As web content migrates to mobile internet

This article is another installment in my thinking on what happens when the internet migrates to mobile phones. It is an ongoing megatrend - there are three times as many mobile phones as PCs. All mobile phones have at least basic messaging and the basic WAP browser. In three countries - Japan, South Korea and China, the transition has already happened, that the majority of web access now comes from mobile phones, not PCs. Japan was first to witness this, and now while mobile phone sales keep increasing, for the first year, Japanese PC sales started to decline last year. More countries will see this transition point during 2007. But it is not enough to consider "more users" - as we have to consider also the usage (and the money). So lets examine what happens when web content migrates to the mobile internet.

I've just been to two conferences looking at the future of mobile data services. I chaired at both, in  Tokyo at the 3G Evolution conference last week, and now in London at the 3G-4G LTE conference. I've thus met many of the leading thinkers in this space and exchanged thoughts about what is likely to happen as we move from a mobile world which is voice-centric into one which is data-centric. Regular readers of our blog know that I occasionally build on these themes such as the postings What Happens When the Majority Access the Web via Mobile Phone, and Making Sense of the Biggest Data Application on the Planet: SMS Text Messaging.

How much of that "internet" experience can we recognize in that future. The current, PC based fixed internet will become the legacy internet. The immobile internet. The access-limited internet. Lets start by examining a recent historical comparison.

Learn from Cinema to TV

In the 1930s our only multimedia mass media was cinema. In the cinema we could go and watch films, or serials, or news reels. Films are what we'd think of hollywood movies today. Serials were a weekly continuing series of continuing storyline films, usually shorter than the films. These were the 1930s equivalent of our Sopranos, Desperate Housewives and the Shield. The story did not end and we had to come back next week to see how it continued and so on. News reels were weekly collections of news films from around the world, similar to our TV nightly news.

Fast forward 20 years. In the 1950s TV started to enter in our homes. Even though the TV screen was a tiny fraction of the size of the movie screen, all of the content formats of the cinema soon appeared on TV. All of it worked there, on the "small screen". And lo and behold, the serial found a natural home on TV, and migrated permanently. We now watch the continuing storyline shows on TV, not in the cinema. And news reels, they transformed from the weekly collections to the nightly news. Films (Hollywood) continued on the silver screen but "all" movies also are shown on TV (if for broadcast regulation reasons not on live TV for being too violent or X-rated, they are all available for TV viewing at least on premium cable or via DVD).

Lesson 1. TV did not kill cinema. But TV did totally cannibalize two of the three major content formats from cinema (serials and newsreels). And the remaining content format, films, continue to generate viewers and revenues on cinema, but they co-exist (in often a slightly modified format, such as transferring widescreen cinema formats into the 4:3 TV screen format) on both.

Lesson 2. TV introduced new opportunities do deliver multimedia content, which was not feasible on cinema. After TV launched, whole new formats were invented. Game shows, talk shows, music videos and reality TV. These are all formats that do not work in the cinema. But they are now native to TV. So our second lesson. The new media gives us new opportunities BEYOND the previous media, to innovate and create services that were not even possible before.

Then previous total transformation of the internet

Ok, now consider the internet. It was not born on PCs. The original internet was a network of mainframe computers. Only in the 1980s when PCs started to gain modems, did some connect to the internet. The mass market internet did not take off until the the WWW browser (Mosaic and Netscape) came along and Time and Newsweek put the Internet on their covers in 1994. So if you think the PC-centric internet is the "natural way of how it should be" - you are totally mistaken. The current internet is an evolution past the original internet. Note we had e-mail on the original internet, and IRC chat, and file uploads and downloads via FTP, and a file management/discovery hierarcy around something we called Gopher. So this massive one-billion user internet is actually only a 12 year old phenomenon, and it is that which cannibalized the original internet. If this came suddenly and cannibalized its predecessor, why could it not be that another more compelling internet rival cannot come and cannibalize this?

Web today

Good. Now lets consider web use today. The biggest use of the internet is e-mail, and the second biggest use is search. We have lots of other uses for the web, such as buying songs on iTunes, playing multiplayer games in World of Warcraft, buying and selling second hand in eBay, etc.

