(Updated with an apology and explanation from Bluepulse noted in the comments.)
From time to time, I get asked by people at various companies “about blogs and stuff”, in particular how companies can best deal with blogs from a PR and marketing perspective. Two things I stress are sincerity and honesty. Companies need to be sincere in their communications with blogs, but more importantly, they need to be honest. Recent history is littered with examples of what happens when companies don’t take these lessons to heart.
Earlier this week, one of my esteemed colleagues here at MobHappy gave a really positive review to a piece of mobile software called Bluepulse. Some people, myself included, weren’t as enthusiastic — which is fine, we all can disagree — and said as much in the comments. Somebody going by “alan” from the company was happy to play along, responding to questions and criticism. That’s great, that’s what it’s all about: taking part in the conversation.
One of my criticisms was that the company’s claim of “any phone, anywhere” was dubious, which it is — how many times did people say “write once, run anywhere” about J2ME? Alan took exception to that, saying the company had never made that claim; I helpfully pointed out where on their site they had done so, in those exact words.
Now where things go off the track is when another guy, “Luke”, who lists his web site as http://www.bluepulse.com, so we’ll presume he’s an employee too (particularly since he posted from the same IP address as Alan), comes back a couple days later to say that I’ve left out a key word, that the quote is actually “Your content and applications, on almost any phone, anywhere…” Click on the link to the relevant page, and yes, it says that… now.
You see, the good folks at Bluepulse have gone back and changed the page, then it would appear that one of them couldn’t resist coming back to the site and pointing out my “error”. The problem — for them — is that they didn’t think about the good old Google cache, as you can see in the screengrab above (go ahead and click it to see the full-size image).
So instead of saying “hey, that’s some aggressive marketing copy, we’ll tone it down a bit”, they change it, then come back here in an attempt (I guess) to try to impugn my integrity, or, at the very least, make me look foolish. Funny how things like that can backfire. So there’s a lesson here in honesty for companies on the web. Well, that, or at least be smart enough to cover your tracks.
Update: Alan Jones from Bluepulse offers an apology and explanation in the comments, as does Luke. Thanks, guys.
The mobile phone market is still booming, with Strategy Analystics saying a record 810 million handsets were shipped in 2005 — projecting 930 million this year and 1 billion in 2007. Emerging markets accounted for half of total sales, underlining their importance in the modern market. This growth comes at a cost, though — the lower average selling prices and margins that dogged Nokia’s latest results.
Vendors can make a play for either extreme: take advantage of the high volumes and revenues these markets offer in exchange for lower margins, or focus on more expensive models at the cost of unit sales in markets with low buying power. Most, though, try to play in the middle, and don’t really do too well. They hope to cushion the ASP drops with sales of more expensive devices in mature markets, but there’s a key realization they need to make: just because people can spend more doesn’t mean they will.
Look at Nokia’s comments about sales in the US. It increased its market share to over 20% from 14.3% in the previous quarter, giving much of the credit to its 6101/6102 handset — a Series 40 flip phone that could hardly be considered high-end, and one that Cingular is giving away to customers currently if they’ll sign a 2-year contract.
It’s got a pretty average camera, no expandable memory for music playback, no Bluetooth, and so on. It’s decently equipped, but doesn’t have all the features of a high-end Series 60 smartphone. But, that’s not important — it’s cheap, and perhaps more importantly, it’s a clamshell, and it’s selling really well.
Lots of people — particularly in the US, but I’d venture it applies generally across the board — don’t see much reason to spend a lot of money on a phone. It makes calls, it sends text messages, it’s got a camera, it can download ringtones and maybe games, so they don’t see why they should spend more money to get a more powerful device. That signals a marketing breakdown on the part of the vendors and carriers, one that we’ve seen many times before, most recently in the case of 3G. Operators struggled to find something they could show people to sell them on 3G; they think they’ve found it now with mobile TV (but debating that point is for another post). Why should a user buy a smartphone? With the increasing trickle-down of features from the high end to the low end, that question becomes more pressing.
The implications of all this are that vendors are selling plenty of phones, but they’re doing a poor job of selling phones. Users see a cheap phone, see one that looks right, and they buy it, paying little attention to more expensive devices regardless of their advanced functionality. Until they’re presented with a good reason why, this won’t change. That’s the challenge for handset vendors, and it fits right in with operators’ struggles to sell users on advanced services. Both do a poor job of explaining to consumers why something’s worth more of their money.
