Tag: mobile portals

Juniper to the Rescue…

On 27/11/2008

We can depend on the researchers from Juniper after all (or maybe they simply felt bad after reading my post on their last report). Whichever the reason, apparently the mobile content industry could be worth a hefty $167bn (!) if – yes, if – the operators would resolve to allowing a workable commercial environment, namely by limiting themselves to lower revenue shares. Whatever the caveats (which are, as usual, hidden in the expensive main report) this number is topping even the loftiest predictions to date; right on in times of the doom and gloom. The key apparently lies in whether operators would act as dumb pipes (no richness for anyone) or a smart pipe (lots of play money for all players on the value chain). In their own words:

“If MNOs are to benefit financially, they need to move away from their Dumb Pipe roots to the Smart Pipe model, though they will clash with the content providers which already dominate the Smart Pipe. A compromise needs to be found.”

A smart pipe is understood as one where operators would offer flexible, application-centric value configurations, allowing lean, efficient content offerings from third parties. A dumb pipe is one where content (and value) would merely rush through the pipe without any value being added by the operator. The prevailing model in the mobile games world, namely the on-portal approach where operators implement comprehensive vertically-integrated models (“walled gardens”) is suggested to be somewhat doomed as content providers would gain bargaining power (presumably through consolidation of the supply side plus entry of meatier traditional media players in music, video and TV).

This is all pretty speculative though, and without some background it is quite frankly impossible to analyse the numbers some more. Mobile content appears to include (as per their report from March) games, music, video, TV, social networking, adult content, gambling and so on, and so forth. However, the exact calculatory basis is again hidden in the depths of the report, so I don’t know (do they e.g. take the gross gambling revenue or on;y the rake, which is only a few percentage points of the former). Anyhow, due to these foggy conditions, commentators seem to either merely re-print the PR blurb or mock it (Stuart Dredge thinks that “only gas could do that kind of money”), which is a shame really; just think what you could with this much money…

T-Mobile shuts the door on Nokia's Ovi… Or did it?

By Volker

On 03/03/2008

Funny little press reports today tell us that T-Mobile “ditched” Nokia handsets that are capable of supporting the Finnish giant’s Ovi (Finnish for door) multimedia portal. The German originator of these news is slightly more cautious: they also report that T-Mobile denied this and merely point out that T-Mobile has less Nokia phones on offer than a week ago and has – quite noteworthy indeed – removed all those that were “Ovi-enabled”.

The background is of course Nokia’s move into the multimedia service area (on which I first wrote about here). Nokia scored some early successes, namely with Telefonica (see here) and Vodafone (see here) but the threat to operator-driven content offerings was clear from the start. Whilst Telefonica and Vodafone were quite content on having the Ovi portal to music, video and games offered from Nokia’s platform, on their desktop alongside their own offering, T-Mobile allegedly sees this as a threat to its own plans. It is, hence, yet another iteration of the fight of carriers for their ground in the media sector.

T-Mobile might feel strong in the media space due to its iPhone monopoly in Germany but even if (and I suspect that that is not the case), it would be a somewhat desperate attempt: if such drastic moves as locking out the market leader’s handsets are required to keep customers on its own content offerings, is it then not a clear sign that such offerings might not actually be cutting it? In particular when the competitor is an OEM that in itself does not really enjoy a particular flair of creativity and buoyancy in media terms…

I would suggest that Nokia is (only?) a noteworthy competitor because of its market share in the OEM market, and not because it is such a good media company. Constraints with a view to placement on the phone’s “desktop” as well as walled gardens and consumer fear for super-high data charges (see an absurd example here) drive people to what is there, not what is best. This is not even disrespectful to the fine folks at Nokia; it merely is to demonstrate that a lot of players are not even there yet, so that it is too early to say who is best. The desperate moves of the carriers as well as historical performance on the content side suggests, however, that carriers may not be the best suited ones. Given that content is only a fraction of their data revenues, this may not actually be a bad thing: could it not be pointing them to do what they’re really good at, i.e. operating a network. If you want to call it a pipe, fine, but just make it a very, very smart pipe, and everyone (most importantly your customers) will love you!

Motricity acquires Infospace mobile assets

By Volker

On 15/10/2007

In Deals

Now, this is a big deal: Motricity puts $135m in cash onto the table of the under-pressure Infospace people to acquire the remains of the Infospace mobile business, including search, storefronts, portals and messaging. The deal was financed by existing investors Carl Icahn and VC Advanced Equities (see reporting from MoCoNews here and here).

The acquisition marks the end of an odyssey into mobile by Inforspace, in which it first acquired and then effectively destroyed some of the brightest stars on the mobile content sky, including game developers Atlas (bought for $6m, sold for $1.5m), Elkware (bought for some $26m and then closed) and IOMO (bought for $15m, then closed in August 2007) as well as ringtone giants Moviso. They lost people, money and ultimately the businesses (e.g. IOMO’s founders have recently opened their new shop, Finblade). What a battlefield…

Motricity’s, so far predominantly a platform and storefront provider, entrant into the increasingly competitive content publishing space comes at a time where more and more players try to extend their reach on the value chain: one sees platform providers expanding into master content provider relationships, one sees publishers (e.g. Player X) seizing the same position, and all are in a quest to concentrate enough revenue and margin in order to be able to run a profitable business in an environment where still the majority of players are losing money.

The challenge for Motricity will be to grow its business outside the US, and this is arguably where the risks are hiddedn. In the US, the company claims to have now grown their distribution footprint to 11 of “top 13” North American carriers (which leave another 10 that are apparently not top), which however seems OK since they add two of the biggies which they couldn’t reach before, namely mighty Verizon and AT&T (I still prefer the name Cingular!). The gamble is arguably being mitigated by the presumed synergies through the search, portal and messaging business, and this is where I suspect the balance of risk lies in respect of the financial considerations: because it harnesses Motricity’s existing business, the venture into the publishing side of things appears somewhat less risky. All in all, a deal that might just make sense; if the money is adequate? Who could say? What proportion of growth will come through which part of the business? Hmmm. There have been deals that, on the face of it, looked more reckless in the past (remember the seemingly atrocious $145m Jamdat paid for Blue Lava [incl. $8m non-breakup fee to Tetris, LLC])? It paid off for them as then EA bought them for a rather sweet $680m. I would not suggest that the same will happen to Motricity although, looking at the monies invested into them to date, it will just about have to be the exit its investors are looking to.