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« The link economy vs. the content economy | Main | What is advertising? »

July 31, 2008


david cushman

Tomi, monumental post! Don't want to quibble, but wasn't/isn't it the Mallard (not Ballard?)

Feel free to delete this comment once you've corrected - won't be offended ;-)

Have a great hol and see you in the fall!

Tomi T Ahonen

Hi David,

Ha-ha.. where is my brain today. A friend of mine mentioned Barbara Ballard yesterday, and somehow Mallard and Ballard got mixed up in my blog.

Thanks for catching it and mentioning it. I'll go fix it right away.

Ballard.. I also have to write to Barbara and tell her., Funny. Clearly I am desperately in need of a vacation :-)

Tomi :-)


The mobile world has flaws also... paying for content is almost TOO easy. A lot of mobile content providers already act like scammers. For example automaticly subscribing the user to a service when he buys a ringtone. Unknowingly he will keep recieving content untill he sends a "stop" message to unsubscribe. (Which he is also charged for) All this without him actually knowing exactly how much he payed to whom exactly.

And don't forget the iPhone has it's own media distrution channels such as the app store (mobile applications and games) and iTunes (music AND RINGTONES). It also has built in capabilities for consuming content such as youtube movies. If ease-of-use is the measurement you have to admit it's a far better approach then how ringtones and games currently distributed.


If "mobile" turns out to be the way you portray it, where I need to pay for every little thing (since everything I do on it can be tracked and monetized) or where my small screen is overrun with ads, then I, as a consumer, want very little part of it. (As it is, I aim to avoid Internet sites that are overrun with ads.)

And also, if so many billions of mobile phones are already "optimized" for "mobile", why has mobile not yet yielded the huge monetary benefits. Yes, there are SMS and MMS revenues, and some monetization of ringtones and music. But, even you write "Mobile will yield far greater economic opportunities for media (and other services).", where the key word to me is "will," meaning that it really hasn't happened yet.

Tomi Ahonen

Hi Joeri and James

Good comments, thank you. I will reply to both individually.

Joeri - good points and I totally agree with you on the first one - that we as an industry must guard against abuse - such as the misleading pricing practises that some unscrupulous companies have done in some markets. The Crazy Frog ringtone in the UK and many markets was a prime example of this for example. We can be clear, indeed we should be clear about any pricing matters. It is unethical to mislead customers and not tell them what they will be charged and if they secretly are placed on some subscription service, etc. Good point.

But you also discuss the iPhone and its proprietary content and media offerings. Yes, there is a modest opportunity there. It is VERY significant for Apple - but do understand the relative scales involved. The total installed base of iPhone population today is about 1 percent of the total installed base of PC users. And a mere one third of one percent (0.3%) of the total installed mobile phone user base.

Yes, it is an interesting market - for Apple-watchers. But come on, the population of Portugal is bigger than the total installed base of iPhone users. But a mobile phone is in the hands of half of the planet's population... The scales are so off, that they cannot fit in the same equation. The total ability of the iPhone population, even after years of astonishing growth rates (unlikely to happen) would still be a rounding-off error in the scale of mobile phones generally. The iPhone is an iconic phone, certainly, and is changing the industry. But in the big scheme of things, its numbers are so miniscule, that it is irrelevant for a media audience - and this posting was about mobile as a media channel.

James - I hear you, totally. I agree with you, totally. But please do not misunderstand me. First, I said that all phones can do the per-event billing. You have it already on your phones and your providers. You can for example buy a ringing tone onto your phone, off the air, and have it appear on your monthly phone bill - or be deducted from your mobile phone pre-pay account balance.

That does NOT mean that every page should be like that - nor that they will be.

What it DOES mean, is that content owners can create far more compelling offerings, with far more accurate pricing - meaning we pay FAR LESS for the content than with less-efficient media. Any content. The book industry is now discovering this "magic". We've written here at this blog many times about it, how far more efficient it is to release books by new first-time authors as mobile phone books - don't laugh, millions of dollars of books are sold annually this way. You and I don't need to squint to read those, any real "hit" books will be then released in older traditional paper-based print formats as well. Five of the 10 best-selling real books in Japan last year started out this way as mobile books first.

I am not about to mess up with your life, you can have all you are accustomed to. But mobile offers far greater chances to deliver micropayment-based small payments per small element of content; as well as the true abilities to target advertising and get sponsored content - so you get the same info for free on your mobile, but it is charged to MacDonalds or Nike or Coca Cola..

We will NOT accept the same overload of spam ads on our mobile phones as we get on the internet, and the mobile phone operators - Vodafones, Oranges, T-Mobiles, Verizons etc - will not do that to the loyalty of their customer bases.

What we WILL get, is what we call engagement marketing. Again this blogsite is full of those, from Blyk to Tohato (check out the links here)

Ok, gotta keep this short, am on vacation and posting the comments from a brief visit to an internet cafe.

