Communities Dominate Brands

jMac launches Every Single One of Us, join it, or at least monitor it..

Our dear friend and colleague, and certainly also a thought-leader in the Communities-Dominate space, Jonathan jMac MacDonald has now launched his Every Single One of Us initiative.

It is brilliant. It is a collaborative effort. Alan and I are joining to support him and many of our friends are already there.

His mission is to make communiation better. He has a clear plan for it. I urge all readers of our blog to go take a look. His ideas may seem radical - if so, all I ask is that you bookmark his page and monitor jMac's progress - this guy worked did magical stuff in so many places in his career - from Ministry of Sound to Blyk - the odds are, that jMac will deliver something quite significant out of this. If you have an interest to read our blog, then you owe it to yourself, to monitor Every Single One Of Us just incase he turns it into something really big.

And for those who are already converted - the regular loyal readers and those who clutch our book Communities Dominate Brands as the map to their careers - you know who you are - then take my word for this. When jMac says, you are welcome to join, in any capacity you want - he means it. Read his comments with that in mind. If we wrote in the book about "the what", this is now the first case of "the how". And you know in your heart, "the why" - so this is how you can get to really participate in changing communication.

Like I said, Alan and I are already signed up to be footsoldiers in the Every Single One Of Us initiative. You should consider joining us.

iPhone users shifting away from laptops says Rubicon

This was research reported earlier this Autumn in the Wall Street Journal on 27 October. But its an interesting observation and helps convince those who doubt this industry trend.

So, Rubicon Consulting has surveyed iPhone users, and found that half of iPhone users are shifting away from using a laptop computer. 28% said they "strongly agree" with that statement.

This is no surprise to us and our regular readers. We've reported in our book already that even the Blackberry was causing a similar shift among email users, where many busy execs who primarily needed a laptop for email, were shifting away from that when the Blackberry allowed the connectivity in a pocketable and always-connected device.

And we've reported on the shift from a PC based internet experience to a mobile phone based internet in many countries already. But now, especially for those with a strong North American view to the cellphone and its chances as a new mass media (ie 7th mass media) - the iPhone helps convince those. By the way, the overall total access to browser-based content shifted this year, and for the first time there are more people accessing browser based content on a phone than via a personal computer. Yes, this includes WAP access but with that defintion, there are more "internet users" on phones than PCs this year. I'm going to do a major review of the industry numbers shortly and its one of the findings. Another - this year for the first time, there are more people who use MMS picture messaging than use email.. Big shifts happening in the media and communication world.

The robotics company to keep an eye on.. for the long run

So if you've got good genes into the innovation space (read good parents) and good sponsors (read good parents) and a passion into a strongly growing economic opportunity, you know, like, well, robotics? And you start young (say at the age of.... 5????), then the sky is no limit.

Our dear friend - and the CEO of futuretext the publisher of our book Communities Dominate Brands - Ajit Jaokar, is helping his son learn the ropes of the digitally converging industry from a very young age. His 5 year old son, Aditya Jaokar (a very nice lad, I met him recently in London) has set up his own robotics company - named appropriately Aditya Robotics. Ajit made the "unofficial announcement" of the formation of the company - with a very nice picture of both son and dad at the Open Gardens blog.

And the young CEO of that company is so well prepared, that he even has his own business cards already..  The next time I'm in London, I think I need to set up a meeting with the young CEO and we'll exchange business cards. I would certainly like to know more about is vision for the future of robotics in our lives.

Yes, its amazing, this new digital native generation, where will their career paths lead them. Who knows, if Aditya starts this young, and with the helpful guidance of his entrepreneural dad, in a few years we might all be buying Aditya Robotics devices for our homes..  After all, Ajit has already great connections from the media centers like London and New York, to the VC investor community in America, to the low-cost production opportunities in China and India, and already excellent contacts into the robotics-mad South Korea. So the "network" is there already for this young CEO to utilize.

Good luck Aditya. We'll be monitoriing the success of your first venture into the brave new digital world.. And don't worry about the revenues and costs and profits quite yet, as a 5 year old, make sure you get to play a lot, and really enjoy that life around robotics - there is plenty of lifetime left to discover the various aspects of being a businessman. But that business card, that is a very serious start. Congratulations.

Happy birthday Mobile Content: 10 Years Old now and worth 71 Billion dollars

Mobile content. You might think of it as the news alert that arrives on your phone. Or the videogame that you may download to your phone, or the vote that you made in American Idol, or the MP3 song that you listen to on the MP3 player on your phone. Yes, cameraphone pictures, mobile blogs, user-generated videos, even advertising is appearing on our phones. There are so many different forms of mobile phone content, that it may be odd to think, that only ten years ago there was none. None.

It is exactly ten years from the first downloadable content that was made available to mobile phones. Before there was an iPhone, before there were N-Series and Walkman phones, before the Razr and the Blackberry. Before any of the operator portal services such as Vodafone Live and even before Japanese NTT DoCoMo's radical i-Mode. It was the autumn of 1998 when the first downloadable content was launched commerically for mobile phones. People laughed and most said it would never be a "real business". The first content was the humble ringing tone, launched by Saunalahti (now part of Elisa) and first downloaded on the Radiolinja (now also part of Elisa) network, onto only five models of only Nokia phones, that had that peculiar feature, that they accepted "user-installed" ringing tones. The mass-market phone model that was most popular at the time, was the Nokia 5110 and that phone was the most used to consume mobile content in its first year. I remember, I was there working for Nokia as a young executive, and used one such downloadable ringing tone as a surprise gift to a friend back then, in late 1998. I thought it was cool, but I never ever thought it would become a billion dollar business, nor that such ringing tones would be sold much beyond us mobile-crazy Scandinavians. I was imagining "real" music on phones some day, yes, but ringing tones as content.. cute but certainly only a fad, and not for all countries, was my gut feeling. How wrong I turned out to be.

