The Mobile World Congress has just ended in Barcelona and the tech press is full of stories about how the internet is now headed to a pocket near you. There were big stars in Barcelona peddling the future is mobile story, from the rapper Will I Am telling of how music is going mobile, to the actor Kevin Spacey telling of how movies can work on mobile, etc. All that is fine and well, and it would be very easy to jump on a bandwagon that the internet itself is headed on a one-way street to mobiletown.
That would be a mistake. It is not the internet, the mobile internet and nothing but the internet. It is infact the internet, another mobile internet, and a far greater opportunity in mobile data, beyond the internet.
So I hear many of my random readers and fans say, Tomi: Judas! You are betraying the mantra that mobile will take over. No, I am not. I have never said that it is going to be "only mobile". I love mobile, I think it will be a massive opportunity, by far the best economic opportunity of this decade and even more so going into the next decade, but it is not the "last mass media", and it is not going to be the "only mass media" it is the "seventh mass media". I have been very clear in my public speaking and my books, that mobile will not "defeat the PC based internet" or become the only way to consume internet content.
I have used the 30 Minute/30 Second metaphor to explain why there is a clear use-case for both a PC based internet experience (30 minute tasks, such as composing this longer blog or writing a proposal to a customer of mine) which is very different from the base use case for mobile (30 second tasks, such as doing a Tweet update on Twitter or responding to an SMS text message). I had the 30 minute/30 second metaphor already in my third book 3G Marketing with Timo Kasper and Sara Melkko in 2004. So this has been part of my mantra for five years already. Not one, or the other, but both (even as I love the opportunities in mobile much more than those left on the internet)
FIRST THERE WAS THE INTERNET
Well, actually no. Before the internet, the sixth mass media channel, there were obviously five legacy mass media: print, recordings, cinema, radio and TV. But for the purposes of this blog article, lets start from the internet. So, before there were any data services on mobile, including any "mobile internet" services, there was the PC based internet. It is older and in most parts of the world, it is more familiar, and we tend to assume it is in its natural end-state and is reasonably well adjusted into the media landscape (it is not). Also, BEFORE there were mobile phones as mass market devices, we did things on the internet that might work much better on the phone.
Now, lets go quickly back in history. Before the first gramophones and first records there was pop music as a mass market offering. What? Before records? And this was before radio and TV? How could it be? Yes, before records, there was a pop music industry. If you were Beyonce or Madonna or the Rolling Stones in the 1800s, you could not sell ringing tones or MP3 downloads to iPods or CDs or records or cassette tapes or 8-tracks. You could not get airplay on radio or be on heavy rotation on MTV. But you could sell your music and make a living as a pop music musician.
Part of the business was live performing (as it is still today). But performing live is not a mass market proposition. The very first vehicle to sell popular music to the masses, was through print. Yes, through print. Music in the 1800s was sold as "sheet music". Your song was sold in a few sheets of paper with the music score on notes that was arranged for the piano. And then for the mass market consumer, if you were musically inclined, and wealthy enough to own a piano in your home, you would buy the sheet music and bring in the new hit song of the month, and learn to play it on your piano, and at the next party, your friends might ask you to play the song for them. That was how pop music was sold - and consumed by the masses before recordings (and radio).
This was very clumsy. Most did not own pianos, very expensive. Many who did, did not bother to learn the piano well enough to do this. It would take years of piano lessons to master the instrument well enough to play music on it. And the songs were expensive too (the sheet music scores). This all changed totally when the first music records were introduced with the gramophone (ie an early type of record player, a predecessor to today's CD player).
Soon music vanished from print, and was only sold through records and eventually also would be played on radio etc. This is the first case of a new media (recordings) totally cannibalizing the business opportunity of a legacy media (print). The internet now gobbling up audiences from newspapers and revenues from advertising, is nothing new..
OPTIMAL MESSAGING PLATFORM IS
Hold that thought. Now think of the PC and the internet and what used to be its biggest killer application and the world's most used internet application: email. Up to about 2006, when search passed email, for almost two decades, email was the biggest service on the internet. A communication technology. A messaging technology.
But is the PC based internet really suited for messaging? Just like you technically could do pop music on print, it is not well suited for that; and recordings and radio (and now the internet and mobile) are far better at music, and there is no point in sustaining a very lousy business out of print-based popular music.