Five years ago, the screens on the top-end mobile phones were so small and grainy, that it was near impossible to understand traditional web pages on them. Most WAP phones had monochrome (black and white) screens. It makes a lot of sense, that while it was possible to access some web content (or at least WAP content) on those phones, few people could really enjoy doing that. Today mid range phones have screens that show about a quarter of a standard PC screen with about the same pixel resolution. It is not as convenient to view a web page on such a phone - but it is getting to be bearable. If for example your laptop falls and breaks down during the weekend. And you desperately have to get to your e-mail, and you can access it via the web - you could well do it via the phone, even if that is cumbersome. It is no longer unbearable.

Fast forward about a year. This summer we will see the launch of the iPhone. Apple's new smartphone has a screen almost double that of modern smartphones. And Apple promises us their phone will be an excellent web surfing device.

I don't suggest it is "as good as" a modern laptop with its full keyboard, mouse, and large screen. But now with the iPhone - and then the next responses from the Nokias, Motorolas, SonyEricssons etc - will bring the mobile phone to acceptable level of web browsing - of the current lecacy internet content.

If we - adults today in 2007 - want to consume "web content" as we have grown to know it over the past ten years or so, very soon a mobile phone can do a passable if not perfect replication of that experience.

Then remember cinema to TV. Some of the content suffers in the transfer (cinema from wide screen, to 4:3 screen size, some actors have half of their face missing etc). Inspite of it, EVERY movie ever made, managed the transition to a TV version. So consider some of our favourite pages, it is quite possible that very soon mobile phones will deliver an acceptable - while not quite as good - experience to display that web content for us.

Search and mobile

But then consider the transition. New reels from being a weekly show, transformed on TV to a daily (nightly) show. Now imagine when the majority of web access comes from mobile phones. Is it likely that the content owners will readjust their content, reformat it, to the mobile internet screen. Of course they will. Then think of our most used apps. e-mail and search? Do we need a 1024 x 768 screen to view the search findings or the headlines of our inbox? For many of the applications that we currently use on the web, it really does not dramatically change the experience, as long as the content is formatted from the start to the small screen. So, rather than seeing 10 search results, we only see 4. So we have to scroll down more times to get to search result 23. Fine, but search will actually work quite acceptably on the phone. I'd say search will work like movies - it won't migrate completely from the PC based legacy internet, and it may be a bit less convenient on the phone. But just like TV:s which are in many more locations than cinema screens, our search will be in our pocket, always with us, thus in many more locations than search on the PC based legacy internet.

e-mail and mobile

Then consider the other big application currently on the internet: e-mail and thus person-to-person messaging. Here we have a legacy messaging system which is cumbersome, tedious and slow - e-mail. On the mobile phone we can have e-mail (such as on a Blackberry). Many smartphones from the Treos to the Nokia E-Series do e-mail. So again, while it won't kill e-mail, the mobile internet can readily replicate the e-mail experience. And if you've ever seen the addiction of a Blackberry user (who call it the Crackberry for crack cocaine the drug) - then they DEFINITELY prefer e-mail on their smartphone than on a PC.

But the mobile phone has its own messaging platform, SMS text messaging. This is now the first of the new applications, like talk shows, game shows, music videos and reality TV were to cinema. Something that does not work in the old format, but is very compelling on the new. We ALREADY have a bigger service - by users and by revenues - than anything on the fixed internet. There are 1.1 billion people who use the internet, but out of 2.7 billion mobile phone users, 1.8 billion people use SMS text messaging. We have our first new web content category, which has only emerged on the mobile internet, and cannot even be replicated on the traditional internet (yes yes I know we can do it, but practically, it is very rare to find people using SMS on a PC. If not e-mail, on the PC they then tend to use IM Instant Messaging, not SMS text messaging)

Music and mobile

Remember iTunes? So yes, we can buy music - MP3 songs - on the current lecacy internet. We already can buy MP3 songs directly to mobile phones. The IFPI (International Federation of Phonographic Industry, the global umbrella organization for the music industry) - just released its music report in January and found that half of all digital music in 2006 was sold directly to mobile phones. So yes, we can consume the "identical" or very similar experience of MP3 song purchases and downloads on the legacy internet and the mobile internet.