We’ve been talking a fair bit lately about this concept of user benefit. It usually comes up in the context of mobile marketing, basically saying that if users are going to allow marketers onto their device, they’ve got to be offered something worthwhile in exchange. Let’s call that the “What’s In It For Me?” principle. The same thing applies here. Handset vendors want people to buy more expensive devices. Those people reply, “what’s in it for me?” They’re then hit with a bunch of meaningless acronyms and tech specs rather than any sort of idea of the benefits such features deliver. Until vendors and operators can better answer that question, plenty of consumers will keep passing up more expensive handsets, and those ASPs will continue to fall.
UK’s 3G network operator, 3, is interesting to follow as, to their credit, they keep trying new things. Sure, some may not work (like denying net access to subscribers) but some will and that’s where their growth will come from.
WePay, launched today, is another innovation and I find myself rather intrigued. It rewards Pay As You Go Customers with cash credits for receiving incoming calls and text messages. Subscribers get 5p per minute for inbound calls and 2p per sms, with the money being able to be spent against any 3 service.
OK, sceptics will probably be wondering how this is going to help generate traffic as an individual can’t do much to get people to call them. Therefore, aren’t they just going to be throwing away margin un-necessarily?
My view is that we need to look at this as a customer acquisition model. If you’re a customer who “happens” to get an awful lot of incoming, wouldn’t it now make sense to switch to 3, if you haven’t already?
But it’s actually cleverer than that. People making and receiving a high number of calls (especially receiving them) are likely to be important within their peer group. I’d go further and suggest that the more inbound calls you receive as a proportion of your outbound ones, the more you’re likely to be considered a leader within your social circle. This is because people are trying to hook up with you, rather than you chasing them for contact.
So by directly targeting the important social movers, it may end up with the Alpha socialites all owning 3 phones. And the Beta socialites tend to emulate their betters, don’t they?
It would be intriguing to know if 3 are thinking in quite these terms or if I’m over-analysing again!
Update: It seems like there’s not much new in this type of offer and it may be short-lived if Rumania is anything to go by. According to a reader of The Register:
“Something similar was offered by [major cellco] here, in Romania, for a student-oriented service. What happened was that students signed up for the service and then put up classified ads offering non-existent apartments, cars or other merchandise at too-good-to-be-true prices, asking to be called on their mobiles. As far as I know, [major cellco] had to withdraw the offer.”
Original story Via Net Imperative
Just before Christmas, I developed really bad pains in my left wrist. After a few days I self-diagnosed these as being some kind of Repetitive Strain Injury from typing too much and more importantly, in a poor position. It got so bad that it was agony to type and I had to take a few days off.
After reading around the subject, I got myself a Microsoft Natural Ergonomic Keyboard 4000 and I have to say things got better immediately. Now, I get the odd twinge, but it’s only when I revert to poor wrist position, which is actually quite hard with this keyboard. You should have your wrists perfectly straight, not bent on the horizontal plane, at all.
If you do a lot of typing (and most of us do more and more) I strongly urge you to get one of these, or at least a similar model from someone else. RSI will probably strike you at some point and prevention is better than cure.
I hope you know me well enough for this to be superfluous, but I’m not getting a backhander from Redmond for writing this and I paid retail for the keyboard. But, it’s easy to focus on what the Big Fella is doing wrong sometimes and forget that they do an awful lot right.
Well, apart from their mobile strategy, obviously 
We continue yesterday’s interview with the Diva of Mobile Erotica, Julia Dimambro of Cherrysauce. Some estimates claim that already 40% of mobile content (excluding ringtones) are adult in nature, so it’s an important market to understand, even if we don’t plan on joining in ourselves.
Russell: Are there any particular services that you think are actually better suited to consumption by mobile?
I think we will see a few emerge in the coming year and I have my bets down. However, my absolute favourite for mobile erotica in 2006 at the moment is Live and Interactive video chat.
We are in the process of launching this with a company called CC Media and since my days at Private, before it was even technically possible on mobile, I have believed this to be the killer application on mobile.
