On Technology and the Future: Education, IoT, AI, Mobility, Games

Tag: D2C

Unsung Heroes – SendMe Mobile Looks at $150m revenues!

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On 06/10/2009

In 1

With smart phones, app stores and the likes being all the hype, some of the commercially more successful mobile entertainment companies over the past several years tend to be, well, maybe not forgotten but dropping out of the limelight. I am talking about direct-to-consumer (D2C) providers.

Mobile D2C has been a much-maligned segment: Jamba/Jamster (now Fox Mobile), Zed, Buongiorno (or rather its Blinko consumer brand), Thumbplay, Playphone, and then the ones that have been gobbled up by competitors or fallen by the wayside over time such as Movilisto, Jippii, Monstermob, I-Touch, etc, etc. And the bad name was, at times, fully justified. Various subscription scandals, resulting class actions, general discomfort by consumers on how to handle this new type of service offering (and how to get rid of it again), they’ve had it all.

But what they also have is a real business. Just about the only awe-inspiring numbers the mobile content space has seen came from D2C players: whereas numbers are – as usual – a little hard to come by, Zed had previously been reporting monster revenues, Thumbplay is said to be the US market leader and grew from 2007 to 2008 by a cool 275%, Jamba was past the $600m mark already back in 2005 (I do not have more current numbers).

There are companies however that tower over much, much better known mobile entertainment companies but largely escape the hype, and one of them is SendMe Mobile. Their founder & CEO Russ Klein recently revealed the company’s revenues, which are a not too shabby $10m — per month — and looking to ramp up for a cool $150m p.a. by the end of this year! So Russ’ company, which was founded only in 2006 and which deals with the relatively mundane end of mobile content outsells probably the vast majority of mobile entertainment firms on the planet. So who has heard of them? Many, many of their customers, I suppose.

SendMe has raised around $35m in venture capital to get here and doesn’t expect to needing anymore. SendMe also runs a mobile social community (MBuzzy) and has a reverse-auction service (SoLow). And that’s it. Easy, huh? I tip my hat, Mr Klein!

Mandalay buys AMV

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On 28/10/2008

Twistbox owner Mandalay has bought European D2C firm AMV for $22.8m in cash, shares and deferred consideration. AMV operates the D2C brands Bling et al.. The new European HQ is to be at AMV’s UK location in Marlow, which presumably means a demotion of Twistbox’s Charismatix branch.

The rationale of the deal appears to be this:

The combination of Twistbox’s global on-deck distribution with AMV’s direct-to-consumer expertise uniquely positions Mandalay Media to deliver compelling consumer propositions while maximizing revenues for its wireless operator and content partners,” stated Twistbox CEO Ian Aaron.

Whether or not this position is “unique” does not really matter. And why a D2C offering maximizes operator revenues is at least unclear, too, but hey, who cares? What is true is that Twistbox runs some operator decks and has – through the old Charismatix links and its adult footprint – some decent links on a number of carriers in Western Europe. To bolster this with £10m of D2C revenue (this is the number the AMV website would make us believe) makes sense as the sensitivity of carriers to accept competing offerings outside their decks might well lessen. In this case Mandalay/Twistbox/AMV may indeed be onto something. The remaining question might be if the (current) breadth of distribution they have is enough. But it’s not the end of days…

Mandalay/Twistbox has by now ramped up a decent amount of venture cash (see here for a previous round) and is yet still seen to be breaking into the top tier. Come on, guys!

Playphone's Pitch: start of D2C shake-up in Europe?!

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On 08/05/2008

US D2C mobile content distributor Playphone announced it would acquire (well, they call it merge) UK counterpart Pitch Entertainment. No details disclosed (yawn). Playphone operates its own content storefront as well as the mobile portals for the likes of ABC, Wal-Mart, Cartoon Network and RealNetworks. Pitch does similar things but predominantly in Europe and a few South-East Asian countries.