MUSIC THE FIRST CONTENT

I spoke with Saunalahti (then re-named Jippii) CEO Harri Johannesdahl about the ringing tone business back at the time when we were setting up my Consulting Department for Nokia, and by then had changed my mind. The money was amazing. I discussed the business case very enthusastically in mobile internet conferences from Ft Lauderdale Florida to Singapore. The ringing tones were sold at 3 times the premium over person-to-person SMS text messages. So one ringing tone in 1998-2000 cost about 45 cents. The actual transmission cost - using SMS as the bearer - was about one penny, so even after the mobile network operator (carrier) took an enormous cut in its profit - something like 9 cents in bulk at the time, it still left a phenomenal profit margin of 78%...

The total costs of setting up the business was so modest, that Saunalahti broke even after 10,000 songs were sold. In fifteen months they had sold a million songs and for the internet service provider, that Saunalahti/Jippii was at the time, more than half of all of their revenues were generated by this "silly" mobile music concept. Like Japanese Cybird would become famous in 2001, when Wired Magazine told the world of the Japanese internet provider to turn profitable by making its money on the new mobile industry, actually the very first company to manage that was of course Saunalahti in Finland two years prior to that. As we would see, ringing tones would propel famed artists to enormous profits - such as 50 Cent with his hit In Da Club, which in 2003 earned more as ringing tone than all other music formats combined - and most annoyingly of course the Crazy Frog - to the tune of 500 million dollars of global sales of their ring tones and related services in 2005 - one ringing tone earning more than all of iTunes global sales that year.

We've been explaining here at our blog that mobile is the newest mass media channel (the seventh mass medium) and today it is no longer such a surprise that mobile has unique benefits, and is a powerful engine to drive revenues - so strong that internet companies (like Sulake, the owners of Habbo Hotel) and television broadcasters (like Britain's ITV) use mobile to drive extra revenues. So with hindsight, it is no surprise today that the ringing tone innovation made soon billions of dollars of revenues, and then spawned several other unique music formats that only mobile can provide (such as ringback tones, background tones and the mobile karaoke). Also it is no surprise that mobile also started to cannibalize other music formats, such as full-track MP3 song downloads and music videos. But still, the scale of the growth has been enormous. Music on mobile phones today, at the end of 2008, is passing the 11 billion dollar annual revenue level. When we bear in mind, that the total global music industry is only worth 30 billion dollars - it means that more than one in three dollars spent on music globally, is spent on the mobile phone. If you thought the iPod and iTunes was the future of music, sorry. iTunes globally is worth about 2 billion dollars annually. Mobile phone based music (including ringing tones obviously) is five time bigger than iTunes.

i-MODE TURNS TEN NEXT YEAR

As ringing tones were below the radar and spread very stealthily in Scandinavia, the second big innovation in mobile content was NTT DoCoMo's i-Mode, which launched in 1999 with a big splash. This was the prototypical mobile operator (carrier) portal service, and brought essentially every form of digital content to the Japanese market. There were news, games, music, pictures, games, jokes, horoscopes, games, puzzles, games, advertising, games, adver-games ...and did I remember to mention games? DoCoMo's i-Mode could have been a quirky "Only in Japan" phenomenon, had its content been all local domestic Japanese content - of which there is an abundance, naturally. What is very amazing, is that right from the start, NTT DoCoMo was able to entice several global media brands to launch on this weird mobile phone innovation in Japan. Disney was there on day 1. So was CNN. And MTV joined also on the first day of i-Mode in Japan. There were dozens of major Western brands on the launch of this weird Japanese experiment. And its nice to recognize my very dear friend - and also a friend of Alan's - Voytek Siewierski, the Polish-born, USA trained, "gaijin" (foreigner) who used to be an Executive Director at DoCoMo HQ in Tokyo, who managed to conduct these negotiations. Can you imagine how hard it would be to convince such USA-based media giants to bring their content to "cellphones?" a decade before the iPhone? Heroic job, Voytek !

Again, today, it is no surprise that of NTT DoCoMo's customers, almost all use i-Mode. More than half of Japanese mobile phone owners download games to their phones, etc. But back in 1999 there was no precedent to this. They built it, and hoped they would come. And boy did they come. The revenues to NTT DoCoMo out of only the Japanese domestic market for i-Mode, have been so enormous, that since 2001, DoCoMo has been the world's largest internet company by revenues (and the largest in profits by several orders of magnitude compared to any "traditional" internet companies). I believe this year 2008, Google will finally catch up with DoCoMo and become the biggest internet company on the planet, by revenues (but not by profits).