But again, the mobile internet has already innovated in this music area. Ringing tones. They are worth over 6.5 billion dollars (already over six times larger than the size of digital music downloads such as iTunes). Please don't turn snobbish at me now, and claim ringing tones are not real music. Fifteen years ago when the internet came, a lot of old fogies suggested e-mail was not legitimate communincation because it did not transmit on paper and could not have a signature. All kinds of music innovations have been dismissed by older generations as "not being real music" such as rock n' roll which was supposedly not music, and rap which many said was not music, and the recent innovation of sampling and mashing existing music, etc. Ask the person forking over the money. If that teenager spends two dollars to put Shakira's music on the cellphone, who cares if it is of lousy sound quality, and extremely short duration. It is music.

And ringing tones were a content format invented for the mobile internet, not the legacy PC based internet. We have another of our new service categories, optimized for the mobile internet.

Social networking and mobile

Then look at MySpace, the massively successful social networking site online. With 90 million active users. 19% of Americans maintain a profile on MySpace. But look at Cyworld in South Korea. It offers similar profiles like MySpace (and much much more) - but offers access not only by broadband (South Korea is the world's most connected society, with highest penetration of broadband) but also access via 3G mobile phone (South Korea has highest penetration of 3G phones). On Cyworld today, 43% of all South Koreans maintain a personal profile. Can web content migrate to the mobile internet and if optimised, become a BIGGER success there? Of course it can.

YouTube? The massively successful video sharing site with 120 million users worldwide. Cyworld's 22 million 3G cameraphone users upload more videos daily than YouTube's users. The mobile internet is inherently superior, because we have the content creation device (cameraphone/videophone) in our hand - and in our pocket - all the time. AND it has permanent connectivity at high speed.

Oh, and let me show how the mobile internet is already influencing the fixed internet. We've written about SeeMeTV here at our blogsite. The 3G mobile video sharing service, where every time when someone looks at your video, YOU get paid a royalty. A radical innovation in user-generated content. Invented on mobile. Now consider yesterday's announcement by YouTube that they will start to pay the content producers of the most-viewed videos. This concept was invented on the advanced internet, the mobile internet, and now copied onto the legacy internet.

Voting and mobile

The mobile internet has also the built-in payment mechanism. We can charge for every link, every message, every web page. One of the uses, is to pay for TV voting. This is something you cannot do on the legacy internet. But it is inherent to the mobile internet. Think about it. Imagine trying to make money in a country where they don't have money. The system has no money. What do you do? It would be very tedious and slow to try to figure out how can you exchange something of value with someone else, to do business. But the mobile internet was built with a payment system to it from day 1. Thus we have for example the voting on reality TV shows, like Big Brother, American Idol, the Apprentice and Survivor Island. How big? 1.2 Billion dollars in 2005 and probably near double that in 2006 (I don't have that data yet).

Now please don't think that a vote for American Idol is "not real web content". Of course it is. You go to Amazon and you see the votes there. How many stars for this book, is it a good movie or a bad movie, do you "Digg It" or not, etc. Voting is an inherent part of participation on the web. We have it also on the mobile internet. The beauty of it, on mobile, is that we can CHARGE for it.

Old Fogies can't accept it

So what do I think? I think that all content on the legacy internet will appear also on the mobile internet. Some of it will be cumbersome. Others will transition quite easily to the mobile phone. As the majority of users migrate to mobile, all content owners will reformat their content for mobile. Some content will coexist in an equivalent experience (iTunes vs MP3 direct sales to musicphones). Other content will be new that appears only on the mobile internet (like ringing tones). Some applications will transform and eventually disappear (e-mail which young people almost refuse to use, and prefer either SMS or IM)

Some will say this is a preposterous view. They will probably say - thinking of themselves, old fogies that they are - that the internet is inherently better on a big screen. If that is so, then the Playstation Portable could not have succeeded. Going from a TV size screen to a pocket size screen. No, screen size is a red herring.

