However you skin the TV-on-your-mobile cat, we’ve mostly just got conjecture, speculation and theory to go on. So I was interested to read on BlackBeltJones that Nokia have given him a new piece of kit to play with for a month:
the s90-powered 7700 that won’t be getting a commercial release, but Nokia uses as an experimental platform for new services for mobile DVB-H digital TV broadcast…
His initial reaction has made him question his theoretical skepticism, despite being only able to watch Finnish TV. Apparently, they broadcast a lot in English 
He’s promised to keep us updated via his blog. Don’t forget now!
Speaking of mobile TV, New Media Zero carried this article by Doug Goodwin, who is business development director of Tao Group.
Anyway, Doug suggests that if you want to understand mobile content, you just have to look to the history of TV and all will be clear.
the two industries have similar characteristics: network operators, like broadcasters, are ‘pipelines’ for customers to experience content services. Mobile handsets, like TV sets, are the experience enabler. TV could prove to be a great role model for mobile as it becomes a fully grown entertainment experience.
He goes on in the same vein, pointing out some superficial similarities (programme makers can be sure that their work will be seen in the same way on different makes of TV set etc).
For me, this is like saying 100 years ago that the future direction of the car industry can be understood by looking at the horse and cart. After all, both normally have 4 wheels (except when they don’t) and need to be steered. Both can carry people and things around. And don’t forget both have genuine leather trimmings.
Yes, that may be so, but they’re fundamentally very different. As much as anything you just need to think how you might view mobile TV (short, sharp bursts) as opposed to the “real” immersive TV experience.
Doug’s main point (I think) is that when it comes to advertising, the
lesson from TV here is that consumers will accept advertising provided it comes hand-in-hand with desirable and targeted content.
Um…maybe. They also might accept it if it entertains them or genuinely adds value to their lives, for instance.
However, I don’t think that comparing TV with mobile content is especially helpful, unless the intention is to reassure people who might be scared of change.
Mobile is a totally new medium and needs to be treated as such. It’s a very dangerous game just to look at the similarities to what’s gone on before. After all, the past isn’t always a reliable guide to the future.
Russell
PS Image is from the cult film classic Black Belt Jones, not the cult blog classic
I’ve been a great admirer of Tomi Ahonen for some time. Both as an author and consultant, I think he’s one of the few who really understands the mobile space and he’s a fun guy too. You’ll find a lot of his themes and opinions uncannily similar to my own writing in this blog - which means that we must be right
I managed to persuade him to give us an exclusive interview to coincide with his new book 3G Marketing. I haven’t read it yet, but my copy’s on order - get yours here. It’ll certainly be worth reading.
Read this and learn. I did.
Russell: If you had to summarise the key message in your new book, 3G Marketing, what would it be?
To succeed in the marketplace mobile operators now need to focus, based on customer understanding and segmentation. The time for everything for everyone at the same price is over.
Russell: Who should read it?
Anyone involved in the market success of mobile telecoms. First of all the marketing, sales, service management and strategy people at mobile operators. But also the calling centre, store staff, partnership management, and account management personnel at mobile operators; all operator-facing people with the handset manufacturers and telecoms infrastructure equipment vendors; any content and application developers who intend to launch on the mobile phone, plus investors, bankers, consultancies, educators, etc.
Russell adds: err….sounds like just about everyone
Russell: Video calling still seems to be regarded by some operators as a “killer app” for 3G. Any thoughts?
Actually video calls used to be thought of as a killer app for 3G, by some of the players three or four years ago. Now all operators know video calls will not be significant traffic nor revenues in major segments during this decade at least.
There is an important distinction here that I want to make. Video calls are a new feature not available on 2G. It is a differentiating service. But it is not a mass market service, and it alone in most cases will not convince users to upgrade, hence (for most market segments) it will not be a killer application.
As an analogy consider digital TV. Voting and shopping are new features on digital TV that was not possible on previous analogue TV. Yet all digital TV viewers will still spend the majority of their time watching soap operas, sitcoms, news, music videos, game shows, reality shows, talk shows, etc. All of these - the killer apps per segment - were available and still are available on analogue TV. The majority of the traffic and revenue for 3G will be voice and messaging just like on our current GPRS and WAP phones today.