GAME ON

And yes, did the mobile phone games take off indeed. You might not have paid much attention, because up to last year, half of all mobile gaming revenues worldwide were generated in only two countries - Japan and South Korea (both videogaming-mad countries in general). But its not just the domestic market and mature customers with advanced gaming consoles. It was also the business model pioneered by i-Mode which drove the early success of all content in Japan and very much so gaming. NTT DoCoMo made a content revenue-sharing deal where they only took 9 cents out of every dollar. The Japanese rivals (KDDI and J-Phone, which is now Softbank) both soon copied the model and South Korea was the first foreign country to adopt a similar revenue-sharing level as Japan. For contrast, at the same time, most European and American mobile operators (carriers) talked of 50:50 deals in content. You can understand that content owners were far more eager to deploy onto the services in Japan (and South Korea) than the rest of the world, under those terms. But it was not just Japan, obviously. Gaming took off in many Asia countries very rapidly. In the Philippines for example they passed the half million game downloads milestone in 2001. Hong Kong based Artificial Life celebrated the sales of the four millionth download of the virtual girlfriend for your mobile phone, V-Girl, across the several countries where they offer the service.

While Japan innovated with the overall content revenue-sharing deal, South Korea took the next, even bigger step, for mobile phone gaming. They invented what EA (Electronic Arts, the world's largest videogaming producer) calls the "Asian Model" for gaming revenues. The Koreans offered the gaming experience for free, and offered personalization features at a premium cost. Even though typically only 10 percent of all gamers are willing to buy these premium content elements, the economics of mobile telecoms are such, that the numbers are so huge, that this is easily the most lucrative gaming model. I've chronicled some of these with for example the Kart Rider case study in my fifth book Digital Korea. EA now says they will base all their future multiplayer games on the "Asian Model" and have already launched some titles on this principle. But back to mobile gaming? Now as Taiwan and China and Singapore and Hong Kong and Malaysia and Thailand are getting heavily into mobile gaming; and as Europeans and Americans also are increasingly getting the mobile gaming bug, the total value of downloaded and networked videogames on mobile, are reaching the 10 billion dollar level globally in 2008.

THE ADVENT OF ADVERTISING

Well, as there is content, there is an audience. And where there is an audience, there is advertising. While NTT DoCoMo was still figuring out how to enable advertising onto its service (which they resolved by launching a joint venture with Japan's largest advertiser, Dentsu, to form D2 in June of 2000), the innovation switched back to Finland. The Finnish commercial TV broadcaster, MainosTV3, launched the first ad-funded and totally free news service to mobile phones in the spring of 2000. The daily news summary was provided via SMS text messaging, and the subscriber would also receive one SMS advertisement every day. By the time I was chairing the world's first mobile advertising conference in London a year later in February 2001, there were mobile advertising concepts already in many countries such as Germany, the UK, USA and Spain.

Where is mAd today? While many analysts suggested a slow-down in mobile advertising for this year, the reality turned out to be the opposite. The returns, the success rates of mobile campaigns, are so much greater on mobile than on any other advertising channels - good campaigns get 20% to 30% response rates (not click-through rates), and peak campaigns get 30% conversion rates, such as the BMW winter tyres campaign we talked about earlier at this blog. As the facts are seen, this is a one-way street. The advertising dollars come in, to trial mobile advertising, and then while other budgets might be cut in the economic downturn, not mobile. When you go mAd, you never go back.

While mAd is almost as old as gaming and music, it has had a slow and troubled growth. But this year 2008 mobile advertising will pass 3 billion dollars in total revenues. And a revealing number was given by Juniper, who said that 1.5 billion individual people will receive at least one mobile advertisement this year. Put it in context, there are under 500 million newspapers sold daily. There are 900 million personal computers connected to the internet. There are 1.3 billion internet users. And 1.4 billion TV sets. But 1.5 billion people will receive ads on phones this year. How many more will receive them next year? On the one hand, companies such as Admob report delivering over 4 billion mobile ads per month; while on the other hand companies such as Blyk are educating the advertising industry how to move beyond banner ads and SMS spam into true engagement marketing, as pioneered by our Alan Moore. And the innovation is not ending. In India of all places, they invented the adver-game, a fully advertising sponsored mobile game. Again this has been spreading like wildfire.

MOBILE, TV AND VIDEO

Then in 2001 another innovation happened in Europe, with simultaneous inventions. In the UK, MTV Networks Europe launched the world's first television programme that allowed live viewer voting. The show was Videoclash, and viewers were given the choice of two videos, and to pick which should be shown next. This is genesis to the concept of SMS-to-TV programming, and the very real parent to what then evolved into American Idol, Big Brother and all other reality TV voting on TV. The same principle then was evolved into all forms of real time live television gaming. How big? Just the SMS-to-TV programming is worth over 2 billion dollars today worldwide and many cable TV channels get from 80% to 100% of their income from SMS interactivity. In a very real sense, the convergence between broadcasting and mobile started with this innovation in the UK by MTV.

But most of us would tend to think, if "television" and "mobile" were put into the same sentence, that it means we are watching television on our mobile phones - as is today possible on almost all networks around the world. By coincidence, that too was launched in 2001, but in Finland. It was again innovative commercial television broadcaster MainosTV3 in Finland, who teamed up with a video transmission specialist company in Finland called Sopranos, who produced the world's first television clips, that could be viewed on a mobile phone. MainosTV3 offered highlight clips from the nightly TV news through this innovation. In 2001 there was exactly one phone model in the world, that had the colour screen and a powerful enough CPU to handle the tiny video clip - this was the brand new Nokia 9210 Communicator (the first colour Communictor) - and to watch a 30 second clip, would take about 2 minutes for the grainy poor quality and lousy sound clip to download over the fastest cellular technology of that time, called HSCSD (a technology that was called a "2.1G" technology, far slower than so-called 2.5G and 3G technologies we have in use today).