Or they say we need a full keyboard and a mouse. Again, old timers talking. Look at teenagers today - the heavy users of the mobile internet. Their first OWN communciation device was their mobile phone. They can send text messages without looking at the phone, with the phone in their pocket or under the table. 48% of teenagers admit to sending text messages while they talk to someone. 10% of British teenagers send 100 text messages PER DAY. In South Korea it is already one third of teenagers who achieve that message throughput. If you can type blind, and send 100 texts a day, you will never complain that a phone keypad is inconvenient ! On the contrary, these kids will probably write school essays faster on a phone keypad than a 101 key PC keyboard. In fact they'd probably drive a car better if it had a Playstation gaming pad rather than a traditional steering wheel, and accelerator and break pedals..

Teenagers find this the natural way of things

You reading this blog are like Alan and me. We are digital immigrants. The teenagers are the digital natives. Don't project your personal bias to this equation. Examine the behaviour of your teenager kids (or nephews and nieces if not your own kids) and consider - do THEY already feel addiction to the mobile phone. Do they already download ringing tones and play videogames on their mobile phones. Are they the generation that will PREFER to have a cool, high-performance, expensive iPhone or N-Series of Walkman Phone or Chocolate - with 3G web access and high resolution camera and MP3 player and videocamera - which they can always carry with them - rather than "waste" that money on a laptop that sits at home all the time.

Generation C (Community Generation) is addicted to the phone (and SMS). They will find it no problem to consume web content on their advanced phones as they mature into young adults. THIS generation will push us dinosaurs into the graveyard. We will be left with our legacy internet. Some of us will successfully transition to the mobile internet but others won't be able to make that adjustment.

In sum

But there are 3 times as many mobile phones as PCs. Phones are replaced every 18 months while PCs every 3.5 years. All phones already have browsers, and most sold today have colour screens and cameras. PCs cost twice that of phones. PCs are not subsidised, but in most markets, mobile phones are. The performance gap between an PC and a mobile phone is shrinking (but probably will never close). Increasingly the web enabled phone becomes a compelling proposition as a web access device

Then the content owners discover this and start to adjust. In China, Japan and South Korea, where over half of all internet access is from mobile phones, all content is preformatted for phone display, not PC display. Now just at the end of November, Telephia and comScore reported that the first five major USA websites have crossed the threshold with more web users coming from cellphones than from PCs. Those first five are Accuweather, ESPN, Weather Channel, Yahoo Weather and G-Mail.

It is an inevitable transition. The reason Apple dropped Computer from its name and announced the iPhone, is because it knows the future of the computer industry is with mobile phones. That is where the internet will go. Microsoft has known that for six years already since it entered the mobile phone operating system market. Google's new CEO announced last year that the future of Google and the future of the internet is mobile. It is no longer crazy futurists like this Tomi Ahonen and Alan Moore here at the Communities Dominate blog. Now the major players in the telecoms, PC and internet industries all see the transition. Yahoo and AOL are deploying search that is optimised for mobile phones, etc.

So this is a follow-up piece on the transition from the legacy internet to the mobile internet. What happens to web content as it migrates to mobile phones. For readers who might like to understand these issues more, the following blogs might be of assistance:

http://communities-dominate.blogs.com/brands/2007/01/putting_27_bill.html

Mobile is the 7th Mass Media, as different from internet as TV is from radio

SMS as the biggest data application on the planet

What happens when the internet transitions from PCs to mobile

Mobile Social Networking now migrating to mobile

Comments

[Stefan Constantinescu]

So how would you classify a digital native like me reading your blog?

Curious to know more about the world around me?

You really should get your talks in to some sort of podcast. Hire someone to follow you around with a superb camera and decent editing skills.

[Tomi T Ahonen]

Hi Stefan!

Ha ha.. You did know we just launched our podcast with Alan Moore on the Horizon Channel last week?