Oh, and about killer apps. I write about them all the time (my first book, Services for UMTS, was subtitled “Creating Killer Applications in 3G”) and the one big point to make is that there will not be a single dominant killer app for 3G, it will be a series of services.
For example the extra exclusive cameras in the Big Brother house in Sweden and Italy, were 3G killer applications, but only for die-hard Big Brother viewers. I am not a fan of the show and would never consider buying a 3G phone just to have this access.
In Korea the traffic camera and statistic service is a killer app, but only for those who have to drive in the congested Seoul traffic jams every morning and evening. If you commute by bus or train, you don’t care for the service.
In Austria the deaf-person 3G service with sign-language support is the first time that deaf people can join the mobile phone connected generation - deaf people had no need whatsoever for a GSM voice based phone - but again this service bundle is irrelevant to those who do not have near loved ones who are deaf, and who don’t know sign language.
Killer apps in 3G will be segment-specific. There will not be a universal 3G killer app. And video calls will not be a significant killer app, nor will video calls deliver any significant revenues at least during this decade.
Oh, but also consider this. A YOUNG user today will be comfortable with video calls just as we older people are uncomfortable. From 2006 on, every youngster’s newest phone will be a 3G phone with video call as standard feature (they are not on all 3G phones today, but will be by 2006).
Imagine that generation growing up, video calls will be natural to them. Then fast-forward 20 years to 2024 and the recent launch of 5G (we will get 4G in 2012). By then we will have kids asking their parents, “is it true dad, that there once were phones that you could not see the other person?” How could you know WHO it was on the other end? You mean you had to listen to the voice and recognise them? How strange” - just like today a young child when seeing a phone booth might ask the father, “dad, why is that phone tied to the telephone booth? Is it so that people don’t steal the phone”
So in the VERY long future, video calls are inevitable, but not during this decade. Maybe in 15 years.
Russell: LBS doesn’t seem to have made any traction anywhere that I’m aware of. Why do you think that is? Do you see it ever happening?
LBS (Location Based Services) is a typical engineering-led technology in search of a need. The engineers involved with LBS keep refining the accuracy (there are technologies now that will pinpoint you to the exact room in a skyscraper, including the floor you are on) but the commercial success is lacking.
The main problems are around the approach to the service idea. All of the early LBS ideas are much too predictable, and with the least amount of analysis, are proven to be weak ideas at best. Take the “find me the nearest Italian restaurant” or nearest cash machine etc. Most of the time you and I are near our home or work. We know perfectly well where are the nearest restaurants (or cash machines etc).
Occasionally we visit a colleague or family friend and might need to know a restaurant, but then we are prone to ask our colleague or relative who lives or works there, who will of course know. Or we ask the hotel concierge etc. Only rarely in our daily lives do we come across the need to consider a new area and be without any guidance. This is likely to happen mostly only in traveling.
Then, apart from LBS roaming, language, technical compatibility etc concerns (ha-ha), we have the human behaviour element - if I am going to Hong Kong next month, I will tend to prepare for it BEFORE I travel. I will look at a Hong Kong map as I select my hotel, etc. I do not land in Hong Kong and find myself downtown and then think, I wonder where is a hotel, let me see if my mobile phone can locate one. It is very rare to be in those situations where a LBS service is requested by a user.
The need is to discover totally new things that were not possible before, that the mobile phone can now serve.
Two good examples. One is the hunting dog locator from Finland. For hunters there is now a service that allows the dog to be tracked on the screen of a smartphone or PDA. The service allows the hunter to listen via the microphone on the dog’s collar in case the dog is barking etc. This serves a very specific niche market, but is a very powerful addition to the hunter’s tools.
Another example comes from Vodafone Germany, where now LBS based allergy warnings and updates are available. So if you suffer from allergies, and the wind direction changes, or a rain spell comes in to change the pollen counts in your region, the LBS based allergy warnings will tell you how to react. These kinds of services will make sense.
