CTIA IT 2009 Scorecard: Mobile content

Whose profile is rising? Applications. Forget full-track downloads, ringtones and other traditional mobile content formats--richer, more interactive applications are instead capturing the attention of consumers and content providers alike. "Connectivity has never been higher. Fan engagement has never been higher. Now, how do we capitalize on that?" asked TicketMaster VP of marketing and music, Adam Flick, during a Mobile Entertainment Live! conference panel last week. The sense among music industry execs is that content discovery and recommendation applications represent the next evolution of the mobile media paradigm, and existing apps are insufficient to meet the challenges at hand, contended Kevin Arnold, CEO of indie music distribution, marketing and technology provider IODA. "Playlist sharing is not it," Arnold said. "From a technology standpoint, we're still riding in the back of the short bus."

Ted Mico, EVP of digital with Interscope Records, touted the promise of artist-specific mobile applications, singling out his label's partnership with digital media platform Kyte, a deal that yielded a series of iPhone and iPod touch applications featuring artist-produced video content, custom branding, mobile advertising, m-commerce links for purchasing content and merchandise, an RSS reader for artist news alerts and interactive user engagement features including fan chats, content sharing and concert comments and ratings. "[Dance-music superstar] Lady Gaga fed her audience a steady stream of content, and worked hard to make that audience loyal," Mico said. "Artists need to supply their fans immediacy and relevance. With Kyte, Lady Gaga was constantly filming in real time." However, Mico said mobile applications are just one answer to the record industry's malaise, not the only answer. "There's no silver bullet," Mico said. "Apps are one of many solutions. But they've already proved to be a viable force."

Applications also portend additional revenue opportunities for content providers. During a CTIA Wireless IT & Entertainment 2009 educational session titled "App Trends: App Developer Perspective," moderator Tim Chang, principal with Norwest Venture Partners, cited in-app micro-transactional purchases (like those enabled via Apple's iPhone OS 3.0 [1]) as the subject of growing enthusiasm among the Silicon Valley elite. Sony Pictures Home Entertainment, which outlined its forthcoming mobile game slate at CTIA IT [2], said a new refresh of its popular Wheel of Fortune title will herald its first plunge into micro-transactions. "That's very much an opportunity we're excited about," said SPHE vice president of worldwide entertainment, Kara Bilkiss, in an interview. "We're totally committed to giving mobile consumers access to more content."

Whose profile is falling? Entertainment. Conventional mobile content and the passive consumer experience inherent in its makeup continue to wane as publishers and consumers focus their attention on a more interactive and immersive user experience. Despite the conference's name, CTIA Wireless IT & Entertainment 2009 focused little of its attention on entertainment content, instead installing a renewed emphasis on the enterprise segment: "This is what [the event] was originally designed to do--drive wireless into the enterprise," CTIA Vice President of Operations Rob Mesirow told FierceWireless [3] in a pre-show interview. A Mobile Media & Content-themed educational track addressed subjects including mobile TV and social networking, but session titles like "Mobile Music: A Familiar Tune?" and "Mobile Advertising: Failure to Launch?" underlined the grave doubts looming over the segment.

[4]Ringtones, once the biggest revenue-generator of the mobile content vertical, are now little more than an afterthought. Ringtone sales in the U.S. declined from $714 million in 2007 to $541 million in 2008--a 24 percent year-over-year drop--according to research firm SNL Kagan [4], which says the annual decline is the first ever posted for a U.S. mobile content category. In all, ringtones' share of total U.S. mobile music revenues fell from 80 percent in 2005 to 63 percent in 2008. SNL Kagan credits the slump to consumers learning to create their own ringtones by side-loading edited MP3 clips to their phones and in turn bypassing operators' direct sales channels. "We're in the middle of a generational shift in terms of how consumers purchase content," said Robb McDaniels, CEO of digital media distribution firm INgrooves, during a Mobile Entertainment Live! conference panel last week. "It's pretty bad right now." So bad, in fact, that McDaniels cracked the panel, titled "View from the Top," should be retitled "View from the Bottom" to more accurately reflect the current state of the music business.

[5]Artists are also turning to more ambitious digital efforts than straight-forward content downloads and purchases. "People are only interested in your art as long as you keep engaging them," Fall Out Boy lyricist/bassist Pete Wentz [6] said during a Mobile Entertainment Live keynote Q&A. Marketing "is an art," Wentz said, outlining the evolution of the emo hitmakers' "Citizens for Our Betterment" viral campaign, which touted the upcoming release of the band's fifth album Folie à Deux via fake hacking of Wentz's Decaydence Records website. "The idea was to get people confused and worked up," he explained. Wentz expressed regret that the music industry did not more quickly come to terms with the Web. "The industry made some poor decisions by treating [the Web] as an issue where you sic lawyers on it," he said. "If we had embraced the possibilities, we'd be in a much different situation now."