Mobile Content Platform Market Up Almost 20% but Short of Expectations

The market for premium mobile content platforms grew almost 20% in 2007, resulting in a $3.4 billion share of the $18.5 billion of revenue generated by the mobile premium content market, according to recent research by MultiMedia Intelligence. As cellular subscribers worldwide increasingly look for personalization and enhanced entertainment content on their mobile handsets, subscribers are continuing to purchase more premium content, such as ringtones, music, mobile games and video.

“Many industries would be thrilled with 20% growth. While the mobile content platform and digital commerce services companies find it disappointing, much of the issue is out of their hands,” according to Frank Dickson, Chief Research Officer with MultiMedia Intelligence.

“The ringtone market is softening while other content categories are failing to live up to expectations. Additionally, the mobile content platform and digital commerce services companies sit in the mobile content ecosystem stuck between the more powerful operators and content owners. The operators have tremendous power as they own the subscriber. The content companies have power as they own the content that individuals want. The revenue distribution among the different industry segments reflects this power imbalance.”

MultiMedia Intelligence’s new research also found:

The digital commerce services market was not quite as strong as the content platform market. Mobile digital commerce service companies provide the financial systems underlying the commerce transaction process. The recent MMI research found that the digital commerce segment, comprised of companies like Amdocs, Comverse and Valista, grew at slightly less than 10%.
The transition to an off-deck dominated content market is developing in North America. However, a stronger transition is stymied as the mobile content discovery and purchase process is still too challenging to consumers.
Questionable and unprofessional market activity by some off-deck providers is drawing the ire of carriers such as Sprint Nextel, which recently enacted strict guidelines and is enforcing them with penalties for content partners. MultiMedia Intelligence sees other carriers following suit, not only in the U.S. but in Europe as well, in hopes of cleaning up rogue off-deck providers.
The market will begin to see the emergence of advertising in premium content. Video will be the dominant driver, yet other content types will see growth as well.
Mobile music is still dominated by ringtones; however, the growth of the category is muted as the decline of polyphonic ringtones eats away at the gains made by music ringtunes. Ringtones will remain the dominant music category throughout the forecast period, despite strong growth in full track downloads, streaming music and ringback tones.

Posted to the site on 29th April 2008

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