In general I would say that the LBS opportunity overall has been overhyped, and the true power of the mobile phone comes much more from community and personal services. LBS is an idea pushed by the engineers, and is likely to disappoint during this decade.
Russell: How do you see user’s use of 3G differing from 2G networks?
Initially almost no change, but rather more of the same. We will talk more as voice minutes will be cheaper on 3G than 2G. We will send more text messages. I think in the area of browsing (WAP and other pages) the amount of data traffic will increase dramatically.
In the case of modem access, a 3G modem is much faster, and usually cheaper per MB than a 2G modem, so heavy users will migrate fast, and then put much more traffic than they used to. In fact many 3G modem users will soon abandon their WiFi subscriptions and perhaps even their home broadband connections as they find the utility of 3G being so superior, like I have found with my Vodafone 3G modem card that I use right now when I am writing this reply at a cafe here in London.
In the longer run we need to see the service offering differentiate on 3G from what is available on 2G (or 2.5G). One early example is direct music sales. In Korea already 13% of all mobile phones have been upgraded to 3G, and the market has enough of a phone population to start to sell music directly to the mobile phones (similar to iTunes on Apple iPods via the web). In Korea last summer Ricky Martin sold 100,000 copies of full digital quality tracks from his upcoming album, a week before the album was released.
As our device populations reach such penetration levels, music will be sold directly to our phones. My current Nokia 3G phone is also an MP3 level music player.
Russell: If you had to bet on one new 3G service or application, what would it be?
Mobile blogging is perhaps the biggest new opportunity I see now.
I should say that it is impossible to guess what new can appear, until the radically new idea is deployed somewhere. That is the nature of invention.
For example my favourite new service of 2002 was Shazam the music recognition service, and my favourite new service last year was Waiting Tones/Ringback Tones from Korea. Even with 300 service ideas in my books, I could not foresee these kinds of radically new ideas. It should be noted that just last year, Waiting Tones worldwide made more revenues than the industry’s favourite new service idea, MMS (just as I predicted, ha-ha).
Russell: What’s your personal favourite mobile service or application - regardless of commercial success.
There are so many.
I really love the mobile phone police radar trap warning idea from Pelephone in Israel. In Switzerland the service idea even has local drivers contributing info so it is a true community service.
I very much love the Orange Netherlands idea of the bundling of handsfree kit etc for bicyclers, with the clever phone battery recharger that works when you peddle the bike. If you are socially or politically inclined to support “green” values, this idea appeals to you, saving on the energy wasting, and recharging your own phone as you bicycle.
As a traveling businessman perhaps my greatest joy was opening the Singtel welcoming message in Singapore this June, which I was expecting to say something like most networks do, “we are the best quality network bla bla bla” and just waste my time. But instead, Singtel’s welcoming message started off with today’s exchange rate between the Singapore Dollar and the British Pound.
I loved that. It was the first ever welcoming message that I kept (and as I am in another country every week, I get literally dozens of welcoming messages every month that I hate). There are dozens more, including Shazam and Waiting Tones and others above.
Russell: What are the main lessons operators should have learned from launching 3G services so far?
We have talked about this a lot at the Oxford University 3G courses that I lecture at, and have of course followed closely the various launches of 3G around the world.
The first customers to sign up for 3G are not mass market customers. They are early adopters. An early adopters’ needs totally different marketing messages and support than a mass market customer. And most importantly, anyone who gets a 3G phone will also have a very late model GPRS (2.5G) phone on another network. The user will compare. In most cases the 3G user will be disappointed… The 3G operators must understand these realities at launch.
Russell: What do you think operators can do to encourage innovation? For instance, I recently wrote this in which I suggested operators should consider actually paying developers rather than rev share agreements.
I write a lot about partnering and revenue-sharing and working with developer communities in each of my books. My subtitle for this book, 3G Marketing, is “Communities and Strategic Partnerships” and engaging and supporting the developers is a key theme throughout the book.
