Mobile social networking and user-created content increasingly important

Mobile wireless operators around the world should pay closer attention to the growing significance of mobile social networking and user-created content, and leverage their presence with the youth market to generate additional revenue. This is one of the messages from UK market research firm visiongain in its recent report Mobile Communities and User Generated Content 2006-2011: Monetising mobile social networking. The research firm writes in its report that declining voice revenue, combined with the need to recoup third-generation network infrastructure costs, has forced operators to look at ways to increase wireless data usage. With conventional 3G services such as multimedia messaging services (MMS) failing to gain the traction that was expected, mobile social networking and user-created content offer carriers the opportunity to make up some of that revenue shortfall. It’s important to note that wireless carriers in Canada have not yet found themselves in this situation. The country’s wireless penetration still has loads of room to grow, as does the minutes-of-use rate. In addition, the three national operators don’t engage in widespread aggressive pricing competition – although they do so in some cases – yet they have all found it relatively easy to add more subscribers and achieve growing profit margins at the same time. Leveraging the online world to make it mobileMySpace is already the fourth most popular English-language website with approximately 100 million subscribers – it trails only Yahoo, MSN and Google – and it only makes sense to plug wireless subscribers into this world. The handset also lends itself well to interacting with social networks. "Operators are also keen on the potential stickiness factor of social communities. Subscribers who are accessing a community via a mobile operator are less likely to leave that operator if they cannot take the community with them," reads the report. "In addition, the creation of content and subsequent communities formed around such content are likely to push revenue for operators. Operators are hoping that interactivity amongst users will induce subscribers to use services more." Challenges exist, however, for mobile operators to capitalize on the trend towards social networking and user-created content. Visiongain suggests one of the more obvious issues relates to user experience: browsing the Internet on the handset is cumbersome compared to surfing the Web with a computer. Device form factor also limits viewing and the keypad makes it difficult to post blogs or to access social network sites. Despite the challenges, two mobile operators are demonstrating that social networking and user-created content can be successful. SK Telecom, a carrier in South Korea, owns social networking site Cyworld – the South Korean equivalent of MySpace – and about 10% of the operator’s subscriber base uses this site. As well, UK operator 3UK has experienced success with its SeeMeTV offering that allows users to upload user-generated videos, which can be downloaded by other users. Visiongain didn’t provide a specific figure for the number of downloads per month, but said it’s in the millions. The report also notes that companies such as Motricity and AirG – two mobile social networking and user-created content companies – are experiencing success. Without providing specific numbers, visiongain notes that millions of Sprint Nextel subscribers use Motricity’s mobile community focused on mobile gaming and that Vancouver-based AirG reaches millions of wireless subscribers. The handset makers have also seen the growth opportunity coming from mobile social networking and user-created content. The report notes that manufacturers such as Nokia and Sony Ericsson are creating handsets that "encourage mobile communities and user-generated content." The Nokia N73 comes equipped with a camera and provides support for uploading photos to Flickr, an Internet-based photo-sharing site. The research firm suggests that mobile operators need to focus on generating revenue through communities and user-created content and not on increasing the number of subscribers using services, and this can be done in a number of ways. "These include targeted advertising and the provision of relevant content to community users. Relevant content can include operators monitoring community sites to provide ringtones, video clips, or wallpapers for a music artist being favourably discussed," reads the report. While social networking is still in its nascent stage in Canada, carriers and content providers here are exploring revenue-generating possibilities from this phenomenon and user-created content. Simi Grosman, senior VP of business development at online marketplace company Oöober, said during a conference in Montreal earlier this summer that carriers are showing interest in this type of content (RoW, June 15/06). "What we’re finding in talking to some of the carriers is that they would love to be able to provide content that is more relevant for their local communities," Grosman said during his presentation at IP Telecom Expo in Montreal on May 31, noting the example of Orange France offering subscribers content that is different than that offered to Orange customers in the United Kingdom. "For , it not only represents another revenue stream, it represents a way of creating loyalty," he added. "We all know probably the thing that keeps all operators up at night is the idea of holding on to their subscribers and then being able to generate more revenue from those subscribers. So anything we can do, or anywhere they can get help in building that loyalty to the community is going to resonate very positively."

Mobile social networking and user-created content increasingly important

News | September 8, 2006

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