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The Race to Zero

I picked up one of the most beautfully coined terms about the mobile content industry by Fred (whose last name will remain anonymous to protect the innocent), a long time industry veteran.  “The race to zero” describes a downward trend in premium mobile content.  He was pointing out the following situation happening:

* Mobile operators are in their quest for more revenues introducing two things:  display ads/ad networks on mobile and search functionality

* Mobile ads are quite nascent, though working well, but naturally given the mobile content industry’s knowledge and proximity to mobile advertising, a large majority of the ad buyers are providers of mobile content.

Combine the two trends, and you have the bizarre situation that you for instance on any given mobile operator deck can search for free games directly from the games portal, and be served ads from companies offering just that. He even cited an example that on a sign up page on the mobile carrier deck (i.e. the page where you agree to pay $X/month for the service) for their social community service, you will quite often see an ad for free chat.  So what do you think the consumers will do?

zilch-logoQuite obvious really. Give people all the tools to find free stuff, and have the majority of advertisers be the ones providing free stuff for the content you are currently browsing the paid versions of, then what happens to the paid stuff?  Chetan Sharma confirms this in his annual report on the US market, as downloads are trending down. Well, I am not surprised.  The mobile content idustry has had dysfunctional business models since it started, and it is seemingly not getting better – except for a general trend towards a 70/30 split on apps which is certainly a good trend started by Apple…

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Denied!

I have to wonder if this a sign of economic times or what. But the promotional model I used to promote a Storyz competition at AdTech in Sydney was just kicked out! They said since we were not exhibiting we were not allowed to have people selling the company. Nicely done AdTech. What the hell is conference attendance and networking about anyway?? And they are supposed to represent marketing and advertising as an industry?

Granted their T&Cs says they reserve the right to LIMIT the number of participants from non-exhibitors who are deemed to be selling rather than buying, but that does not mean the limit is 0. Given that I called the sales director a week in advance to clarify I was bringing a promotional staff, the whole situation is nothing but a joke. I will make sure to warn any attendee that I meet that they’d better not be selling to me, or they just may get kicked out.

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Misguided Microsoft

As news is pouring in from GSMA, I really reacted on this quote from Microsoft of the success of Apple as quoted by Moconews in an interview:

Apple’s success with the iPhone: Why has Apple been able to move the market so rapidly and Microsoft hasn’t? Lees: “What Apple was able to do was integrate hardware and software very closely. It benefited from having the first-mover advantage. Our fundamental strategy and our choice is to drive innovation by having different form factors vs. having one phone out at the same time. This approach takes slightly longer to move an industry. You saw it in the early days of the PC, too. The same thing happened where Apple had 35 percent share of all the PCs sold, but they weren’t able to compete over the long-term.”

Are you kidding me?  First mover advantage?  What has Apple possibly done that could not have been done by Microsoft 10 years ago? Nice admittance of sitting on your ….. for so long and blaming Apple’s success on your short comings. The term falling asleep at the wheel is probably more appropriate. Too bad as well, because I personally think Windows Mobile is the best OS around – at least from a business user’s perspective.

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