How Companies Can Cash In on Mobile Content

Apple's iPhone might have captured the public's attention but the strategic question remains: How will media and entertainment companies and wireless carriers profit from mobile content? According to Hamilton Sekino, a partner in the telecom and high tech practice at Diamond Management & Technology Consultants, wireless media and entertainment is a new frontier, and navigating that terrain can be risky.

"Companies will hit some dead ends in their search for new revenue," Sekino said. "But there's no question that mobile phones are emerging as key devices for the delivery of content. Content providers that do not increase their focus on wireless are taking the far greater risk of losing a new wave of digital distribution.

"We expect the total US wireless revenue for the video games, music, TV, and news & information segments to grow from $1B in 2005 to $8B in 2010, with annual growth rates of 30% to 150% for various segments," Sekino added. "In the video games segment, the wireless share of revenue could reach 18 percent of total revenue, in the music segment, 14 percent. That potential growth can't be ignored."

Those companies share a vested interest in promoting broad consumer adoption of mobile content. But according to Diamond, profitable offerings in the mobile marketplace will only emerge if those companies are willing to test new business models, exploit emerging technologies, and create new categories of content.

"We recommend that content developers develop and follow a long-term roadmap that will lead to new wireless media and entertainment opportunities," Sekino said.

"For example, Diamond is helping clients implement a structured, bottom-up process to identify, assess, prioritize, and develop the business case for new mobile data products and services," he added. "But because there are so many business model, technology, and channel dependencies on wireless carriers, this can't be done in isolation. Media and entertainment companies and wireless carriers must work together in building this shared roadmap. Only then will they be ready to venture into the next frontier of media and entertainment development and distribution."

Posted to the site on 15th February 2007