Freitag, 3. Juli 2009

The downturn of the mobile entertainment industry

Back in 2001 the world was still ok, mobile content was something people got excited about.
Personalizing technical equipment (that had been nearly uncustomizable for more than 100 years of end-customer technology) was a revolution.
Critics saying: “No one really needs that, you can just create that by yourself or transfer it via USB, Infrared/Bluetooth were just muzzled by the overwhelming success of instant fulfilment of OTA delivery.
High pricing either was accepted in through lacking “out-of-the box” alternatives, or - which was mostly the case - pricing and foremost subscription information was just not seen, as mobile content providers created and defended their very own rules of “pricing transparency” - in other words they just practiced straight ripp-off. The carriers, who actually should protect their customers from 3rd parties swindle looked at the whole game with mixed feelings. Complaining and yelling customers on their hotlines on the one hand and strongly ever increasing revenues through their share in the business.
Along with the growing business the practice of pushing people into subscriptions despite customers wish for “only that specific piece of content” quickly grabbed bloggers as well as traditional medias interest and public stories of “Rip Off Ringtones” stroke the industry the first blow. The following regulations made by official distributive protection were - in most cases - only cosmetics. However the big hype and easy money was over around 2005.
The following years were characterized by faltering or slowly declining revenues. Ideas and trials to stop customer rip-off by transforming the business into “value-for-money”, real-pricing transparency all failed because the strong cutbacks in customer lifetime value (no recurring payments anymore) could not be compensated by rising figures of individual sales.
Only a few companies took the hard step of cutting down their business to a reasonable size that could be nourished by fair priced value-for-money offers.
Most companies just muddled through in hope for the golden idea that would bring them back to their glorious growth path of the past. Its just hard to cut off 80% (equals the percentage of revenue that was made with rip off) of ones company size and continuing on a small but healthy level. Hard for owner-managed companies - impossible for shareholder value oriented enterprises like Jamba / Jamster (now Fox Mobile). Lacking a profound strategy how to overcome with that apparently irresolvable problem shareholders exchanged CEOs on a felt monthly base.
New products and content like mobile TV nearly have been an epic fail in all markets and also prospects of mobile music downloads were undercut by nearly 90%.
People just found a better alternative with Apples iPod along with side loading content to their devices without extra (data) cost and hassle with wrongly configured wap settings.
The day the Iphone arrived on the scene - and even more - the day apple started their app store was the definite end of the former system on how mobile content distribution worked.
RIM, Nokia, HTC, SE, LG and Samsung are on the point of opening up their rival stores for the non Apple world.
(Mobile) content creators nowadays just have direct customer access. No need for third party aggregators anymore. Even the carriers - the former definite gatekeeper to the customer base - become more and more dispensable as alternative payment options with way better business conditions for creators are being implemented right now (paypal, credit card, direct debit, ..)
The manufacturer brands don’t seem to repeat the error once made - mess around with customers. Until now we everywhere can see fair pricing models and therefore customers trusting in those new and endless content sources.
To be honest - I don’t see a very bright future for the former Jambas, ZEDs, Thumbplays, Buongiornos and Bob Mobiles of the world
In fact I expect the breakdown of at least 1 or 2 former market heavyweights in the near future.
For reasonable reasons I just wont say more right now …