Up to the mid 1990s, there was no better way to do messages than the internet. You could do something like that on a fax - very very clumsy. You could do something on a proprietary messaging network (dinging machines that some big offices used for example) or on a pager )ie "beeper") network (which is the roots to Blackberry for example) but the internet was far better than those, to deliver messages.
Yet the internet is not optimal for messaging. You have to be connected. You have to have an expensive PC, which more often than not, is a desktop PC, so it is very immobile, and even if a laptop, its heavy and you don't carry it everywhere. But if you do take it with you, you then need to find connectedness, a WiFi hotspot or a broadband connection etc. It is not very convenient if you want to send messages. It is even less convenient to receive on, as it is not always connected (and not permanently carried). So even if YOU are connected and can send an email (or tweet or IM instant message etc) - your counterpart is not necessarily connected at the same time.
So yes, the internet can do messaging, and is far better at it than other media and communication systems, but it is not optimal for it. The internet is a compromise in messaging.
MOBILE IS BEST AT MESSAGING
Now fast forward one decade, and we have mobile messaging from our pockets. I am not talking about the 1% of mobile phone users who have a Blackberry. I mean the 76% of the mobile phone users who are active users of SMS text messaging - 3 billion people on the planet already are active users of SMS text messaging, that is 2.5 times bigger number than the total number of email users.
So now, we have the channel which is optimised for messaging use. The phone is connected always. The phone is carried always. We can send messages absolutely anytime and from anywhere (Ryanair just announced yesterday they are rolling out messaging on their planes too) and better than that, our counterpart will also have their phone with them at all times, and it is connected at all times.
The device is optimal for messaging too. The screen is so small, our messages are truly private. Try doing private emails at Starbucks on your laptop. The keypad on the phone is optimized for messaging. You can do SMS single-handedly, and heavy users (young users) are fully capable of holding the phone out of sight, in their pocket or under the table, and still send messages. Most laptop users can't do a full email transmission without looking at the screen (meaning from opening your email client to achieving a send command to the finished message, without once looking at the screen).
We have an inherently better communication system in mobile, for messaging, than on the PC based internet. That is why the average response time for an email is 24 hours but for an SMS text message is 5 minutes. This is the single biggest technology advantage that the Obama campaign had over McCain for example in the 2008 elections. Their ability to connect and communicate - and receive immediate responses - from their team and millions of supporters, in as close to real time as is humanly relevant (5 minutes is as good as real time for normal human communications unless its something like landling a jet airplane onto the Hudson river..)
So my point is, that the internet was yes, a far better communication method for messaging than had existed prior to it. But today, mobile is far better than the internet. No wonder email growth in users is stagnant while SMS text messaging growth is exploding.
THE REAL INTERNET
So there is a lot of discussion about should we have the real internet on our phones, how to do the real internet, and I have a solution to create a real internet experience on the small screen, and so forth. Real real real. Very real. Very nonsense.
The iPhone, it offers the real internet on your phone, etc. Great. First, the real, PC based internet, has evolved with its technology and its user base. In the USA, before the first browser (Mosaic), the internet was formated for Gopher and used by mainframe computers and occasional PC access with what was called an emulator (making your PC appear like a mainframe computer interface). There were no graphics, no pictures, no videos, no hypertext links. No www.dot.com web addresses.
At that time the normal PC had a monochrome screen or very basic EGA video display, and the PC did not use a mouse for pointing. By the time the WWW came along and we then got the first browser, Mosaic, the PC population had VGA displays and had modems that ran at 9600 baud (9.6 kbps. Compare that with basic broadband which is 200 times faster). No chance of downloading MP3 files via Napster at those slow speeds and no chance whatsoever of watching any YouTube on it.
This was literally 15 years ago. So the PC based internet has evolved a lot since then. And it has evolved to suit its users and their needs and interests. Email is no longer the primary use. Now we either search (ie we "google") of go to social networking sites like Facebook and Myspace and YouTube where we spend far more time than doing our emails.
This modern internet is OPTIMIZED for large screen very high speed (high speed broadband) access, where the user has a full keyboard and mouse, and is sitting down, using it, either at home or the office, at a desk; or at a cafe somewhere on a WiFi connection and laptop.