As the networks got faster, and other technologies came online like digital broadcasts to mobile phones from South Korea, more "true" and live TV became possible on mobile. Today mobile TV and video tends to be divided into four groups - video clips, streaming video, broadcast TV to mobile, and SMS-to-TV interactivity - and the four groups combined are worth about 10 billion dollars globally in 2008. And two other ways to look at it. There are 900 million personal computers, that can show television/video content. There are 1.4 billion TV sets in the world. But there are 2 billion mobile phones with a colour screen and at least 2.5G network connectivity, meaning they can display "streaming" ie live TV and video. Or to put it another way, this year we'll sell 300 "multimedia" mobile phones - phones with a colour screen and some media player such as Real Player. That is more multimedia phones sold than all TV sets sold this year (plasma screens and any others), and more than all PCs sold this year (laptops and desktops combined).

LIKE MERGING AN AIRPLANE WITH A SUBMARINE

Then back in Japan, 2001 saw yet another bizarre innovation. I remember myself doubting this when I first heard of it, but J-Phone (later Vodafone KK, now Softbank) decided to launch a mass-market series of cameraphones. The first resolution was less than VGA and the screens were of very modest quality, and the in-phone memory ability to store pictures was miniscule as well. In just over a year, 40% of J-Phone's customers had snapped up cameraphones. As we've seen, the cameraphone has been the biggest tech hit of this decade. Over 3 billion cameraphones have been sold since 2001 and about 2 billion are currently in use. Compare that with about 200 million iPods shipped since their launch in 2001, or under 30 million PSP's (Playstation Portables) and you get the scale of this pocket wonder. The big cameramakers misjudged this innovation, and of the four giants, only Canon and Nikon remain in the camera business, Konica and Minolta no longer exist in the camera market; and the world's bestselling camera brand, since 2004, has been Nokia.

Cameras are obviously not "mobile content", but pictures are. Again it was J-Phone, with its Sha-Mail, the pioneering picture messaging service, that led to what we now call MMS picture messaging, the global standard for multimedia messaging between mobile phones. Its easy to misunderstand the vastness of MMS, when it sits in the shadow of SMS text messaging (the most used data application on the planet, with 3 billion active users in the world at the end of 2008). But a third of the the mobile phone subscribers on the planet does send MMS picture messages - that is 1.3 billion people for those who are counting. Comparing that with 1.2 billion active users of email, and suddenly MMS is very interesting indeed (and one truly has to wonder about the mathematical abilities of those in charge at Apple, why has this simple software element not been added to the iPhone).

Here in Asia, MMS is used by 48% of all mobile phone owners and about a quarter of Europeans use it. Obviously we don't send picture messages every day like we do with SMS text messages; picture messages are sent at a rate of a few per month. But worldwide, you can reach a larger audience if you put your content (or advertising) on an MMS picture message, than if you put it into email. That should give many people pause. Email has been around for three decades, MMS is less than seven years old. Already bigger and growing much faster in user numbers. No wonder innovative companies such as Blyk are building "engagement marketing" on the MMS platform. And its not just person-to-person messaging or advertising with pictures. We also love to upload our pictures from our phones to social networking sites such as Flickr and Cyworld. The pictures content business on mobile phones (including buying pictures as screen savers etc) is worth over two billion dollars this year worldwide.

OTHER INCLUDING ADULT

Yes, there is lots more in mobile content. Yes, there are the jokes, cartoons, horoscopes, daily greetings and religous sayings; etc. There is a big billion-dollar industry in mobile gambling alone. Mobile education services are another that is nearing a billion dollars globally. Search is there on mobile phones. News services are another big category. The NTT DoCoMo innovations of sending "CNN News Ticker" style news feeds to the idle screen of the mobile phone was so popular that in its second year, it earned.. 160 million dollars in news content revenues. One service alone, in only one country. If I was a newspaper or radio station or 24 hour news broadcaster, I'd pay attention. (The DoCoMo news ticker is the first case study in my new book).

And yes, of course adult entertainment is there as well on mobile, but not that big as the music, gaming and TV sides of the business. Adult content is less than half those, at about 4 billion dollars worth worldwide. As many media analysts have said, any new mass media starts making money with adult content, and then becomes more mature when it discovers its own other opportunities. That mobile has so many larger media formats than adult entertainment, suggests that mobile is far more mature than the internet for example, where adult entertainment is still the second largest content revenue source after advertising revenues.

COMMUNITIES DOMINATE

There is still one more category I have to mention, when considering the ten year anniversary of mobile content. The youngest of this group, but the most exciting. It is "communities" or "mobile web 2.0" or "user-generated content" or "mobile social networking." As we say in Finland, a favoured child has many names. Yes, social networking on mobile phones. Anything from user-generated videos to dating services to chat to blogs to multiplayer online gaming to virtual worlds. This was first launched in South Korea in 2003 when SK Communication's recently-purchased Cyworld online social networking service launched its mobile version. From that fateful moment, the growth of mobile social networking has been breathtaking in all markets. We've talked about SeeMeTV and Itsmy and Flirtomatic and MyNuMo and Self Central and of course Cyworld here at the blog. Three year old Flirtomatic went from 200,000 subscribers last year to one million this year. Over half of those are mobile users. And like Mark Curtis says, on his mobile service they make so much money, that they have abandoned the monthly subscription as "unnecessary". On UK SeeMeTV the creator of just an average video earns 27 dollars in his "royalty" paid to his/her account, when others view his/her video. Top video creators earn literally thousands in income from a video shot on a mobile phone. Cyworld is a whole world in itself, as if on another planet, where instead of air, they breathe money. Cyworld earns 300,000 dollars every day - every day - out of just the personalization the users make inside the virtual world. (I was so proud and honoured to have SK Communciation CEO Dr Hyun-oh Yoo write the Foreword to my previous book Digital Korea). Note South Korea's population is smaller than that of Britain, and far less wealthy. Mobile social networking is a giant cow that milks money, honey.

