Carriers and content providers increasingly are targeting younger users in a scramble to push revenue-generating content and applications into one of the few remaining growth market segments. But marketing to teens, “tweens” and even grade-schoolers can be a perilous endeavor.
Last week, a group of consumer and children’s advocates launched a campaign urging Congress to investigate the growing trend. Citing recent efforts by Firefly Mobile, Wherify and others-as well as the planned mobile virtual network operator offering from the Walt Disney Internet Group-the consortium sent letters to members of the House and Senate commerce committees accusing the industry of declaring “open season” on U.S. children.
The effort was organized by Commercial Alert, a Portland, Ore.-based nonprofit activist group co-founded by Ralph Nader. Supporters of the campaign include former Federal Communications Commission chief Nicholas Johnson, conservative political activist Phyllis Schlafly and Canadian children’s entertainer Raffi.
“The targeting of young children as the next growth market for the telecom industry is one of the worst ideas to appear in the American economy in a long time,” the group claims in the letter. “Despite the industry’s rhetoric, Disney and the telecommunications companies really want to use children as conduits to their parents’ wallets. And marketers want another way to bypass parents and speak directly to the nation’s children.”
The letter listed several specific issues, including the potential for child predators to contact children through mobile phones, a lack of parental control over billing, and concerns about health effects from radio waves.
Disney and Firefly declined interview requests but did submit prepared responses to the accusations. Both companies stressed the security benefits of their wares and said parental controls are a top priority for any wireless offering aimed at young users.
“Firefly Mobile agrees with the concerns voiced in the petition and had considered every point before going to market with (the phone),” said Firefly, which offers a colorful, kid-friendly handset with a five-key pad including two buttons with “mom” and “dad” icons. The voice-only handset doesn’t support text messaging or content downloads, the company said, and can dial only 22 phone numbers that can be programmed by parents. “In addition, advertisers cannot spam Firefly kids with promotions, predators cannot contact a child by randomly dialing numbers and kids cannot rack up huge bills … because the phone offers extensive parental controls.”
Disney, which plans to launch MVNO service next year, said it will market its new offering to families as a whole. “Our product, which will be for all members of the family including adults, is based on extensive research conducted to identify the needs and wants of parents for family-oriented mobile services,” the company said.
Commercial Alert cited other proposed youth-focused wireless efforts, including a Barbie-branded Mattel phone, a service from Enfora targeting children as young as 6 years old, and a Hasbro handset reportedly in development.
And Nader’s group isn’t alone in taking umbrage with how the industry is hawking its wares to youngsters. A San Diego man is suing Jamster, claiming the company fraudulently sold ringtones to his underage daughter. Jamster denies the accusations, but other content providers and messaging services have generated similar complaints.
But no letter-writing campaign or civil litigation is likely to deter the industry from pursuing one of the last remaining untapped wireless markets in the nation. A study released by iGillottResearch last month indicated more than 15 percent of U.S. tweens will own a phone by 2009. Wireless manufacturers and service providers will find success in the segment by offering a variety of tween-focused goods and services, according to Iain Gillott, the firm’s president.
“This study clearly shows there are significant opportunities with the tween segment, but that there are actually clearly defined sub-segments in this market,” Gillott explained.
Even more enticing than the sheer number of young wireless consumers is the way youngsters use their phones. Unlike middle-aged users, who often view wireless as simply a platform for voice, tweens and teens see their mobile phone as both an entertainment center and an extension of their personality.
Carriers that have successfully created a youth-focused image are enjoying substantial revenues from data services and content downloads, according to a study released last week by mobile usage measurement firm M:Metrics. The report revealed distinct demographic characteristics among the subscriber bases of traditional carriers and MVNOs. Virgin Mobile USA Inc., for instance, boasts a content-hungry subscriber base with twice as many 13- to 17-year-olds as the average operator, thanks largely to its partnership with MTV. Virgin users are twice as likely to download a ringtone than the average U.S. wireless subscriber.