THE INTERNET STARTS A JOURNEY TOWARDS MOBILE
So, in 1997 Nokia introduced the first Communicator, model 9000. This was the first mobile phone that could do the real internet. At painstakingly slow speeds )ues, 9.6kbs) and on a letterbox format monochrome screen that didn't display nearly everything correctly, it nonetheless was the start. (This was also the first phone to do full email, four years before RIM launched its first Blackberry emailing phone). By 1999 NTT DoCoMo of Japan launched the first mobile internet service, i-Mode.
Since then, just about every mobile operator (carrier) on the planet has launched some kind of service that could be called "a mobile internet" service, but not "the real internet on mobile". These operator services are almost all based on a reduced standard than the internet, on something called WAP (Wireless Application Protocol) and unlike the real internet, on most of these operator services, the content is closed into a "walled garden" where you cannot access any site on the internet, only those that have been accepted into that operator's portal and portfolio. There might be Google and Yahoo, but you won't have access to the Communities-Dominate.blogs.com site or the 7thmassmedia.com site.
Ever since then, a debate has ensued, about what happens to the internet. Is the internet headed to a pocket near you, or is there a real internet and the pocket variant is not the real thing, and is there a difference. and which is bigger, and should you care. etc.
And I have taken part in that debate, often vigorously. I do hold that the majority of the main services that mass market customers currently access on the legacy PC based internet, ie Google, Yahoo, Amazon, eBay, etc - will migrate to mobile. Not all use will be mobile, but the majority of use for these kinds of older and established internet brands and services, that were optimized for the internet of the previous decade; these will migrate to the mobile phone. Not exclusively so, but the majority of use will go there.
But other more recent internet services like YouTube, World of Warcraft, Facebook, Second LIfe, etc - these will primarily live on the PC based (broadband) internet, because they were designed to thrive in a broadband large screen PC environment.
The real internet is not going away any time soon. In fact, the real internet, on PCs, will continue to grow. And yes, even in the Developing World, there is an emerging middle class who aspire to own not only a good mobile phone, but also a laptop computer, and they will be increasingly connected via broadband and will add to the total internet population and traffic and revenues.
THE REAL INTERNET ON MY PHONE
The more interesting phenomenon is the iPhone users (and iPod Touch users) and their dramatic use of the "real internet on mobile" (and/or on WiFi in particular with the iPod Touch obviously).
This reveals several elements that I think we have to acknowledge. First, that there is an inherent need for most mass market customers, to have their services to be more mobile. They prefer a laptop to a desktop; and they then prefer connectivity on WiFi hotspots; and then they prefer ubiquitous connectivity via 3G and 3.5G networks everywhere (and all of this as cheap as possible of course, preferrably for free).
I am not talking about professional and very heavy users. I mean mainstream mass market consumers. They do like accessing the Weather Channel or CNN or the Playboy site, but want to do it wherever and whenever they are, not JUST on the fixed network connected desktop PC that sits on the desk at the office or the old desktop PC that sits in the spare room at home.
The iPhone usage phenomenon verifies that there is a strong need for users of the legacy PC based (broadband speed) internet, to become untethered and be truly mobile.
I want to make a further point. This need is dependent on the legacy environment to a large degree. If the domestic population is accustomed to an internet experience on a PC, and is given the chance to go mobile (on a good smartphone like the iPhone and on reasonable monthly access rates on a flat rate price plan) - they will jump at it.
However, the opposite is NOT true. If the legacy mass market internet experience is primarily on mobile phone based, and the consumer is given the chance to "upgrade" to a laptop, this is not a strong growth opportunity. Note, I did not say there is no opportunity, but that it is not a strong opportunity. Yes, there is a mild opportunity to upgrade some of those users.
We see this in for example Japan. There the default internet experience is on mobile phones, and has been for most of this decade already. All websites are formated for small screen access, of course.
The vast majority of email use in Japan is mobile phone based email (similar to a Blackberry experience). The funny thing is, if you ask a Japanese average consumer. if they would like to use email on a PC, they will look at you with mild amazement, and say that they weren't aware that you could do email also on a PC (and they may ask a follow-up, why would they want to, why would a PC based email be better than what they already have on their phone..) Makes you think, doesn't it.