It’s so perfect for this environment. It’s the ideal blend of the highly successful internet webcam girls and adult text chat – both unbelievably successful commercial models. Add the impulsiveness and mobility of mobile and the highly improved quality of 3g and just imagine the potential. A totally compelling, personal and immersive environment, accessible whenever you feel turned on and guaranteed to have you coming back for more tomorrow.
Russell: Please can you explain how adult controls were greeted by the industry and what actually happened?
I have written about this on quite a few occasions as it really panned out nothing like we expected. The whole discussion of ‘opt-in’ and asking people to put down personal details to view +18 services started around October 2003 (literally a month after I launched Cherrysauce) with planned implementation for spring/summer 2004.
It had the mobile erotica companies shaking in their boots (including me!)! We did honestly believe it was over before it had begun. When something similar was imposed on Premium IVR services, I heard that they only ever had 50,000 people ‘opt-in’, so it more or less killed the industry overnight - to such an extent that they had to rethink. Therefore, when Vodafone announced a similar initiative for adult mobile data services, the future looked pretty grim.
However, what actually happened was the reverse! What we had up until then, was a big gap between what consumers wanted to view and what operators were willing to offer. Before access controls, the ONLY discussion around mobile adult entertainment was how to STOP people accessing this content. The introduction of AV was the first time everyone started talking about what we COULD offer as apposed to COULDN’T.
This has progressed immensely over the last 6 months with Access Controls in place on all UK mobile operators now. The infamous Vodafone ‘No nipple policy’ has been replaced with a ‘behind AC strategy’, which is actually becoming much more appropriate for someone who has gone through the embarrassing situation of admitting he would like to view this type of content and then handing over all his personal details.
The fact that in mobile, consumers will go through this process to view erotic and adult content really highlights the strength of consumer demand to me! We actually saw revenues for our own D2C hardcore channel go UP after automatic barring and ‘opt-in’ was launched, which we were definitely NOT expecting! The ‘opt-in lists’ are a great idea and an example of the industry coming together to create a better and more personalised end-user experience. They should have just started them earlier!
A year or so down the line after discussions and planning started for AC, I think the UK has really set the bench-mark of how to deliver adult content and service on mobile responsibly and effectively. They have shown how financial gain is possible without a negative effect on the brand perception.
A good job all round I think.
Russell: Why do you think it’s ended up as being good for the industry? Is it that the industry was growing so quickly anyway that any backlash by potential users was simply not noticed?
It was so good for the industry, because it really opened the market up in a very controlled and monitored way and allowed end-users access to content that we KNEW they wanted.
It also means you will see that companies like Cherrysauce and some of our respected counterparts, who have a long-term view on this industry sector and WANT to responsibly present their products, will gain the benefits of doing so in this industry sector.
Companies who don’t, won’t survive, due to the wonderful policing, regulations and control that mobile has developed. As a result we will have a totally regulated, self-rated and responsible erotic AND adult mobile industry in a short space of time. We are already starting to see this successful model approached by other territories.
Based on some figures I heard recently about the ‘AV drop-off’ (i.e. upon reaching the point where you have to identify yourself and prove your age), around 75% of users don’t finish Age Verifying for different reasons. Please keep in mind this is not a confirmed figure, however, if it is anywhere near true, I feel that much of this is based on the process to AV still being so cumbersome and awkward in mobile.
Filling out multiple mobile screens with credit card and personal details is just not user-friendly. If the usability is improved I believe there are very positive ways to move this ‘bottleneck’ to our advantage. To age verify with any of the current systems I have heard of, users must credit a pre-paid account with a minimal amount using a valid credit card. Therefore by default they have already purchased via credit card as apposed to PSMS (so costing the Content Provider 11-12% max for adult charges as apposed to the 20-30% of end-user tariff that PSMS requires). That saving can be put back into the business enticing users with freebies and discounts and offer to Age Verify in the first place.
Russell: When’s your busiest time of day?
Mainly as you would assume… traffic peaks between 11pm and 3am. However, we tend to get a rise between 6 and 9am as well. Commuter traffic or waking up ‘happy’?
Russell: Give me a couple of predictions for the adult industry for 2006. And for mobile, more generally
For erotica and adult mobile entertainment (Cherrysauce only focuses on a combination of the two), I would say:
Adult will boom in the D2C environment during 2006.
Billing options will expand away from PSMS – the extra margin saved will be used to attract customers to alternative billing methods
Content Providers and Media owners will raise their position in the value chain influenced by the 2 factors above.
