The myriad of startups on the user-generated mobile video playground seem to be attracting impressive numbers. But turning those consumers into dollars may be more difficult than acquiring them in the first place.
Mywaves, a Sunnyvale, Calif.-based outfit, scored its first carrier deal last week, gaining placement on the deck of Alltel Wireless. The company unveiled a $4-per-month BREW application that allows users to access both user-generated videos and professional programming from the Internet.
The service complements mywaves’ free, direct-to-consumer offering, which couples a Java-based downloadable application for mobile phones with a traditional Internet site for PC use. The company claims to have recently bagged its 1 millionth user for the offering, which provides access to more than 100,000 channels to consumers in 150 countries.
Such uptake has surprised even mywaves’ front office, according to Susan Cashen, the company’s VP of marketing.
“I thought we’d need a little more time in the market to figure out how to acquire users. In this situation, I’m happy I was wrong,” said Cashen. “When we launched our service, we were looking at a run rate of 20,000 or 30,000 users a week. Today we’re seeing that kind of acquisition on a daily basis.”
And most users aren’t just checking in for the occasional look-see: mywaves delivers up to 2 million video views each day, according to CEO Rajeev Raman.
Small players multiplying
Mojungle, a once-floundering startup that late last year was up for auction on eBay, is also gaining traction, if on a much smaller scale. The company was bought for an undisclosed sum-Mojungle’s original owners reportedly failed to secure even a $60,000 opening bid-by Steven Isaac, CEO of a technology firm that serves the insurance industry. COO Matthew Abbitt declined to disclose hard figures, but said Mojungle’s network of users has grown 75% since the February acquisition.
Mojungle allows users to post photos as well as videos, and has more in common with the Internet’s Flickr than mywaves, which serves as a kind of mobile YouTube. And while Mojungle’s’ users likely number in the hundreds-rather than the hundreds of thousands that mywaves boasts-both startups are using viral marketing to acquire users. Mojungle has developed an application that integrates with the popular Facebook site, and has launched a marketing campaign through MySpace. Mywaves offers a downloadable player that can be embedded in MySpace pages or blog sites to allow users to share their favorite videos.
Others players in the user-generated mobile video space include Zedge.net, Mobango, Tinytube, Mocospace, Mymobileclips, and Abazab, to name just a few. While nearly every entrant is hoping to generate advertising revenues, Mojungle is also looking to license its technology. The company is in talks with businesses from several different industries that are considering using the proprietary software.
“We had one (company) from the agricultural industry that was dealing with crop production levels and that type of thing,” said Abbitt. “They want to be able to take pictures of the crops and forward them to the correct person. There are things you would never think of.”
Traffic is key
But nearly all the startups are more concerned with driving traffic than with selling software. Mywaves will look to start generating revenue from its direct-to-consumer offering this fall, partnering with mobile advertising firm AdMob to deliver click-to-video campaigns to viewers. The company will continue to pursue both on- and off-deck strategies, Cashen said. And mywaves will likely begin charging content partners for premium placement as well as offering premium content in addition to the free, streaming video available now. “We feel like there’s a way to deliver premium content where users can buy videos if they choose, whether that’s exclusive video, content from exclusive brands, or adult content,” she explained. “We think there are revenue opportunities there.”
Giants rustling
The small mobile players are on the clock, though, as established Internet behemoths lumber into wireless. While pure-plays experiment with new features, business models and marketing tactics, MySpace and Facebook are working to expand their reach to users. YouTube last week launched a service that allows Verizon Wireless users to upload video clips directly from their phones, underscoring the leverage bigger players have in scoring carrier deals. And Nokia Corp. will spend nearly $100 million to acquire Twango, a Seattle-based social networking site.
So the wireless Davids not only must shore up their user bases to compete against the Internet Goliaths, they’ll need to begin to monetize that traffic quickly.