Again, I want to be clear. Yes, there is an opportunity to sell new PCs and broadband connections even in Japan (one of the world's highest broadband penetration rates by the way, with 100 MBit broadband speeds as standard today). So yes, a young adult who graduates from college and gets his first job, is likely to buy a nice new laptop for his home yes.
But the point is, that if you have a fixed PC based internet experience, like in America today; and you offer them total unlimited mobility to it (iPhone 3G) with a good price package, it is a very compelling offering and an inherent advantage. But if you have a mobile phone based internet environment like in Japan today, and offer them a laptop based internet "upgrade" for many it will not seem obvious what possible benefit they could derive from it. Please do bear in mind, that two thirds of Japanese population have a 3G phone and subscription or faster, so they get "near-broadband" speeds on their phones which themselves are very advanced phones on the whole (arguably often far better than the iPhone).
Lets recap. There is a real internet, that we consume on a PC. That is certainly not the same as the "mobile internet" we have on most phones via our WAP service with our provider/operator/carrier. The real internet is becoming ever more optimized for broadband speeds and large screens. The real internet will continue to grow (and will continue to devastatingly cannibalize legacy mass media like newspapers, TV, etc)
We can do the real internet on a phone, and if the phone and service is good enough, like the iPhone 3G for web surfing, or the Blackberry for accessing our (internet) email, it can be a compelling offering.
And yes, there is a market to mobilize the legacy internet experience, from netbooks to WiFi and WiMax networks to 3G and 3.5G pricing plans with flat rates etc. Yes, its a good thing to bring mobility to the legacy internet.
MOBILE INTERNET IS BIGGER
Now lets start the fight. With all that, how about this dumb, "walled garden" and what many say is the crippled internet, on typically WAP services on our mobile phones.
First, lets be very clear. This is NOT the REAL internet. It is very legitimately called a "mobile internet". Just like the "voice telegraph" (the telephone) was not the same as the telegraph; the "picture radio" (television) was not the same as radio; so too the "mobile internet" is NOT the same as the real PC based legacy internet.
The real and unreal of it does NOT MATTER. It is only a silly argument that us technologists love to have. But the real truth depends on the perception of the end-consumer, and only the end-consumer. The absolute truth is irrelevant. Totally irrelevant. It is the PERCEPTION of the end-user.
So, if we offer Google to a consumer, on their phone. And they have used Google on their PC-based internet before, and they have a reasonably similar experience on the phone - the Google logo shows up with the funky colours, the search box is there, they type in some word, and they get search results. For that consumer, that day, on that phone, that experience was "the internet". Totally irrelevant is to us, you and me reading this blog, whether that was a real internet on HTML on IPv4 or of a crippled internet on WAP on a walled garden of an operator (or whatever else we might call it, a fake internet or Tomi's weird re-definition of the internet). Our opinnion is irrelevant. The perceptoin of the end-user is the only item that matters. For the mass market consumer, if they can Google on the phone, they are using the internet.
Not just Google. The Weather Channel is the most used mobile internet service in America, gets more hits from mobile phones than from PCs already, has done so for three years already.
Now, I'll be the first to admit that the experience on most networks, on most mainstream phones, to surf the walled garden "mobile internet" WAP services is not great. It is slow and expensive and un-satisfying and often websites appear very poorly on the phone (or not at all) and the experience is often lousy.
That is again irrelevant. Those are technical problems that are being fixed. As there are users, the owners of those mobile websits will improve the experience. As there is traffic, the mobile operators (carriers) will improve their services (and reduce prices) and the handsets keep getting better. There is nothing new with this. I remember when I worked for OCSNY, New York's first ISP, before we launched our internet services, how limited and clumsy the internet experience was before Mosaic, when we had to do FTP file transfers on the internet and IRQ based chat discussions and our company actually installed early internet email gateways. It was not normal for email systems in the early 1990s to connect to the internet..
The technology will fix itself over time. Don't focus on that. Focus on the end-user. What does the user say. Did they experience Yahoo on the phone? If they did, they will say they used the internet, it is irrelevant to the market, if that was in reality a "lesser internet" or the "real internet". It was to that consumer, accessing Yahoo on the phone, which they consider using the internet. The case is closed.