How much money? In two years from launch, mobile social networking passed the billion dollar annual revenue level (a world record for a new billion-dollar industry). Just two years later, or four years from launch, it passed 5 billion dollars in annual revenues. This year it passed 9 billion and next year will easily cross the 10 billion dollar level of annual revenues. From zero to 10 billion dollars in six years. Mobile social networking is by far the fastest-growing billion dollar industry ever. For comparison, the online internet side of social networking is three times as old, and still hasn't passed a billion dollars in total revenues - where most of that is advertising revenues. Few internet-based online social networks have found profitable business models and the internet pundits regularly ponder about how will the MySpaces and YouTubes and Flickrs and Facebooks ever become profitable (or even survive in this economic downturn). But the mobile social networking sites are making oodles of cash, and many have already become profitable in this very short time. Like I say, its time to wake up, and to smell the cellphone.

71 BILLION IN TOTAL

The mobile content industry is now ten years old. In the past ten years, mobile content has turned into a global giant industry worth over 71 billion dollars of annual revenues. That is as big as all hollywood box office revenues, plus all global music revenues, and all videogaming software revenues - put together. Hollywood and music are 100 year old industries. Videogaming is a 30 year old industry. But mobile has already grown bigger than all three, combined, in only ten years. This is a juggernaut. Its a runaway train. Its the opportunity that will suck in every cliche that pundits can think of.

HOW NOW BROWN COW?

To succeed in this space, you should not copy your existing content formats and try to squeeze them onto the mobile phone. Yes, we can of course take the existing web page, and squeeze it to the phone screen. Yes, we can chop up movies into 5 minute clips and offer them on phones. Yes, we can do the headline news, and offer them on SMS alerts. But that is copying existing legacy mass media. Television did not succeed by showing "cinema" content on the TV screen. Yes, movies were always a part of television, but TV innovated and created. Talk shows, 24 hour news, Game shows, Music Videos, Reality TV. You can't do those in the cinema. They are not copies of an older media. They are content invented for TV. Now we have to do the same with mobile.

Mobile is a new mass media (the seventh). Not the dumb little brother of the internet. Mobile is a superior mass media platform, with seven unique benefits. And yes, it can be done. We have countless examples of true mobile content innovations, here at this blogsite and at my parallel blogsite www.7thmassmedia.com. Obviously I have 16 case studies in my latest book, Mobile as 7th of the Mass Media, to show how to go beyond the copy, and into the creative and innovative. Remember, mobile content is not a "struggling industry" like the internet, where content owners hope to find "eyeballs" and then desperately try to sell advertising. We get 71 billion dollars of revenues, and 68 billion of that - 96 percent of it - is content that is paid for by the end-users. We have a far healthier industry than the internet. You can make money in mobile.

NOW IT IS TIME FOR A FREEBIE

So, as my last free contribution to your success on this topic today, I have a nice early Christmas gift to you. My company TomiAhonen Consulting has just released a big industrial report on the full state of mobile as the 7th mass media channel. And as we like to do here at Communities Dominate, there is a real, useful free variant. I have a 20 page excerpt of that report, with tons of stats and numbers of the state of our industry today. So, if you'd like the free 20 page excerpt, send me an email to  tomi (at) tomiahonen (dot) com. I will send you the pdf file by return email.

For any fellow bloggers, press professionals, analysts etc, who want to quote a reference to any of the numbers in this blog posting - except for the few where I list a source, all others are source: 7th Mass Media Report, TomiAhonen Consulting, Dec 1, 2008. You may of course freely reference these numbers in your blogs, stories, white papers, reports etc. In fact, I hope you do, because it is good news, that this industry is so healthy, considering all the bad news coming out of Wall Street, Detroit, etc. But yes, its time to celebrate. Mobile content is ten years old today, and in that time, it has evolved into a giant industry worth 71 billion dollars in annual revenues globally. Nice job ! And thanks to the humble ringing tone (ha-ha, still makes me laugh, they were profitable after the first 10,000 downloads...).

UDATE Dec 10 - I've just published a companion blog, about the overall size of the mobile industry for end-of-year 2008. All new numbers so if you are interested in the "big picture", you may want to read this blog entitled Trillion with a T: Newest Giant Industry is Mobile

From virtual red roses to virtual boob jobs? - Flirtomatic shows how to make money in social networking

Time for a major update on one of the most interesting players in the social networking space, both on mobile and the internet.

Flirtomatic of the UK is one of our absolute most favourite cases of "Communities Dominate" that has figured out a solid revenue model ("we abandoned our monthly fee as unnecessary" said CEO Mark Curtis over a year ago) and we've discussed its innovations here often from millions of virtual red roses, to the "first face" adaptation of user-generated and user-priced (auctioned) advertising. Flirtomatic is one of the case studies of my newest book, Mobile as 7th of the Mass Media. Flirtomatic has already started its international expansion with their launch in Germany, and under 3 years from launch, they have over a million registered users - and more than half of those on mobile.

