SAN DIEGO-It’s all about the money. And why not? That’s a healthy reason for hundreds of people to fly into San Diego and cloister themselves inside a luxury hotel, as the nearby sea beckoned.
When Paul Jacobs, Qualcomm Inc.’s chief executive officer, noted in his keynote address at the BREW 2006 conference last week that the company has paid $700 million to developers and publishers of BREW-enabled content and applications-double the previously announced payout-he received warm, sustained applause. Especially when he added that the sum represented a “drop in the bucket” of future revenue potential for BREW developers and publishers.
Of course, Jacobs’ audience consisted of a large heaping of developers who create the sort of consumer diversions that drive the business model Qualcomm made possible through its BREW technology. And the work of application development and content provision is, if not a labor of love, at least a way to monetize the elusive notion of “cool.” Who wouldn’t want a piece of that action?
Jacobs said in his opening day keynote address that his company is working on an application dubbed “Creatures,” which offers “contextually relevant applications,” geek-speak for mobile shopping, music and other applications that can take advantage of social networks and provide a role for mobile marketing. He spent a good deal of his stage time demonstrating the possibilities.
BREW 2006 felt like a healthy conference for a thriving technology with enough players to carry it forward into the future, “future” being a term used frequently by Jacobs in his address.
Of course, the show had its ironies. The conference, in deference to its laid-back Southern California environment, was largely a necktie-less affair. The only necktie in attendance, in fact, appeared to be the one worn by the rapper who preceded Jacobs onstage on opening day during the now-typical, pre-keynote, rock star-welcome that includes smoke, lights and pumped-up music before a middle-aged executive hits the stage.
Another irony: The hall packed full of self-professed geeks and business people-many if not most from a certain age demographic, shall we say-were actively searching for the kind of content and experiences that would tap the vast potential market of tweens, teens and young adults that will drive the data market. Clearly, however, some in the audience are tapped into the teen mind (if such a thing exists), as one technical session offered insights into “Dirge of Cerberus Lost Episode: Final Fantasy VII,” which presumably is weighing heavily on someone’s mind, somewhere.
As is typical of such conferences, at least one speaker rattled the cage.
John Stratton, a vice president and chief marketing officer at Verizon Wireless, said that after eight consecutive quarters of growth in downloaded ringtones and games, progress has stalled.
“Fundamentally we have not changed the BREW platform,” Stratton said. “It’s time to evolve. The [mobile phone] deck is way over-crowded.”
He suggested that operators, including Verizon Wireless, needed innovative marketing and merchandizing approaches. For its part, Verizon Wireless plans to create an online “BREW Zone” to enable off-portal content purchases and allow keyword searches that turn up focused results based on the user’s known or selected preferences, rather than lengthy lists of content that present opaque options to the user, Stratton said. Verizon Wireless is BREW’s most visible partner in the United States.
In a breakout session Seamus McAteer, senior analyst with M:Metrics, noted the “insatiable demand” for real market intelligence on the demographics of mobile content users-the actual drivers of demand for the technology and content discussed at BREW 2006. And he supplied it. Eighteen-to-24-year-old students are the main data consumers and represent 16 percent of the BREW market, he said. Half of all BREW subscribers are on family plans, with the tab paid by parents. BREW developers can reach 86 percent of current 3G users, who are three times more likely to download a game than 2G subscribers. McAteer forecast that as smart phones proliferate, with bigger displays and greater processing power, data consumption-which has slowed, his firm finds-would increase.
“Give people a bigger Coke can and they drink more Coke,” McAteer said.
In another breakout session on the second and final day, Iain Gillott, principal at iGillottReseach, offered a number of solutions for mobile content revenue leakage, where operators lose a significant slice of download revenue due to lack of enforcement of basic business rules and transparency in the value chain. Pre-authorizing transactions before delivery, authentication of the consumer’s identity and access limits can stem the losses, he said.
At the end of the day-an overused phrase in the industry-the biggest news was the $700 million payout and the money was the conference’s energizing factor. Prediction: Developers will be pounding out code this week, looking for a piece of the action.
