Viewers of 1980s-era Monday Night Football or This Week In Baseball might remember a segment called “You Make the Call”, sponsored for quite some time by IBM. It was pretty much as advertised — they’d show a video clip, and you had to play the part of the referee, and decide what the correct call was. Anyhow, I’ve been thinking about a comment made in a panel at SXSW the other day, and I’m at a bit of an impasse, so we’re going to play the MobHappy version of You Make The Call.
The comment came in a panel talking about mobile content delivery, and the deal that Helio struck to offer exclusive mobile access to MySpace came up. Derrick Oien, one of the founders of Intercasting, the company that makes the Rabble moblogging-cum-social networking application, essentially said the deal was good for Rabble because it provides some validation of their market. My initial reaction (surprise, surprise) was skepticism — I’m not sure how many kids will give up MySpace and all the content they’ve put on it in favor of an application like Rabble that’s essentially closed off to anybody that’s not a subscriber (and since Rabble’s only currently available on two US carriers, that’s a problem here). Additionally, Rabble costs $3 bucks a month, whereas MySpace is free.
The natural next thought was that they’d be much more interested in the actual MySpace mobile service on Helio, since it will integrate with the MySpace they know and love, but on the wired web. But are they any more likely to switch carriers to Helio just to access it than they are to pay for a service like Rabble? (I’m not trying to pick on Rabble here, by any stretch. Sub in any paid service that goes through carrier deals). I’m not confident that the MySpace deal — like other exclusive content deals — is strong enough on its own to attract a lot of users. Perhaps when it’s combined with the rest of Helio’s offerings, it could help tilt the balance.
And there’s a third option, of course — that they’ll do neither one and just carry on using MySpace from their PCs.
Here’s the You Make the Call bit: what do you think? Answers in the comments below, please.
After thinking about it a little more, I think what this question really highlights is the need for mobile advertising systems that can support services like these, so they don’t have to make carrier-specific deals and can be free to the end user. Any type of social-networking service depends both on getting a sizable community going, as well as it being easy for people to link up with their existing friends. MySpace on the web satisfies these, while most mobile social applications don’t, for various reasons. But getting mobile advertising to the point where it could render the financial aspect of carrier deals pointless would certainly be a big help.
So, again, what do you think?
[tags]rabble, myspace, helio, social networking[/tags]
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Carlo — I think you’ve got it right in the title of this post. It’s all about the money, particularly for the cash-starved teen/tween age group without a ton of spare cash. Free or nearly free will generally win.
If it’s a good deal for the consumer and it integrates to the point that Helio is effectively MySpace ‘mobile’, then I think there’s a good chance for mutual success.
if this is just a glorified marketing arrangement, I feel the future is limited.
Mobile advertising is one solution. The other is the fact that mobile apps in many cases supplement PC offerings, rather than stand on their own. In some cases when you offer a mobile solution you’re making your PC offering more attractive. While you may be far away from monetizing the mobile experience, the overall service or brand becomes more attractive and therefore can significantly increase the PC traffic (with it’s traditional ad revenue), which in turn may be able to pay for the mobile offering.
There are already some mobile web advertising networks which create revenue from day one, if you just have traffic on your site. E.g. AdMob and Third Screen Media. I’m expecting Google to join the bunch this year.
I don’t think any exclusive content deals, especially on social networking sector, makes any sense on mobile. But carriers do all the can to make thinks difficult for companies who like to serve subscribers from all carriers.
Comparing Rabble and MySpace, I think doing “exclusive” (they do support SMS alerts etc. on Cingular now) deal with Helio was just plain stupid. Helio does have money to burn and they probably pay for the whole development of MySpace’s mobile version, but long-term they’ve locked themselves to a deal with a MVNO facing extremely hard competition.
Best case scenario, MySpace Mobile could have a million subs by the end of 2007 - if they are happy with that, ok fine. Without knowing the details, the deal was probably better for Helio, but I still don’t think it’s going to help them win the race. Rabble at least has a desire to work with all the carriers, facing the cost handset porting, but at least they can theoretically reach much larger audience.
Juhani
There are significant differences between the mobile space and the web:
Many people unfamiliar with mobile economics and user behavior often say, “The web is free. People won’t pay for the same functionality on their phones.”
Well, the mass of people don’t pay for music on the web. Is it a logical conclusion that people will therefore not pay for ringtones on their mobile phones? Apparently not. These are different environments. You do not feel like you are paying for every email you send, but you do know that you are paying for every SMS you send, and it doesn’t make you think twice about sending your next SMS.
The mobile environment does not necessarily have to represent a switching cost for consumers as you suggest:
“I’m not sure how many kids will give up MySpace and all the content they’ve put on it in favor of an application like Rabble that’s essentially closed off to anybody that’s not a subscriber (and since Rabble’s only currently available on two US carriers, that’s a problem here).
