsets with colour screens and the availability of polyphonic ringtones, the lion’s share of traffic in Europe and Asia has been directed at downloading screen savers and the newer ringtones. Neale noted that Rogers has seen ringtone downloads triple since polyphonic ringtones were made available to its subscribers. To put an exclamation point on the potential for wireless content, Neale highlighted a surprising fact. Since the company began selling Motorola’s T720 handset, approximately 70% of those who have purchased the device have downloaded the Tony Hawk skateboarding game.

Wireless content development faces many challenges, wireless conference told

News | June 11, 2003

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