Flirtomatic CEO (and author of the excellent book Distraction) Mark Curtis is a very dear friend to both Alan and me. It was a great pleasure to be chairing when Mark presented at the IIR Mobile Content Conference in London last week. Mark is always both an entertaining and insightful presenter. He is not afraid to give real numbers and to burst myths and expose reality into an industry often overloaded with hype and unreasonable expectations. He is also humble to admit errors and again, honest to discuss them. I could write a chapter into a book about Flirtomatic and what Mark has told us about it over the years. But lets get to the meat of what he talked about at the event.

THEY BUY EXTRA FUN FROM US

So yes, remember this is not a "dating" site or service, it is a fun service, simple, easy flirting. Not pornographic, just "cheeky" adult fun, with plenty of sexual suggestion, but nothing goes onto Flirtomatic, that the BBC would not be willing to show on TV. So lets start a bit on the membership of Flirtomatic. A million registered users, over half on mobile, the rest on the internet. Men/women balance is strongly men (as could be expected) but just over one in three - 35% - are women.

They get 155,000 unique visitors per month. And this gets astonishing. While mobile users of Flirtomatic have been more active than internet users right from the start, today active mobile users will visit the site - seven - repeat - seven - times per day. Wow. Mark said that when the service is tailored to suit the mobile user, like the mobile variant of Flirtomatic is - and the users find it useful, there is no doubt the mobile internet will be popular. Mark says that their members use Flirtomatic "voraciously."  I like that word. Voraciously. Yes, this is a good industry to be in...

MAKING MONEY

Flirtomatic has made a science out of creating virtual value that can be paid for with their virtual currency, "flirt points." They already have all forms of virtual gifts (eg virtual red rose) and customization etc that can be bought and paid for by flirt points. So they keep innovating. As the members can rate each other for how many stars you get for being a good or bad flirt - now Flirtomatic will sell you some ratings related services. If you have a bad rating and want to get rid of it, you can pay to remove your worst rating. They call this "Delete Your Freak". Men seem to like this feature. And another premium service is that you can find out who gave you the rating(s). Women seem to like this way of dealing with their bad reviews..  Interesting. But the point is, that Flirtomatic is making money at every stage. They let you play in the service for free, but they make sure there are plenty of "fun" you can have if you are willing to spend some "flirt points"

So this year 2008 was a leap year. In Britain there is a tradition that on leap year day (February 29) it is customary that women may propose to men. Flirtomatic approached the end of February with no real Leap Year gift or gimmick, and rather at the last moment decided to offer wedding bands, that women could send as gifts to their flirting partners - as to "virtually propose". Consider the art work - a very simple graphic of two yellow bands of rings, two wedding rings. How much art work did that require? But they charged it at approx 1 UK Pound (1.40 Euros, 1.75 USD) and they sold 14,000 rings / virtual propositions on Feb 29. That was total bonus income, to utilize the special day. They are in the fun business. As Mark says of the Flirtomatic membership, "they buy extra fun from us." Brilliant.

ADVERTISING

Flirtomatic also offers advertising, from basic banners to sponsored content (ie L'Oreal Big Wet Kiss, a virtual kiss sponsored by the make-up brand). So for example this year Flirtomatic had a campaign run with the Strongbow alcohol brand - by which you could give your friend a pint of Strongbow, via a virtual coupon in Flirtomatic, that could be then redeemed at a real pub for a real drink of the brand. Obviously they would love it..  But the beauty is, that mobile allows us to do far more in the advertising and branding space, than previously on older mass media. Mark told us that the balance of Flirtomatic revenues has shifted ever more to the virtual content and personalization. That while advertising revenue was there from the start, and still a year ago was roughly half of all of their revenues, today advertising is only 25% of Flirtomatic revenue. They have so many more revenue streams from the more innovative methods.

VIRTUAL BOOB JOBS

So remember, this is mostly for young adults in the UK, a non-pornographic, but fun flirting environment. They don't allow any nudity, but bikini etc scantily clad images are fine. So, as summer 2008 approached, Flirtomatic designers were thinking of what to do to bring the membership into a summer frame of mind. They had the idea of a "summer make-over". So they offered their membership a series of different summer beach preparation activities (all at premium costs of course) such as tummy-tucks, liposuction, and yes - virtual boob jobs. I have the image that Mark kindly provided, I have to come back and post it here for reference, it is simply funny and very "innocent" with the girl in her bikini, and suddenly her breasts expand, to the point of her being slightly embarrassed. Very funny and - very provocative, in a cartoon way. The virtual boob job cost 1 UKP in flirt points, and they sold ten thousand of them for the summer. This industry is a license to print money if you are clever and creative. Virtual boob jobs indeed. I have a dirty mind, and I could not have thought of that. Brilliant move, Flirtomatic !

LOCATION SEARCH

Mark then discussed their primitive steps into location-based dating/flirting. I think I may have been a subconscious "barrier" to Mark and his team rushing into "location-based" sides of their business, as we've often met up with Mark and he knows well my strong views of the futility of location-based services. Nonetheless, on their sign-up, several pages down into the personal information, Flirtomatic offers users the chance to fill in their UK post code. So its a totally volunteer thing, only modestly accurate in terms of the home of a given member, but when they looked into it, Flirtomatic managers noticed that about six in ten members had in fact filled in their location. So they decided to offer their members "location search" to find other flirting partners based on the postal code. This search was a premium service, at 50 pence (70 Euro cents, 90 US cents) per search. And amazement - this was an immediate hit. They raised their total revenues by 20% when this feature was enabled earlier this year, and that was not a short-term effect, the level never returned to the earlier levels. Mark was very open to the audience, that he was quite upset that they didn't try this earlier. They had discovered a 20% boost to their revenues, with just one new parameter added to the ability to search for flirting partners. Wow, this is a magical industry.