Thanks for writing

Tomi Ahonen :-)


hi Tomi,

while you raise very good points, i think there are some other points which make the picture look a bit different:
1. SMS and MMS have almost nothing to do with media, just as e-mails. i don`t think too many companies would make lots of money by advertising related to e-mails in any way. so i think they are rather just part of the infrastructure than massive business opportunities. not even mentioning that operators still seem to have MMS disabled by default, sending URL-s to look at your MMS even if your phone is MMS enabled - bad, i usually won`t bother typing in a long URL consisting of a computer generated code and also too lazy to go through the painful phone help system
2. i`m not sure that it`s possible to get people`s phone numbers via the internet/wap, if this was the case i would be very concerned about privacy! so basically we`re stuck with dynamic ip-s here
3. i think the majority of those billions of phones are low-end devices owned by people in developing countries, where the last concern of those people is to go online on a small screen with slow gprs connections to spend money on badly designed wap-sites without a well established and transparent payment system, only to get a bill a month later to realise they have been ripped off badly both by the operator for internet fees and the content provider for the content
4. the mobile internet is a myth, wap sites are big waste of money with hardly any visitors on them. the only way to get people to use the internet on their phones is by nicely designed applications connecting to webservices or offering a near-desktop browsing experience, which the iphone achieved at last
5. which brings me to the point that the iphone`s effect might be much more than its sales would suggest, by opening people`s eyes to use internet on their phones and operators` to start offering flat data rates.

i`m by no means an iphone fanboy, if android phones were the first i would talk about them.

though on the other hand i have to mention that some of the handset manufacturers are realising that they should have been selling the content ages ago to end users, making sure that people get content compatible with their phones without the hassle and of course not ripping them off. nokia`s ovi and sony ericsson`s playnow arena might do some magic, let`s see.

it think you build too much on the state of the business in japan and south korea, but even here in europe, which is still much ahead the usa, people don`t use network enabled features that much on their phones.


Tomi T Ahonen

Hi dain

Thanks for the detailed comment. Again, am still on vacation, so please forgive me for being unusually brief in my remarks. But will address each of your numbered points

1. "SMS and MMS have almost nothing to do with media". Sorry, dain, you are TOTALLY wrong. SMS in particular - think voting for American Idol/Pop Idol/Big Brother etc - alone delivers BILLIONS of dollars worldwide to TV broadcasters. Magazines, newspapers, radio stations - even movies - are getting into SMS. Sorry, you are simply not aware of what is happening in the media space. The total value of SMS text messaging is over 100 billion dollars this year. That is more than the global Hollywood movie box office revenues, plus the total global music industry sales, plus the total videogaming revenues - combined. Don't tell me its not relevant..

As to MMS - this is REALLY a media. Simple, yes, and not well functioning in all markets, but all kinds of simple media services from screen savers to games to music clips etc are sent worldwide using MMS - as a media. I think you are very mistaken, dain on this first point.

I do admit, MMS is not perfect in every market and with every mobile operator or for every phone, but we're looking at usage numbers of over 30% of ALL phone users globally - active (ok, meaning at least one MMS used per month) users. And SMS - is the most interoperable data channel on the planet, with over 2.5 billion active users - twice that of all users of the internet..

2. Am not sure what you were doubting. I can tell you for an absolute fact, that if you are on Vodafone or Orange or T-Mobile or whichever network operator, they know your phone number uniquely, and if they choose to track your behaviour (even if they choose only to track your presense info) - they are FULLY capable of doing so. And as to privacy matters - Finland has some of the world's toughest privacy laws, yet all mobile operators routinely collect total customer usage data on all mobile phones in their network and then market based on them. I hear you about Privacy concerns, but these have long since been solved..

3. you are very correct, that the majority of all mobile subscriptions - and phones - are in the developing world. The current ratio is about 40:60 and constantly shifting more in favour of the developing world, as China adds 6 million new subscribers every month and India is adding 7.. Thats two whole new Swedens every month added in Asia in those two countries alone..

But of users in the developing world somehow not wanting internet (and/or data) services on their phones - the need is just as great - if not greater - in the Developing World than it the Western world for internet services, and where their PC penetration is near zero, and broadband very limited, slow and hideously expensive, simple SMS and WAP based services are truly thriving in the Developing world. The Philippines, India, South Africa, Kenya, Brazil, Indonezia, China etc etc etc. HUGE oppportunities, basic jokes, quizzes, puzzles, riddles, pictures, music (ringing tones, ringback tones) etc - a VAST economic opportunity that does not require 3G phones or 3 inch screens.

4. Mobile internet a myth? Sorry. If you are willing to accept that there is no paid content on the internet - and thus no money out of adult entertainment or gambling or multiplayer gaming or virtual worlds etc on the internet, then fine.

But the total value of internet paid content was 25 billion dollars in 2007. The total value of paid content on mobile - so this is excluding person-to-person SMS and any m-commerce payment royalties, etc - strictly paid content - was worth 31 billion dollars last year. The paid content on mobile is vastly larger than that on the internet, on mobile, which is far younger than the internet as a media channel.

Furthermore, the content on the mobile internet (mostly WAP) is FAR more mature than that on the internet. On mobile we do have adult entertainment and gambling, but both are worth less than 2 billion dollars. Meanwhile music is worth over 9 billion on mobile (four times more than internet music) and gaming worth over 4 billion.

Sorry, dain, the numbers simply do not support your position. You may not like your WAP services, but the world does consume vast amounts of mobile internet content. And all kinds of player from Flirtomatic to Blyk to Itsmy to Admob are making tons of money - outside of Japan and Korea...

5. totally agree with yohu that the iPhone is changing hte industry and creating a far greater impact than the numbers of its sales, and that is good.

Ok, gotta go, hoping I was reasonably fair to your points, and sorry if it was a bit abrupt - I did not mean to be hostile :-)

Thanks for writing

Tomi Ahonen :-)

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