Like European missionaries of centuries past, Bango came to U.S. shores last week preaching the gospel.
The Cambridge, U.K.-based company held events in Southern California and New York to tout the benefits of branded, off-deck mobile portals. Wireless operators, mobile marketers and technology companies joined Bango in recruiting U.S. businesses looking to establish relationships with consumers directly through mobile phones.
While mega-brands like film studios and professional sports leagues can easily leverage their way onto carrier decks, small- to mid-sized content providers often have had to go through off-deck aggregators to sell their wares. Bango, along with allies including Cingular Wireless L.L.C., Enpocket Inc., go2 Directory Systems, The Hearst Corp., Sun Microsystems Inc. and Volantis Systems Ltd., aims to help third-party brands reach consumers with a branded portal for mobile content.
“The carriers really focus on content brands that have mass-market appeal,” said Anil Malhotra, Bango’s vice president of alliance and marketing. “These (companies at the events) are the guys who aren’t going to be especially appealing to the carriers.”
Bango has made substantial headway in Europe, where carriers have been more open to allowing third-party content on their networks. The company delivers content through O2 plc, Orange S.A., Telefonica S.A. and Vodafone Group plc, and has notched relationships with such noted brands as Maxim, Manchester United Football Club, MTV Networks and Playboy.
Buongiorno Vitaminic S.p.A. is taking a slightly different-if more balanced-approach. While the Italy-based company works to place content on the decks of European carriers, it is gaining traction among U.S. users as a content aggregator. Buongiorno, which until recently did its American business through its DirtyHippo.com storefront, last week re-branded its worldwide consumer-facing Web sites as Blinko.com.
Much like Jamster, its primary competitor in the United States, Blinko.com sells ringtones, images, games and text-messaging services to mobile users via a subscription model. But while its direct-to-consumer operation has gained considerable market share among U.S. consumers since its launch a year ago, Buongiorno’s Burton Katz concedes the opportunities for aggregators are narrowing.
“Clearly, there’s a role for an aggregator to handle everything” for a carrier, including digital rights management issues, formatting, billing and other issues, said Katz, who heads Buongiorno’s U.S. business. “Nonetheless, the one area of the value chain that is getting squeezed on the margins more than anyone will be the aggregators and service managers.”
Licensed content may be the most challenging play for aggregators. Major music labels are already partnering with carriers directly to gain larger revenue shares, and operators are cutting direct deals with high-profile TV shows and other media brands.
So Katz is working to broaden the company’s offerings. Buongiorno has executed mobile marketing campaigns with Coca-Cola Co., Mentos and Miller Lite, and it is working to place offerings on U.S. carrier decks, which still represent the prime real estate in mobile content. And the company is focusing on creating mobile communities and establishing user-generated content services that could be driven by advertising revenues.
But Buongiorno isn’t planning for its aggregator business to slow down anytime soon, Katz said. The company hopes to sell content bundles and create cable TV-style subscription packages that allow users to receive regularly updated content based on themes or brands. The key for any content provider will be to market their wares effectively, according to Katz.
After all, even prime deck placement and a portfolio of A-list licensed content aren’t ensuring success for some providers.
“You have a number of people in the U.S. on the WAP deck, who even though they’ve built up a nice position … are trying to look for where their next growth opportunity is because the revenues are flattening,” said Katz. “My warning is that direct-to-consumer is not the consumer. To compete you need to be successful in direct marketing. If you’ve been focused primary on the telco deck, it’s going to be very challenging to compete like that.”