But no, I think I would rather listen to other experts and bring them to our podcasts, and then blog about these things, talk about them at conferences, and let my mind "mull it over" until the thoughts mature enough that I'd dare to put it on paper and author another book...

But yes, digital natives like you - I'm like the Cro Magnon Man, envious of you and your superior abilities :-)

Thanks for stopping by Stefan, you surprised me with the immediate comment ha-ha....

Tomi :-)

[Paul Jardine]

I'd love to go through this and give a reasoned response to each of the points made, but unfortunately I don't have the time.
So, once again I'll say that broadly I agree with the behavioural trends, but I don't agree with the definition of this new 'environment' as 'internet on a mobile phone'. The devices that are starting to cause the move from fixed internet access to mobile internet access have voice as a feature. As data services become more important to our lives, the dominance of voice will diminish (though it will still be important).
It's all semantics really; is a PSP with voice capability a phone or a game device?
What I think is important is that we don't get sucked in to the view that something like the .mobi domain is necessary for the mobile internet.
The mobile internet is the same as the fixed internet, it is just accessed differently on different devices, that tend to have smaller screens and less processing power. No big deal, we already develop for many different browsers. If content is properly developed it can be viewable from any device.
I do agree that the default content will become smaller, and more geared to the majority of consumers.

[Lars]

Hi Tomi:

As always, an great synopsis.. 8-)

Stefan: I'd love to follow Tomi around and shoot tons of video on a regular basis. Meanwhile, my interview's with him at the 3G Forum will have to do:
http://www.wirelesswatch.jp

Cheers!

[oliver]

Regarding the "Search and Mobile" section: the cell phone's small screen does indeed prevent 10 search results from being displayed at a time. But there are better solutions than displaying only 4 at a time and doing more scrolling down. One method is doing back-and-forth texting, with results getting more refined as the texting goes along. Another method is to set up alerts for search results whenever new results appear or old results change (think sports scores or stock updates). 4info.net has this kind of focused searching and alert system set up -- so there already is a lot of mobile search functionality, though not in the same format as you'd get on your computer.

[Tomi T Ahonen]

Hi Paul, Lars and oliver

Thanks for stopping by

Paul - I appreciate your position. It seems very reasonable to think that it will be one web, with both PC and mobile access. But that misses the point I am making. Consider cinema and TV. You can say, to someone in the 1950s, that any TV content "could just as well be on cinema" - when at the time TV ran big highly produced variety entertainment spectacles (not unlike Hollywood musicals of the time) and you could argue that early dramas, soap operas and TV news were copies or adaptations of what was on the movie screen.

But today, the VAST MAJORITY of TV content cannot play on the cinema format. We do become addicted to reality TV like American Idol or Big Brother, and watch it daily and passionately, several hours at a sitting, and often tuning into some of the shows several times per day. We couldn't do that in cinema. The same is true of the plethora of game shows. Possibly if there was one game show only, that could also co-exist in the cinema (remember, cinema has to collect entry fees from the audience, a pay-per-view payment model). But not when we get four hours of game shows in the afternoon and late night, one after another. Someone likes one game show like say a Who Wants to be a Millionaire or the Weakest Link. Someone else likes the game shows of guessing the number of interspaced triangles etc. Game shows would not work on cinema.

How about talk shows. A cheap TV show format, get a host like a David Letterman, Jon Stewart, Graham Norton, and a couple of guests and there you go. Every night. The mass market would walk to the cinema at 11 PM to get this entertainment, but millions do tune in every night as they get ready to go to bed, a bit of jokes and light discussion with a collection of celebrities. Would not work in cinema.

My point is, that ALL of the content that existed on cinema, also exists on TV. Some of it happens to work better on TV (say news) and others work better on the big screen (movies). But all that once was on cinema, is now also on TV. Only movies can generate money now in cinema circulation, the other formats moved permanently to TV.

THEN we get all the new content on TV. That never made it to cinema. We don't watch reality TV, game shows, music videos, talk shows, etc in the cinema. The total content universe for TV is at least 100 times larger than that for cinema. TV totally dwarfs cinema.

