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Media funds may soon shift to mobiles

Posted: 13 Feb 2008 ?? ?Print Version ?Bookmark and Share

Keywords:media services? mobile device market? navigation?

At the Business Operations Symposium of the Mobile World Congress, Pertti Kasanen, Nokia Siemens Networks manager for end user solutions, stated that in a mobile universe, media services are evolving into a zero-sum game.

"While we get media to mobile," said Kasanen, "it is more money to us." By comparison, he said, shifting specific media services such as news, music and communication among various fixed-line carriers such as PCs and TV sets "is moving money from one pocket to another."

The implication of Kasanen's thesis is that when media services go mobile, they drain some or all of the associated revenue from older, fixed-line services.

To arrive at this conclusion, he said, Nokia researchers reduced the myriad existing Internet media services to 12 categories: social networking, search, photos, music, video, maps and navigation, games, e-commerce, news, encyclopedia, blogging, file sharing and communication. As these categories become as accessible on mobile devices as they are on fixed-line devices, he said, fixed-line usage will decline proportionately, never to recover.

Meeting the demand
This trend will accelerate with the improvement of mobile service providers' skill in tailoring services to the needs of mobile users, who tend to be younger and more individual in their expectations, Kasanen said. "The challenge is hearing the people," he said. "Hearing about users is the key!and building customer segmentation models." Such models have to calculate and monetize how many users are in these categories, so service packages can be designed to serve these categories. But since these design decisions tend to be trend-based, service providers must be nimble enough to recognize when packages are not working, and unload them swiftly, said Kasanen.

Among the other demands faced by mobile service providers in a market clearly more fluid than the already-volatile Internet services market are finding ways to "measure the lifetime value of a customer" and "finding out what content means the most to them."

Kasanen added that this effort must fit into a business model that is literally upside-down, if compared to traditional notions of starting and running a successful enterprise. An Internet or mobile services business starts by offering its product for free, hoping to draw enough interest to attract enough advertisers to generate the beginnings of cash flow, he said. Profit doesn't come!if it comes at all!until the service is so well established that it can move from its previous two non-profitable stages to the level of "premium services," paid for by customers either piecemeal or by subscription.

Addressing the issues
Of course, the shift to premium paid services might be the point at which the package stops working, he cautioned.

Among the future issue that will impinge on this business model, said Kasanen, is the eternal question of interoperability among devices. Customers who acquire content on a mobile device will expect!perhaps more than ever before!to move that content to other devices, and to other people's devices. This expectation poses technical, proprietary and copyright issues that the industries represented at the Mobile World Congress are still struggling to resolve.

Another dilemma is the issue of battery life. The more Internet content moves to mobile devices, the greater the pressure on each device's battery life. "This is a problem that's practically impossible to solve without the operators' help," said Kasanen.

In the final analysis, Kasanen reiterated, the pace of the shift of media services from fixed to mobile devices, although inevitable, will depend on "stronger customer relations and more profitable customer relationships."

- David Benjamin
EE Times

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