In fact, Rabble has bi-directional integration with many popular sites like Blogger, LiveJournal, Eventful, TravelPod and others on the way. With one click, a user can import all of their content. From then on, when a user posts to their Rabble channel, the same content posts to their LiveJournal account and vice versa.
While I agree with you that a user’s collection of media represents a switching cost of some sort, it is important to note that content has a freshness dating. It is not so much that my MySpace page is important to me because of all the pictures there, (because those pictures are actually on PhotoBucket anyway) it is because all of my friends (and “friends”) are there. Those contacts are the glue of any social networking site. Since Rabble is close to a user’s PIM on their phone, it is also close to the most likely location of a user’s list of friends.
Social networking sites are, to some degree, fashionable. Remember when Friendster was THE hottest thing around? Seemingly overnight it wasn’t anymore, but MySpace was. Why is that? And if MySpace is the only site of its kind that anyone would ever need, why is Xanga doing so well? Why is Hi5 coming up so fast? All I am trying to illustrate is that the strength of the magnet that binds people together is perhaps weaker than most people realize and there is another force at work, which is the collective users’ desire to be bound together.
“Additionally, Rabble costs $3 bucks a month, whereas MySpace is free.”
Rabble essentially provides an evolved communication platform on the device that is inherently a communication device even moreso than the PC is. Our subscriber numbers keep growing, so there is apparently some value there for certain users. And it is worth a lot in the long-term:
Mobile self expression and communication (with strangers and friends) is valuable enough to generate over $55 billion annually:
http://www.160characters.org/news.php?action=view&nid=1789
Rabble is simply an evolution of communication which aims to provide consumers with new ways to express themselves and connect with other people, just like the various mobile chat products like UPOC and Hook’t. Where it goes beyond chat is in providing blogging, picture sharing and mobile relevant functions like Events, Places and other features that enable people to identify other people with similar interests and connect with them. Users can get unlimited messaging, are able to post pictures right from the device that is generating them, can communicate in realtime and have the added mobile relevance of location and proximity to the people and things around them.
All this for about a dime a day.
“After thinking about it a little more, I think what this question really highlights is the need for mobile advertising systems that can support services like these, so they don’t have to make carrier-specific deals and can be free to the end user.”
You are 100% correct and I couldn’t agree more on this point. But an ad-driven model, while certainly a good idea, simply is not a reality in the mobile space today. The entire mobile advertising ecosystem, from display and consumer action to providing inventory and a marketplace to transact and track it to the myriad financial considerations - simply does not exist today, and it won’t tomorrow. In the meantime, consumers are happy to pay for value and are generally glad the amount of spam they receive on their mobile phones is minimal. (btw, MySpace CHOSE a carrier-specific deal for reasons that I am sure made sense to them.)
“But getting mobile advertising to the point where it could render the financial aspect of carrier deals pointless would certainly be a big help.”
Wireless spectrum, unlike fiber, is a scarce resource and you cannot simply light up more of it when you need it. For this reason, there is a real cost associated with provisioning content of any source. The owner of that network bears the cost and must recoup it. There are several ways to offset this cost, and advertising is one of them. But there are others that work for consumers, for carriers and for companies like Intercasting Corp. A combination of these is ultimately the right way to go.
In the meantime, there is no mobile MySpace, and Rabble is live and appears to be addressing a desire for a type of communication that consumers want.
The above post, in all it’s long windedness, sounds like a company trying to justify it’s existence. Never a good sign, the business/model should speak for itself. The poster is the founder of Rabble - full disclosure.
Wow. I was just pointing out the differences between the web and the mobile space. The devil is in the details, so I wanted to be as complete as possible to add value to the discussion. (Though I grant you that in general I am prone to lengthy posts. What can I say?
)
It is easy to be a critic. It is easier still to be an anonymous critic. I encourage you to examine my comment again and consider my points on their merit then try commenting intelligently on those rather than making general castigations.
Hi, I would like to join the discussion in support of myspace’s exclusivity approach being a terrible idea. I also disagree with Rabbles approach of charging the user a subscription fee. Based on the lessons taught by success stories of the social networking space, the consumer audience is very very fickle, consumers demand three things: Ubiquity so that a circle of friends can all join, free service, and a consistent quality of service.
I believe that both the Helio deal and the Rabble approach requires too high of a switching cost from the user (either a new $300 handset or a subscription fee) to enter main stream markets.
I think that approaches such as Shozu and yahoo’s soon to be Zone Tagged are all on the right path.
Lastly, i will push my own envelope just a bit. Check out http://www.vcellvibes.com (still under construction) a mobile social network with myspace integration, cross carrier compatability, and a mobile advertisement channel smoothly integrated, and most importantly FREE to the end user with a low switching cost.
[...] When I asked for your opinions last week about content pricing strategies, I added that there was a need for mobile advertising systems that could help support content, and allow users free access to services, like they enjoy on the wired Web, while still providing for revenues for content and service providers. [...]
[...] Continuing Carlo’s “You Make the Call” theme, I thought I’d ask you what you think of this one. [...]