Now we do get very interesting findings. How many people do this today? How many access WAP services (or i-Mode or other phone based internet services) globally? As regular readers of our blog know, my company has been tracking this number since it was first reported. That number grew past the total PC based usage of the internet for the first time, last year, 2008, and as of January 2009, there are 1.05 billion "mobile internet" users and only 1.00 billion PC based internet users. Many users in the more developed parts of the world obviously have access to both, so the total user count is 1.4 billion (all data source; Tomi Ahonen Almanac 2009).
Again, please understand, they are not the same. The real internet is different from the mobile internet. But, globally today, more people will access mainstream internet SERVICES like Google, Yahoo, Facebook, Twitter, eBay, Flickr, etc, on a phone than access the same branded services, Google, Yahoo, Facebook, Twitter, eBay, Flickr etc on a PC. The cross-over point in time was last year and there is no going back. The gap will grow from now on. Soon all countries will format their website content primarily for the small screens (like they do in Japan) and offer the big screen internet experience as an option.
(Wake up call...) Do you have a mobile internet strategy already? Do you own a .mobi site and domain? Do you have mobile-optimized variant to your website? Have you looked at advanced ways to access the mobile internet, that are better than the best on the legacy internet, like 2D barcodes (QR codes)... (we now return to your regularly scheduled programming)
NOT BETTER, DIFFERENT
There are many services that already work on both and do it very well, such as Twitter for example, or Flirtomatic or Cyworld or Google. Each has been designed to give the user a familiar experience on both platforms, to seamlessly experience the service but the actual service has been fine-tuned to the access method.
But this is not the norm. I want to make the point, that mobile as the 7th mass media channel, is as different from the internet, as TV is from radio. They are NOT the same. If you ask which is better, there is no honest answer to that. You could ask, which is better, a train or a ship. They are designed to do different things in different environments and mostly do not overlap. If you have to cross an ocean, don't buy a train. If you need to travel inland, don't launch a ship. In the legacy media world, which is better, a newspaper or radio? They both deliver news, yet work in very different ways. Radio gives better breaking news, newspapers deliver deeper analysis. They are different.
Mobile is not the dumb, crippled little internet. It is a new mass media channel, as different from the internet, as TV was from radio. And please consider that. When TV launched, it stole every existing idea from radio. Some of it worked so much better on TV that it was fully cannibalized (radio dramas, soap operas for example) but other content thrives on radio even as TV does it arguably better, such as news. And after TV launched, radio invented new formats like the drive-time talk show, to cater to audiences (commuters) who are not served by TV (yet).
While TV stole every idea from radio (news, sports, music, drama, you name it) and cannibalized fully some of it; TV did not build its success on these. TV's success came out of NEW concepts, that capture the unique benefits of TV. Now we get reality TV, American Idol, the night chat shows and MTV music videos, the kind of programming that didn't work on radio. Here are TV's native formats and concepts, that cannot be ported back to radio.
That is what we need for the mobile internet. Mobile is as different from the internet as TV is from radio. We will have every conceivable internet concept launched also to mobile, and most of it will find a suitable market also on mobile - BUT - a far greater opportunity lies in those services that capitalize on the unique benefits of mobile. The stuff you can't do on the internet.
WHAT YOU CAN'T DO ON THE LEGACY INTERNET
Like the ringing tone. Don't laugh. You think the Apple iPod and its iTunes is a great innovation in music? Actually mobile phone ringing tones are worth 5 billion dollars worldwide in revenues, 2.5 times more than all iTunes sales globally. You can sell MP3 tracks on the internet, and yes, you can sell MP3 tracks to mobile; but you cannot sell ringing tones (as a commercially viable proposition) to have on your PC based internet (ie for your laptop) or for your iPod. There is no market for a ringing tone on those devices.
That is just one service. Five BILLION dollars. Can't do it on the legacy PC based internet. Not viable. But delivers - get this - 19% of the total global music industry revenues. Thats JUST basic ringing tones. There are far more advanced forms of music exclusive to mobile phones that you cant' do on the internet, like so-called ringback tones, welcoming tunes, background songs etc. Another 5 billion dollars of other mobile music services already launched around the world.