The move likely signifies the begin of the assault of the US D2C players onto Europe. This may have been a bit of a surprise a couple of years ago but it demonstrates the change the US market has undergone, which lets companies emerge that have a huge home market in their backs giving them the muscle to try out expansion into other markets. The advantage of US-groomed companies in this space is that they have been growing up in an environment that centers more around the web than it does/did in Europe. And they have become very, very good at that. Numbers are, as always, hard to come by but by the looks of it the likes of Thumbplay have slammed even D2C giants Jamba/Jamster pretty heavily over there.

With the market moving away from expensive, low-margin off-the-page distribution, which also provides limited scalability and the increasing attraction of the mobile web, that medium is likely to gain in significance fast. This will also be boosted by the tumbling walled gardens and the aggressive introduction of data flat rates by carriers (see a piece here). The trio of European D2C giants, Jamba, Zed (see here and here) and Buongiorno are girding themselves for this but a market entry by Thumbplay, which has been going from strength to strength in the US can surely only be a question of when not if. The battle for D2C Europe should be an interesting one…

Even Gameloft can fail, apparently: disconnects Connect

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On 04/01/2008

Mobile games giant Gameloft, the one company in the space that seemed immune to failure, apparently shuts down its Gameloft Connect D2C service. Gameloft had started this as a iTunes-style application with all the bells and whistles: it was a downloadable PC application that allowed users to browse Gameloft’s catalogue online and bypass bandwidth restrictions (and billing charges) of mobile networks by utilising the computer’s bandwidth. Games could be loaded via a PC-handset connection and activated by SMS.

However, now it seems to only signify that direct-to-consumer propositions for mobile games are a tough business. They may have wanted too much: mobile games are a very real business but they seem to be too niche still to justify a full-blown integrated product like this, in particular when it is not a one-stop shop but only provides access to one publisher’s catalogue (even if such a good one such as Gameloft’s). A real pity that!

Only Jamba does the Simpsons

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On 04/07/2007

In Deals, Games

Jamba struck a remarkable deal, we read: in the US, content for Fox’s cult TV series “The Simpsons” will be exclusively available via Jamba (or Jamster as it is known there). This will mean that consumers will NOT be able to download it from carrier decks. A major push for the D2C business (and only a day after we mused the consolidation of the sector). They introduce a new subscription plan (“Yellow Plan”) for $9.99 a month, which offers credit for six downloads from a selection of The Simpsons content, including the Simpsons’ mobile game which is produced by EA. No word if EA is prohibited from selling the game elsewhere; I doubt it.

The really interesting point is however the way Jamba positions itself with this: the company had been struggling and was indeed hit by lawsuits (class actions and all; there are even dedicated hate websites for it) over what many people found questionable business conduct, namely by allegedly luring people into relatively costly subscriptions (e.g. in the UK £4.50 per week; for games even £6.00) by offering – at first sight – free content.

Whether or not a consumer feels ripped off depends on the perceived value they receive. When I want to purchase a ringtone and end up paying £22.00 in the first month because I did not realise that I was entering a subscription, then the perceived value does not add up. If, on the other hand, I enter into a $9.99 per month subscription to obtain free access to my favourite TV show, then that might well be a different story: perceived value adequate equals happy consumers equals return customers equals a very successful and – more importantly – sustainable business.

Despite the bumpy ride through the courts, Jamba has always been very innovative and also quick to react to successes and failures, so it is somewhat unsurprising that they should have come up with this concept now. That they did this with so prominent a license deserves respect. Given that Fox (the owner of the Simpsons brand) owner News Corp holds the majority of Jamba, the deal will not even have been very expensive but be more of an act of cross-leveraging company divisions. It would arguably have been a worthwhile strategic investment geared to driving consumers to off-deck propositions in any event: this is an area where the US somewhat limp behind. This could now well be about to change.

On a sideline, this will also likely benefit the likes of Buongiorno: besides yesterday’s announcement of their acquisition of I-Touch, they had previously acquired US firm Rocket Mobile, giving them a substantial footing in this market.

The trophy for deal of the week goes to Jamba though! Hats off!

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