I think there are really powerful lessons out of Flirtomatic to all who read our blog. On the internet, the assumption is, that everything "has to be free". That is how we see it on Google and Facebook and YouTube etc. But on a mobile (and on any internet-mobile converged) service, there is a very robust ability to monetize the customer's interest. Without damage to your brand, as long as it is done well, and the customer is happy. Remember Flirtomatic delivers more fun to its users. They grew from 200,000 members last year to over one million now. So the customers are not unhappy about these charges. And as long as the service makes clear that these are premium items, that you don't have to buy, but you can have more fun with them - then some customers will consume them (ten thousand boob jobs, gosh, flirtomatic has to be one of the world's largest virtual plastic surgeons ha-ha)

ASK YOUR MEMBERSHIP

And finally, a fascinating tidbit. Mark said that they ran their first customer survey of their membership. They offered this with no incentives, simply as a dialogue with members. Mostly a multiple-choice quick response survey, but also with two open-ended questions where people could fill in responses in text. Bear in mind regular national consumer surveys for things such as national elections, tend to run about 1,000 responses. Flirtomatic received 6,000 responses in two hours. They had so many filled in text replies in the open-ended parts, that they were unable to process them all, and their "market survey team" was totally overwhelmed with the level and depth of the responses. Wow. So if the Flirtomatic management had any internal squabbles about what their customers might want or not - now they have a treasure chest of real customer opinions and comments. Great job !  And goes totally to our philosophies, that Alan and I wrote in our book Communities Dominate Brands - that you need to engage with your communities, and ask them..  Very good.

There was much more, but this serves as a quick update of what is happening with the world's favourite flirting service ha-ha..  My best of congratulations to the Flirtomatic team and best of luck for the next year. I can't wait to see what you guys come up for Valentine's Day 2009 etc.

PS - Flirtomatic is one of the 16 case studies in the new book. But a nice coincidence is that the one case study in the free 30 page excerpt from the book, happens to be Flirtomatic. So if you'd like to receive the free 30 page excerpt of the book Mobile as 7th of the Mass Media - with 2 full chapters and the foreword and Flirtomatic case study - send me an email to tomi (at) tomiahonen (dot) com, and i'll send you the pdf document by return email.

SMS saves boy's life as doctor in Africa gets advice from doctor in London via texting

It seems so many of the best stories in the high tech industry come from the least developed parts of the world, where the simplest technology can be a lifesaver. In this case quite literally, saved the life of 16 year old boy in Africa, in the Democratic Republic of Congo.

The boy was in hospital supposedly because his arm was bitten off by a hippopotamus while fishing. The UK based doctor, David Nott, who was in Congo through his volunteer work with Medicins Sans Frontieres, suspected the 16 year old boy had in fact been shot during the civil war that rages in the country. But the arm was badly infected and gangrenous. He would die in 3 days.

Dr Nott knew that this required a very special type of amputation - because of the enormous blood loss when an arm is removed - and he had never done such an operation. But Dr Nott had his mobile phone, and knew a specialist in the UK who does this type of amputations (they do 10 of these per year in the UK, typically to some cancer patients). So Dr Nott contacted Dr Meirion Thomas at the London Marsden Hospital - and Dr Thomas agreed to send the amputation advice via SMS text messages to Dr Nott.

The boy survived. Imagine that, a life-saving operation, done by a surgeon who had never done that before, and being advised only via SMS text messaging. How wonderful. The BBC covered this story on the news today, and have the story with pictures at the BBC website. Thanks to our friend Alex Kerr for covering the story at Forum Oxford.

The glittering allure of the mobile society

In February of this year I found myself on a cold and rainy day in Evian, at the behest of Microsoft at a international summit for CIO's.

As a consequence of that presentation Microsoft in the US asked me if I would write a paper on the future of the mobile society.

On Friday the paper was published for Microsoft CIO Community. I wrote in my opening

When it comes to mobile telecommunications, it is often said that what works in one country, does not work in another. I wholeheartedly refute that argument. Human beings are more alike than we care to admit. We are programmed to be a “we species”—a social networking species with an innate need to connect and communicate. I often muse on the reason why SMS is ubiquitous as a communication mechanism. It is because we as a species do, in fact, constantly communicate via short messages, a behaviour that we learnt millennia ago.

That is why we are inevitably moving towards the Mobile Society, where our mobile devices become the remote control for our daily lives. Because any technology that allows us to better connect, communicate, share knowledge and information, and get stuff done will be widely adopted.

The Mobile Society is completely different to the industrial society. It requires a new logic and a new way of thinking of how to create business, civil governance, health care, and education. The mobile society is seen as both an opportunity and a threat because it signifies a reordering of business models, new flows of communication, and the appearance of new gate keepers in the information distribution wars. Resistance is a natural response when society changes structurally. As a consequence, there are differing points of view on what exactly the Mobile Society can deliver, depending on who you are.

Carlotta Perez in Technological Revolutions and Financial Capital:  writes

With the emergence of the next technological revolution, society is still strongly wedded to the old paradigm and its institutional framework, the old habits and regulations become obstacles, the old services and infrastructures are found wanting, the old organisations and institutions inadequate.