This is what I am talking about. On mobile, as it is the newest mass media channel, and as it is a very different and distinct environment, with seven - count them seven - unique benefits you can't replicate on the legacy PC based internet - mobile will grow to be the far bigger internet. We will start to think of the mobile internet as the "real internet" and think of the PC based internet as the "professional internet" or something like that, the "hard-core gaming internet" or something like that.
BEYOND THE MOBILE INTERNET
The real opportunity lies not in copying the legacy internet (which will give plenty of opportunities obviously for any internet brands) but in creating the new, the innovative, the magical. Shazam for example, the music recognition service that only works on mobile phones. They have 35 milion paying customers in 60 countries who give them a million paid interactions every day. Wow. I've estimated they earn 100 million dollars per year. Out of 35 million customers, not using advertising ! (which they also have, but its a tiny part of their revenues)
Online, Facebook has 100 million customers and earn only twice that, by spamming customers with unwanted ads. But on mobile, Shazam has 35 million loyal returning customers who give them 1 million paid hits per day. THIS is the power of the mobile as the 7th mass media channel. Discover its unique strengths and build services for it.
(oh, for those who want to know what are the 7 unique benefits of the seventh mass medium, I'm not boring our regular readers with the repetition, please hop over to this older blog that discusses them in detail - Deeper insights into 7th mass media channel)
BEYOND THE INTERNET MOBILE
Lets ignore the "internet" label. Lets think a bit more broadly, about premium data services. This is like train operators in the 1950s, if they understood they were in the travel business, not the railroads business, they might have done better against jet airplanes. Lets look beyond the internet label. The internet enables us to have data services on our PC, but we also can have data services on our mobile phone.
If we say any data services on a phone, then SMS gives us the world champion. At 3 billion active users, this is the most widely used data service on the planet, obviously, with over twice the number of total users of the internet. But lets ignore SMS texting, and look at "premium data" Any other data service on a mobile phone, that is not person-to-person text messaging.
In other words, any bearer that can deliver some kind of service, content, advertising, revenue, etc. Premium data.
Obviously all real internet access by a mobile phone is premium data. Obviously also, all WAP and "mobile internet" use on a phone is also premium data. But what else is that? A couple of very telling categories. First, Premium SMS. Sending a text message that has a premium price to it. For example, voting on American Idol via SMS. This is a legitimate mobile data service category. It is certainly a new "internet-like" experience, sending a vote using your phone, to a TV show. It is not "browsing" or "surfing" like we would do on the PC based internet, but neither is sending an email on the internet "browsing" or "surfing". Nor is placing a Skype call on the internet "browsing" or "surfing". And sending a vote to a TV show with premium SMS is quite akin to sending an email. Not the same, obviously but similar.
Except that every premium SMS message is charged. That is one of the true powers of mobile that trumps the PC based legacy internet. This aspect is a far more legitimate economic argument and distinction. The mobile data environment is the "rich internet" or perhaps better called the "money internet" while the legacy PC based internet is the "poor internet" or better perhaps the "beggar internet" desperately seeking some advertising dollars to cover its costs.
Not mobile. Every phone can handle payments, big and small. From paying for parking in Estonia to receiving your whole salary paycheck in South Africa. Mobile data as an opportunity is INHERENTLY BIGGER than the PC based data opportunity. It reaches more people, it reaches more devices, and it and only it, can handle payments for every user. On the PC based internet you have to sign up to Paypal or give a credit card. That is not necessary on mobile phones. In Kenya today, one in five bank accounts has migrated to mobile phone banking services (strictly speaking these are not called bank accounts, for local banking regulation reasons, but do allow users to deposit, withdraw and transfer money from one user to another, just like a bank). Half of South Koreans and Japanese pay using their mobile phones. In South Korea if you sign up to a credit card, they won't even send you the old-fashioned plastic card, unless you request it. The credit function is by default enabled onto your phone, and plastic is only needed if you travel to countries with less able payment systems.
Then there is MMS, the Multimedia Messaging Service. Commonly called picture messging. Last year the total global user base of MMS grew past the total user base of email, relegating email to being now the third most commonly used messaging platform, behind SMS and now behind also MMS (but still ahead of IM Instant messaging, the fourth biggest category). MMS has 1.4 billion active users today (sources again: Tomi Ahonen Almanac 2009).