I agree strongly with your thoughts in your commentary. I think mobile operators are on a very steep learning curve, to try to pick up good habits and corporate philosophies on what is the true meaning of partnering.
Again I think Nokia can provide an interesting role model. Did you notice that Nokia has started to say its key competence for winning in the future is to be a leader in “superiority in alliance networks and the ability to manage them” - think about it. Not supplier chain management or fashion design or customer insight. But superiority in alliances (partnerships) and mastering how to manage those critical relationships. Nokia as the huge player in this industry still understands they cannot do it all themselves. Of course mobile operators will be even less able to do it all themselves. Here is a good goal for them to aspire to.
Russell: Is there anything you’s like to add?
Maybe two things. Churn, loyalty.. and segmentation. A couple of quick words
First on segmentation. Mobile operators all around the world are stuck in discovering that their current segmentation systems do not support modern focused marketing efforts.
They are in panic. I would say, don’t worry, everybody is in the same boat. Read the segmentation chapter in my book, then do NOT hire a marketing/segmentation specialist from outside telecoms, they are like children when it comes to the richness of our data. Its like hiring a ballooning expert to design the fifth terminal at Heathrow. Bring in only segmentation specialists who really understand mobile telecoms. Companies like the Henley Centre, Xtract Ltd of Finland, SMLXL here in the UK, Compwise in Israel, and of course myself ha-ha..
Then on churn and loyalty. A few words of warning. In Finland mobile number portability and MVNOs (Mobile Virtual Network Operators) have been a reality now for a couple of years. Also in Denmark. Both countries have seen churn rates skyrocket.
The competitive environment has seen truly cut-throat price wars. In both very mature and profitable markets, all established network providers have suddenly turned unprofitable. In Denmark the situation is so bad, that Orange pulled out saying it was facing 19 national brand competitors (including network operators and MVNOs).
Like in Hong Kong earlier, it is going to get very much worse before it gets any better. The best suited players have a strong well-thought out strategy, are nimble to react, don’t panic, keep focused, and fight strongest for their strategic goals, ready to abandon segments and market niches that turn unprofitable.
That’s it folks. Lots to think about and nothing I can disagree with. If you have any questions for Tomi, leave a comment below and I’ll ask him to respond too.
Russell
It seems that despite video calling failing to take off anywhere (or any evidence that users actually want them) operators haven’t given up on the pesky things yet. However, they are getting a little cleverer in how they promote them.
You’d have thought that UK’s 3 of all companies would have had its fill of promoting video calls. It’s whole launch strategy was based on this service, despite the illogicality of promoting your Achilles Heel. In other words, you can only make a call if you know someone who also owns a handset. And the one thing you can guarantee with a new handset launch is that most people won’t know anyone else with one!
KPN cleverly got round this problem by giving away a desk top application that allows you to video call anyone else with a PC and a webcam. Smart thinking, chaps. But does anyone use webcams either - except in the adult context?
3’s new initiative, according to Net Imperative is to run a promotion based around video dating. Users are invited the record their own video ad and send it to 07915 123123 (in case you’re tempted). These will be posted on www.endoftheblinddate.com for others to gawp at, chuckle, feel generally superior and vote on. Echoes of HotOrNot - still going strong after all these years.
Now that 3 have reached some kind of critical mass in video compatible handsets, it’s not so much a question of finding someone to call, as finding a reason to call them. They obviously think that video dating is one of the applications that will convince us (well single us’s) to start to use this service.
3’s marketing director, Graeme Oxby said: “With technology now available, people can use their mobiles to see and hear their potential partner before meeting them. It’s the beginning of the end of the blind date as we know it.”
What I think they’re missing here is a basic usability issue - that video calling makes most people look errr….fat and ugly, not to mention slightly retarded. So unless you have real film star looks, you’re going to avoid it like the plague, especially for dating.
Another usability issue is if you hold it where it feels comfortable (about waist level) it makes you have a very pronounced double chin. This means you have to hold the camera above your head to get a vaguely flattering angle. Which makes you look damn silly if you’re using it in public.
