Fox Mobile Entertainment is joining the ranks of wireless aggregators, unveiling a Web site that hawks music, games and images for mobile phones.
But analysts say the News Corp. subsidiary may be lumbering onto a shrinking playground.
Fox last week launched Mobizzo, an Internet storefront featuring branded content from hits such as “Family Guy,” “Napoleon Dynamite” and the upcoming “Ice Age: The Meltdown.” The site also offers ringtones and images from Warner Music Group and other labels, and games from mobile publishers I-play and Airborne.
The company also said it has opened a studio to create mobile-exclusive content aimed at teens and young adults.
Mobizzo content is available through both subscription and “a la carte” models, and is being offered to subscribers of Cingular Wireless L.L.C. and T-Mobile USA Inc. Fox said more carrier agreements are in the works.
“The mobile market is exploding, and it makes perfect sense for a media company like ours to create a real content destination for the billions of cell-phone users around the world,” said News Corp. Chief Executive Officer Peter Chernin. “From Fox television and movie properties to original content produced directly for the mobile audience, we think we can create a unique and compelling mobile entertainment offering and deliver it directly to the consumer.”
While Fox brings an impressive content library to wireless, the move to act as an aggregator is surprising. Mobizzo is expected to compete against established content vendors including VeriSign Inc.’s Jamster and Buongiorno Vitaminic’s Blinko in a market some say has already plateaued as revenues flatten from ringtones and major brands look to reach wireless users directly.
American Technology Research analyst Albert Lin added fuel to the ringtone pyre last week in a published report, saying VeriSign’s mobile content business is “looking like a disaster.”
Lin downgraded VeriSign to a sell rating, citing lagging sales in ringtones, which account for as much as 90 percent of sales through the Jamba and Jamster Web sites. The market will continue to explode in usage, Lin said, while revenues decline and eventually disappear as users learn to create their own ringtones on computers, digital music players and mobile phones.
“The mobile ringtone industry has peaked and will likely see rates of growth decline (and then go negative) as activity will be concentrated in convenience-based sales that are generated from the phone (spontaneous purchase) as consumers quickly figure out almost any tone that is commercially available can be ripped and taken without charge,” wrote Lin. “We believe getting out of the ringtone business would be a positive move (for VeriSign) and we would reconsider our opinion.”
Indeed, Los Angeles-based Xingtone has long offered a $20 software download that allows users to create ringtones from any piece of digital music, and other sites tout free software that can convert ringtones from one handset to another. And a handful of artists in the United Kingdom have included similar software with their digital recordings, effectively throwing in a free ringtone with their singles.
What’s more, the growing popularity of devices with removable memory facilitates the exchanging of music clips and other mobile content.
“The consumer comfort level with interfacing a portable device to the PC is skyrocketing,” Lin wrote. “If you figured out how to use an MP3 player/iPod, digital camera, or Flash card, then getting a ringtone for free is a snap.”
Other vendors report increased sales, however. 9 Squared Inc., a subsidiary of European mobile content giant Monstermob Group, said it has seen steadily increasing revenues from its Web site, The Mob USA, which launched several months ago.
“What we’re seeing on that side is that there’s quite a bit of traction,” said 9 Squared Chief Marketing Officer Ted Suh. “We’ve been growing very consistently over the past three months.”
And while Suh concedes homemade ringtones are an increasing threat, there are ways for content providers to differentiate themselves and offer products that can’t be produced elsewhere. 9 Squared teamed with Eminem to promote mobile music in December, and the Denver-based company has inked a handful of deals to produce exclusive content from artists including rapper Mike Jones.
“We’re hearing a lot of positive reaction from the label partners we’re working with,” said Suh. “We’re working with them very closely to synch up what kind of imagery their artists want to be surrounded by.”
If there’s any room for a new player in the aggregator market, Fox seems likely to find it. The company said it plans to back its new site with a multimillion-dollar marketing campaign, and Fox said the storefront eventually will hawk video clips as 3G handsets gain market share.
And while Jamster, Blinko and The Mob may be unfamiliar to most wireless users, Fox’s name and portfolio may be enough to lure users from other sites and attract others who never have downloaded content.
The news “definitely strikes a chord; I know Fox is very serious and aggressive in the mobile space,” Suh conceded. “I think there’s still some room (in aggregating content). It’s still very early in this game.”