MMS is a very rich multimedia platform for mobile phones, to deliver not only pictures, but sounds and video clips. As two thirds of the phone owners on the planet (68%) today have a phone and network connection that can receive MMS messages, yes, thats 2.3 billion phones on the planet, 1.5 times more than all TV sets in use - this is now the hottest media platform for anyone from the most innovative mobile trendsetters like UK based Blyk; to total non-telecoms industries like the automobile business, as we reported here of BMW's breathtakingly successful campaign to sell winter tyrers in Germany, using MMS.
There is much more to premium data, but the point is, that rather than argue about are we now deploying the "real internet" or a somehow reduced internet to phones, and whether more or less of internet users will like that and perhaps shift their usage; a FAR greater opportunity lies just beyond, with premium data services for mobile.
HOW MANY USE PREMIUM DATA ON A PHONE?
Let me give you some numbers to illlustrate. Premium data services on mobile phones are used already today by 1.7 billion people. This is not basic SMS text messaging. This is premium data, from consuming news on your phone (1.5 times more people pay to receive news on a phone, across the planet, than buy a daily newspaper) to uploading videos to CNN's I-Report (they have received over 100,000 submissions of citizen reporter content). From sending virtual flowers as a gift (3.5 milion virtual red roses sold by Flirtomatic in one year to its user base of 100,000 back in 2007 when they earned 1.2 million dollars of bonus revenues out of this virtual gift) to joining the multiplayer online nattling advergame by Tohato snacks in Japan as hundreds of thousands did.
The premium data opportunity on mobile is a far bigger audience, and far far more lucrative business opportunity than any legacy PC based internet content business. Let me explain this. The total value of paid content on the PC based internet is roughly 35 - 40 billion dollars for 2008 (was 71 Billion for mobile content). I don't have very recent exact numbers so please allow the approximation. But of that internet content industry revenues, the two biggest categories are adult entertainment and gambling.
Now consider the premium data mobile content industry. It too has adult entertainment and gabling, of course (every mass media has adult entertainment, it is usually the first monetized content type for any new media format from playing cards to VHS tapes to yes MMS messages). But on mobile the two biggest categories are music and videogaming. Adult entertainment comes in at 6th largest and gambling at 9th largest content revenue category. Even though mobile is far younger as a mass medium than the internet, mobile is already far more mature. It no longer sustains its revenues only by the adult industry...
The total mobile premium content industry is worth 71 billion dollars and the mobile messaging industry adds another 130 billion, giving the total moblie phone based data services industry a size of 200 billion dollars for 2008. Now, consider the internet. Even as we add not only all content revenues, and all advertising revenues on the internet, but also the access revenues for broadband and dial-up narrowband internet access, the overall size of the internet business is about.. 200 billion dollars. In half the time, mobile has grown to same size.
Mobile is the bigger internet. Mobile is the stronger internet. Mobile is the money internet. Mobile is the faster-growing internet.
The real internet will not die. It will still continue to grow. But just like radio had to adjust after TV came along, now too, the legacy PC based poor internet (or the free internet, the advertising internet, like the free daily newspapers in many cities) will have to adjust. Some services like messaging, work inherently better on mobile, and will migrate rapidly there. Other services, like Twitter, work well on both. New services will emerge for both mass media that better suit their own opportunities.
But make no mistake about it. There is no point in attempting to optimise a real internet experience on a mobile phone. The real internet is best experienced on a real PC, 30 minute tasks and all. The mobile internet is designed for optimal experience on the phone. It is already bigger for content providers than the legacy intenet. But the big opportunities come from deploying services and content that is unique to mobile, using its power. Services behond the mobile "internet" and services which are simply premium mobile services. Like ringing tones, like Shazam, like voiting for American idol, like paying with your phone, like ringback tones, like SMS text messaging in fact.
TO SUM UP
This is a long posting (again) and makes many points, some major, some minor. Let me now condense it to the main points. One, there is a legacy PC based internet, the so-called real internet. It is thriving and growing. There are big opportunities in it, and the intenet will continue to cannibalize (and terrorize) the legacy five mass media.