The way forward is to better understand how the Mobile Society can benefit us all, the business of commerce being but only one piece of this complex jigsaw. I have come to the conclusion that we have separated commerce from community; we have lost sight of the fact that the society of consumers is in fact us—people who need more than shopping to give us richer lives.

The Mobile Society promises that richer life in the same way that Gutenberg's 42 Line Bible freed information from the confines of the church and redistributed it to a wider society, which subsequently brought us the Reformation , and the possibility that man and woman for the first time could make their own way in the world. The Mobile Society will bring unprecedented flows of communication and these flows of information and communication are the engines of innovation and commerce.

If you would like a copy of this paper, which is a significant evolution from this previous paper then please get in touch email me info (AT) smlxtralarge (DOT) com

I thank Microsoft for giving me the opportunity to research, think and write. It has been of enormous fun for me.

More of the "we are young, the adults are not like us" stuff - now mosquito noises

Our friend Russell Buckley at MobHappy has blogged about a new Fanta tennis game played on mobile phones with Bluetooth. So far so good. The really clever part - the ball makes bouncing noises on the phones - which are of such a high pitch, that us older folks can't hear it !!!  These sounds, that are also called mosquito noises, have been used a couple of times in the past, but now kids have a cool Fanta game to enjoy the sounds that their parents certainly cannot hear. It must be weird to know they can't hear. And it must also be a sad sign of growing old, for the 18-19 year olds now, when they notice in a year or two, that they no longer hear the game...

Anyway, there is also a "youth rebellion" side to the phenomenon. Of course some clever kids have now stored the sounds as their ringing tone. To their elders, like their teachers and parents - the phone is totally silent. But the kids hear it. Ha-ha, seems almost like the phone can read my mind. The game was developed by our friends over at Ogilvy, so congratulations to them as well.

A Quantum of Satisfaction... paging the suave 007

(This is a Bond break.)  So yeah, of course your HatRat had to go see the new Bond, and while in London it was part of the joy of that trip a week ago. A Quantum of Solace. Yes, its a "real" James Bond and yes, very much action and yes he is fierce and most credible as a professional killer...

..yet. Yet. Yet there is that quantum of sorrow..  Yes this is the new Bond, but where is all that us, the decades-long fans loved about the frachise. No gadgets (ok, yeah, he plays around with a phone, but come on, we all have cameraphones today). No Moneypenny. No Q. No "shaken not stirred". Even the gun barrel came only at the END of the movie. Come on, this is the trademark for the start of the movie, not the end.

And then where is the style? The clever lines, the smooth, mr cool side of Bond. He's a ruthless killer yes, and more modern yes, but still - Bond was always smooth, cool, suave. Why is he not flirting with the women. I think this would have been an excellent episode of Die Hard (where John McLain is a married tough-guy New York cop) but come on, 007 is the ultimate single guy. In the early movies he charmed at least five Bond Babes all the way to bed per movie. Now he seems almost uninterested in the female species..

I was so looking forward to this new Bond (I even included a line anticipating it into my newest book ha-ha) and yet, it seems not to be an Abundance of Satisfaction; the movie ends up being a mild disappointment. Only a Quantum of Satisfaction. A Bond movie yes, a good movie yes, not a total flop like lost-in-space Bond in Moonraker ha-ha, but yet.. its not a complete Bond. I do hope the producers bring more of the full Bond experience into the next outing.  (we now return to your regular programming at the CDB channel)

The post-Obama effect: American retailers now discovering cellphone and SMS

I caught this at Forum Oxford, where our dear friend Faith McGary of KGB - not that Soviet era spy organization, but rather the information services company that was until recently known as Infonxx who operate directory assistance services from America to UK to the Philippines. KGB indeed..

But yes, Faith reported on a story by CNBC, that for "Black Friday" several US giant retailers like Sears, JC Penney's and Amazon - using SMS alerts to inform consumers of special offers etc. MSNBC writes:

At JCPenney's Web site, for example, you can sign up for a wake-up call for the day after Thanksgiving, as well as get "helpful shopping tips" texted to your phone throughout the season. You may want to consider putting your phone on "vibrate" at work. Sears is launching "Sears2go," for cell phone users, who want to text in their orders, do product searches or find special offers. "Say you want to get a Craftsman tool set for your friend, You text in the order and Sears will text you back when your item is ready for pickup at the store you want," said Tom Aiello, division vice president for Sears Holdings Corp. "This creates a very easy way for people to use their mobile phone to shop." Amazon.com, among others, is also happy to send you a text alert for its "daily deals," if you're not already getting bombarded with e-mails from the Internet giant, as well as other retailers.

This is great news - for Americans and the American industry. The rest of the world has been well aware of the power of SMS text messaging for this decade already - any car dealer in Helsinki Finland for example, will inform you via SMS text messaging what is the status of your car maintenance, and when it is ready for pick-up etc. Nothing new here. But wonderful to see that finally, the Americans are waking up to SMS.

And personally, I am certain, that the Obama campaign's frequent and innovative use of SMS text messaging was a catalyst to this, especially the stunt to announce his VP pick - one of the biggest news stories of the year - via SMS to his supporters, rather than via traditional news conference, went a very long way to "wake up" the eyes of miscellaneous businesses and other groups in America, to the power of SMS text messaging. But again, our regular readers all know that, we already wrote in our book Communities Dominate Brands, that libraries in Finland five years ago gave alerts that your book needs to be renewed, via SMS (and better yet - allowed the renewal process via return SMS text message). Etc.

Great news, Faith. Thanks.