TV didn't kill cinema, but it superceded it.

That is what is already starting to happen on the internet. ALL of the content we currently have on the fixed legacy internet, can be consumed on the mobile internet. But hundreds of services on the mobile internet do not exist or are not appealing to the masses on the legacy fixed internet. I am talking about ringing tones, TV voting, breaking news alerts, banking alerts, micropayments like paying for your bus ticket and coca cola from a vending machine etc. In only 18 months, NTT DoCoMo's Felica mobile phone payment service has been picked up by 8 million of its subscribers - 16% of its total customer base. For contrast in over five years, only 15% of the number of total Americans have bought an iPod, and many of those purchases were replacement iPods, and a tiny fraction of them access iTunes. Consider Japan's 16% in 18 months and get the picture. The mobile internet is inherently more useful than the fixed legacy internet.

The service universe for the mobile internet is vastly larger than that for the legacy fixed internet. The number of devices on the mobile internet is vastly larger on mobile. And very soon the amount of data service usage on mobile will be much bigger than that on the legacy internet.

You cannot say that it is the same, because for example a credit card alert - someone used your credit card - which is a huge service in places such as South Africa, Nigeria, etc - cannot work on the legacy internet. We are not permanently connected. If there is abuse of my credit card, I need IMMEDIATE alert about it. Not tonight when I might log onto the web via my laptop and the criminal has had hours to empty my credit limit.

The mobile internet is inherently superior to the legacy fixed internet. It has its limitations (small screen and inconvenient keypad) but has far superior balancing elements - the built-in camera which makes the smartphone a far superior creative tool than just the keyboard of a PC - a picture tells a thousand words, and a moving picture is worth a thousand still images.

The mobile phone is now adapting the 2D barcode - which circumvents typing ALTOGETHER. Accessing the web via a cameraphone and 2D barcode is FAR SUPERIOR to doing it with the best laptop and mouse, as we can see in Japan and South Korea already.

No, the mobile internet is NOT going to only as inconvenient as the current legacy internet. The services on the mobile internet are starting to be more personal, more global in reach, faster, and with more value than those on the legacy internet. It is not the same. The mobile internet is a superior delivery platform. Much more content and services will live on the mobile internet than the fixed internet. But the fixed internet will not die away, and some, in particular commercial/business applications will continue on the web - such as a reporter filing his story via a newspaper publishers website and intranet. Yes, but the mass market - is running to the mobile internet.

But Paul I do agree with you on .mobi.

Lars - ha ha, thanks...

oliver - very good point. We will have search on both. But for search to really serve users on the mobile phone, it has to be tweaked and improved. On the phone we are usually in more of a hurry. We operate the phone on one hand while carrying something on the other hand etc. We are doing two things at the same time. But we need the results fast. We also have the abilities to know the user much better, so the search function can learn much more on the phone than on a PC that may be shared by a family etc. Nobody shares their mobile phone, it is too personal.

Thanks for writing.

Tomi Ahonen :-)

[Paul Jardine]

Tomi, I note that in your response you only use the word 'phone' once. That was really the point I am making. It's not about a phone it's about a mobile device for accessing the internet, that we carry around with us. Though I admit most of the current devices are 'phones', this is only part of the market - probably less than 50% eventually.
The screens are smaller, but similar now to the resolution of PC screens when the internet took off (mid 90's). Everything will be done on an IP link (or several simultaneous), no GSM or other specialist carrier, just a bitpipe.
There will be specialist devices for photography (that will probably run voice apps too), and specialist music devices (that run voice too). There will be cheaper cpmbined systems (from the HiFi model) that do everything adequately.
But what I really would like to see is an Access device that provides multiple network connectivity for all the devices I have; a router (UWB - HSDPA - WiMax -WiFi). That would seal the migration of the internet to mobile - for access at least.

[Uwa]

Shakira's curves get the attention they deserve in today's entry. I'm afraid there isn't any continuity here, but I'm sure you don't mind. As ever, if anyone has any further images from any of these series, please get in touch and I'll fill in the gaps in a future post.

[JulietteSIMS]

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