Age Verification will take off globally.
Adult Mobile will ‘officially’ launch in America
Operator Portals will DEFINITELY open up to off portal
Straight content licensing (specifically in adult) will only be a model used by the big brands
Cherrysauce will still be 100% owned by the end of 2006
I will have aged another 10 years in the space of 12 months, but with a smile on my face.
Thank you, Julia, that was most informative. Good luck with your plans in 2006.
By the way, to our anonymous correspondent asking for more details, “D2C” isn’t some kind of arcane sexual practice, but a marketing term meaning Direct to Consumer - as opposed to via a third party. Well, I think so anyway.
“Mobile Music A Revenueless Land Grab”, says MocoNews. Somehow, I don’t find that hard to believe. They point to an FT article out of MIDEM, the big digital music confab in Cannes this week, with execs not wanting to talk about how little they’re making from mobile music — and they’re all simply saying that prices are too low. Let’s assume they’re talking about downloads and other services, not ringtones, since they’ve been riding that gravy train for all it’s worth for a few years.
Here’s a thought, guys: maybe people don’t want to spend money on overpriced crap that’s cumbersome to use and ultimately unfulfilling for any number or reasons. Low prices aren’t the problem. They’re out of whack with the actual value users get in exchange. Offer users sufficient value, and they’ll pay more. Offer services where they don’t get their money’s worth, and they won’t. It’s that simple.
Too many mobile music efforts have focused on delivering music downloads directly to the phone, and nothing else, with operators thinking that the anywhere, anytime access is worth a premium price, though it sounds like consumers disagree. The market’s settled on a price (generally dictated by Apple) for downloads, and that price is going to hold regardless of the platform. If they can’t make a profit at these levels, something’s gotta give, whether it’s record labels or what they’re offering.
Full-track downloading really is a pretty boring mobile music application, when the platform’s capable of delivering much more interactivity, and services could build on the core communications functionality of the mobile platform. If there’s no money in downloads, leave that market to online providers, or find a cheaper alternative to setting up your own shop, and offer better services. And if you insist on trying to sell downloads, don’t hamstring them with copy protection so they’re locked to a phone, or worse yet, to a particular service.
On that note, Thor-Arne Pettersen, chairman of the24, which provides content to mobile devices, has an early contender for quote of the year: “If you move from Vodafone to Orange, all your music is lost and you have to buy it again. That annoys kids and encourages piracy,” he said. Establishing clashing proprietary systems “is like peeing your pants to keep warm. It’s very short-sighted and you stink afterwards.”
Julia Dimambro and her company Cherrysauce is one of the pioneers of Adult Entertainment (aka porn) in the mobile space, so it’s great that she found time to give us an exclusive interview here at MobHappy, which will run today and tomorrow.
Adult services have proved incredibly important on the “old” internet, both in generating billions of dollars of profit, but in pioneering many new techniques that cross over to the mainstream.
Will the same thing happen with mobile? Julia clearly thinks so, even though the market seems to be slow to emerge. Anyway, let’s get started with a little background.
Russell: How did you get into the adult industry? Is it unusual for a woman to be involved on the management side of things?
Interesting tale that demonstrates just how strange life’s twists and turns are. I was working in NY as a director for digital design company when the 11th September happened. As a result I obviously wanted to head back to Europe. My parents had recently retired to Barcelona and I asked if I could hang out with them for a while before deciding what I wanted to do (much better place for making life decisions than London!).
I sent out my CV on the off-chance and the first company to come back to me was Private Media Group looking for an Internet manager. I got the job and a year later helped launch their wireless division with a wonderful guy called David Jarvis. He was way ahead of his time with regards to mobile adult content and I am talking 2003 here when Vodafone UK wouldn’t even take our calls!. He basically showed me what an amazingly interesting and controversial industry sector adult mobile could be and as I always had aspirations to be my own boss I set up Cherrysauce later in 2003 and signed Private as my first licensed content provider.
Russell: Does the industry have a problem attracting good people (present company excepted!)
Haha, I laughed out loud when I read this. I don’t think so, because on the whole from my personal experience, I have really only met extremely clever, dynamic and commercial people in the adult industry.