So, yes we need reasons why we need to use this feature. But I’m not convinced dating is one of them.
Personally, I’d stop flogging a dead horse with video calling. People will discover their own uses for the service, now it’s available and if they value it.
But there are two angles I think could be important. Firstly, what’s happening around users, rather than stressing the talking head approach, especially when the talking head doesn’t look very good.
The key to this is how you can enhance the communication experience. Which brings me to the second angle, which is sex, of course. It always is
Ein schones Wochenende, as we say here in Germany.
Russell
PS Another possible huge angle for video calling is covered by Lockergnome - Doctor visits. In the UK alone, there’s 98 million visits to a General Practitioner every year, which are un-necessary.
If only some of those could be screened by video calling, the cost savings could be huge. And the profits for the operator huge.
There’s been much coverage of the new Swedish study linking tumour growth to mobile phone usage. OK, they’re benign tumours, but given the choice, most people would prefer not to have tumours at all.
In case you missed it, here’s what Yahoo News said:
According to the work conducted by the Stockholm-based Karolinska Institutet, long-term cell phone users are twice as likely to be diagnosed with acoustic neuroma, a relatively rare (1 in 100,000) benign tumor that grows on auditory nerve. The risk was restricted the side of the head where the phone was usually held.
Because only analog mobile phones had been in use for more than 10 years, the Institutet’s researchers said they were unable to confirm that tumors would also develop more frequently in users of digital (GSM) handsets.
In other words, there is an increased risk, but we don’t know much about this yet.
This unknown factor is one of the reasons why I wrote a few weeks back about why it’s sensible to discourage mobile phone ownership and usage among kids, as per UK Government guidelines.
CITA’s response is interesting:
The CTIA, which represents U.S. wireless operators, said that the study shouldn’t be dismissed, nor should it be considered absolute proof of dangers.
“The wireless industry agrees that more research is needed in this area to provide definitive answers to any questions that might still exist,” the organization said in a statement. “Numerous independent scientific bodies have conducted research on possible health effects from using wireless phones and it is widely accepted that no conclusive link can be made.”
I’m undecided if this is a sensible, pragmatic response or a Big Tobacco-type “in denial” one. It was only very recently that Big Tobacco stopped its “no conclusive link” stance, despite killing thousands of people every year.
We’ll get better information over time and we’ll see how the mobile industry reacts if there’s any more bad news.
Please don’t misunderstand me here. I’m a fan of mobile phones and I’m going to continue using them. I do tend to use mine less and less for voice and more and more for other things (SMS, games and WAP, increasingly). But that’s nothing to do with health concerns and everything to do with Skype, which only affects phone companies’ health
In my earlier blog about Napster’s launch of prepay, I observed that the market seems to be restricted as so many free P2P sites were still available.
Actually, latest figures highlighted by The Guardian, show it’s worse than that.
Research firm NPD disclosed that the number of users downloading music has fallen from a high of 1.3 million a month to 1 million. The drop off coincides with the end of launch promotions.
Meanwhile, the number of households using P2P free downloading sites has risen to 6.4 million.
This is really concerning for the legit sites.
Firstly, P2P dwarfs the legit ones, despite all the marketing dollars invested.
Secondly, the RIAA actions seems to have done nothing to discourage users from using P2P.
Thirdly, while the research tracks 40,000 computer users, I personally wouldn’t agree to being tracked if I was planning to use P2P downloads and risk being sued. So it could be that the stats for P2P use are vastly under-reported.
Fourthly, it’s becoming increasingly difficult to persuade teens on limited budgets to “do the right thing” and go legit. When all their friends are going P2P, this becomes the “normal” behaviour and paying for music becomes deviant. When user values are so out of kilter with the industry, something has to change. And it’ll have to be the record industry.
This is all sobering news for the record industry (who were holding legit downloads up as a saviour) as well as for the legit download sites themselves. Unless they can stamp out P2P (they can’t!) the future looks grim for both. They need to quickly work out how they can add value to the music itself, or they’ll go the way of vinyl.