It is possible to deploy the real internet to phones. Some phones and services do this better than others. It is interesting to some users and will be a growth opportunity, but it will not take over from the natural home of hte legacy intenet, which is best suited for PC and laptop use.
There is a mobile internet, which delivers branded internet services like Google, Yahoo, Facebook, Twitter, eBay and YouTube on the phone. The mobile internet is fundamentally a different internet from the real internet, in that at the very least, the website and service is optimized for phone access. It may have many other differences, some good, some bad. But since 2008, more people on the planet already consumed legitimate internet brands, through this limited mobile internet offering, than used a PC based internet to access those services.
The big opportunity is not to do the real internet on mobile.The big opportunity is not even to do a mobile-dedicated variant of an internet service. Yes, there will be plenty of successes in this area, but like TV and radio, the real opportunities for mobile premium data services, come out of unique ideas that capitalize on the seven unique benefits of mobile. The premium data opportunity in mobile is the true internet eldorado, where the real money will be made. Look to this chance more than the first three.
AS ALWAYS, THERE IS STILL MORE FOR YOU
Now, for those who like the story, but would like a shorter "facts only" version of the stats and various definitions, of how many users was it with MMS and how many are premium data users and how many are mobile internet users, etc.. and perhaps need to share the thoughts with a colleague who won't have the time to read all the above, I have a nice new gift for our readers. My latest Thought Piece (a 2 page intense white paper filled with facts and numbers; any buy exec can take the time to read 2 pages) is about the Mobile Internet. I'll be happy to send the Thought Piece Mobile Internet to you if you send me an email to tomi (at) tomiahonen (dot) com.
Anyone who wants to quote from this blog, feel free to do so. All the data source is Tomi Ahonen Almanac 2009. I'll be very happy if you link also to this story.
For those who have a professional need to have these numbers and more at their fingertips, I also have my 171 page Tomi Ahonen Almanac 2009 with the very latest data on the industry including 70 tables, graphs and charts, which is being very warmly received by leading industry thiners from Smart Mobs to MobHappy to WAP Review etc. The Almanac is in eBook format, fits your smartphone so you can have all your facts literallly in your pocket. You can sample free pages and several of the charts at this link: Tomi Ahonen Almanac 2009.
Tomi,
Very thought provoking. I have always seen the "Internet" as the "Internet", not one on mobile and one on the P.C., but ONE Internet. The vehicle that carried the "Internet", whether that be desktop, laptop, N96, iPhone, Blackberry, etc. would have limitations based on its specifications.
Similar to a vehicle. Trucks are good for transporting materials, vans are good for transporting more then one person, BMWs very good at going very fast, etc. Therefore, the vehicle you choose to access the "Internet" defines your browsing experience just as the vehicle you choose to travel in defines your comfort and experience while on the road... We make choices on our devices and vehicles. These dictate our experience.
As for the Blackberry, the current figures show us that RIM has just sold their 50 millionth device. Of those devices, 21 million are currently in use with active subscribers...
Regards,
Giff
Posted by: Giff Gfroerer, i2SMS | February 24, 2009 at 05:54 PM
I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.
Sarah
http://www.craigslistdecoded.info
Posted by: Sarah | February 26, 2009 at 02:25 PM
Hi Giff and Sarah
Thank you for the comments. I'll respond to both individually
Giff - very good and we agree a lot on this. I like the analogy of cars and roads and often use that. But yes, with the internet, it is a difficult to really find a good analogy, as the internet is so many things it is not only a network to reach audiences, it is also a delivery channel to offer fulfillment of digital content, and it is a communication channel, etc. Its like a multi-purpose "roadway" that is simultaneously a highway, a railroad and an airport runway, perhaps... A difficult technology to really accurately pidgeon-hole into an analogy ha-ha..
There are further issues then comparing the internet to mobile, where we don't know users on the internet, but we do know every mobile phone subscriber at least by their phone number, always uniquely and accurately. And we can handle payments on mobile to every user (can't do that even via Paypal on the internet)
Sarah - thank you for the kind sentiments
Thank you both for writing
Tomi Ahonen :-)
Posted by: Tomi T Ahonen | March 02, 2009 at 09:22 AM