I only had one bad experience when I first started Cherrysauce! It was with someone who basically promised all kinds of wonderful things in exchange for me helping him to set up a ‘complimentary’ company using my contacts and knowledge. I got my fingers severely burnt as a result (I was a bit wet behind the ears still in those days!) The good thing is I learnt a hard lesson early on and it really taught me to protect my company’s interests.
The great thing about the adult industry (both traditional and mobile) is that they don’t beat about the bush. They want clear and simple commercial models and their whole mentality is focused on making money and immediate returns.
‘Taking a view’ or ‘investing now for ROI in 2 years’ just isn’t part of their business language. You’ll be shown the door with that approach.
That way of working just makes so much sense to me. It is all about “ What works?” “What do my customers need right now?” and “how do I get it to them as quickly and easily as possible?” and that’s why I set up Cherrysauce to be 100% privately owned and self-funding. Even today, by working on the ‘immediate return’ model, we have still not needed to take any investment and don’t owe anyone a penny. We don’t even have an overdraft. In turn, this is now allowing us to invest in bigger projects such as the development of our new mobile WAP platform and D2C marketing.
Russell: Sceptics say that adult services won’t take off on mobile as the screen size is too small and it’s going to be expensive to consume - certainly in comparison to the web, even if you ignore the ready availability of lots of free services. What’s the case for mobile?
Glad you brought this up. It’s a very good point and a much talked about issue. To date, it certainly hasn’t lived up to volume and commercial expectations. In 2004 as an example, the quality of the content offered was nothing short of rubbish and I mean really ropey stuff. It mostly consisted of image based products and based on some of the examples I saw being advertised during this time, it wasn’t just the small screen that was affecting the experience – the compression meant images were pixelated or stretched to fit the screen, giving an awful end result. Those poor customers!
The majority of the content was simply copied from other media like the internet and compressed even further to fit mobile. A result ripe for the sceptics to sink their teeth into!
However, we are now seeing the emergence of a new breed of erotic and adult production companies. Their focus is on producing image and video based products that are shot ONLY for the mobile environment. And you can really see the difference, not only in the quality, but also in value to the customer.
With videos for example, if a clip can only be 30 seconds, it needs to offer value for money by arousing the end-consumer, can’t show anything explicit AND at the same time needs to be under 250k (i.e. a typical impossible mobile request!). These guys will be much more capable of achieving all these factors whilst retaining quality and customer experience. As a result, more compelling mobile-optimised products will be created, based on planning, pre-production and shooting with an in-depth understanding of the mobile space.
For this reason, Cherrysauce is actually working closer with these types of production companies. Big brand licensing is a completely different business model and is effectively covered by the likes of Waat Media and Minick who make a very good job of it. I honestly feel there is much more scope and potential in working with these specialist producers and sharing our own results with them to constantly raise product quality and optimise conversion, ARPU and sales.
A simple example of this is if we see Angel Dark (top porn star for those of you who are more innocent) pole dancing, which is selling like hot cakes in Russia for example, we are able to phone our producer and get him to do a range of Angel videos along a similar theme, or follow up with specially produced Angel screensavers or wallpapers.
To summarise, If mobile adult entertainment continues to be based on ‘shop-fronts’ for image and video downloads or focused on ensuring products are listed in operator decks, then the sceptics will be right and I doubt that it will ever reach the hype and speculation that everyone has been talking about over the last few years.
However, I don’t think this will be the case. Adult entertainment by its very nature is extremely adaptive and responsive to any opportunity of making money. All we need is the channel and you can bet your buck that it will be adult providers who create the best commercial models for mobile. Just look at e-commerce. Who set the way for everyone else?
The consumer demand is there and proven. If, in 2004, rubbish quality and adapted adult images and videos, with no marketing and minimal placement on the operator decks could earn the industry $400 million, then I think our focus should be on how we deliver to consumer expectations as opposed to industry expectations.
Get that right and the rest is a walk in the park. For my part and in Cherrysauce’s experience I believe it to be in the D2C market where erotic and adult mobile entertainment will realise the dream (especially mine and as a result, that’s where much of my focus will be in 2006).
Tomorrow, I’ll ask Julia to talk about products best suited to mobile, to tell us about the controversial adult controls we’re seeing introduced and Julia’s top 2006 predictions for mobile erotica and the business generally. Don’t forget to come back!
« Previous Entries
» Next Entries
