Dog Days of Summer?

Editor’s Note: Welcome to Reality Check, a feature for RCR Wireless News’ new weekly e-mail service, Mobile Content and Culture. We’ve gathered a group of visionaries and veterans in the mobile content industry to give their insights into the marketplace. In the coming weeks look for columns from Tom Huseby of SeaPoint Ventures, Mark Desautels of CTIA and more.
The ancient Romans spoke of the “Dog Days” of summer as a time “when the seas boiled, wine turned sour, dogs grew mad, and all creatures became languid.” If you’ve been following mobile news only for the past few weeks, you might understandably conclude such days were upon us.
In mid-July, content aggregator Oasys Mobile filed for Chapter 11. The end of the month saw mobile TV meltdowns on both sides of the Atlantic as U.S.-based Modeo exited the space with parent company Crown Castle selling off the spectrum it had hoped to use to power a nationwide mobile TV network, while BT and Virgin Mobile turned off the lights on their Movio service. Oh, and Amp’d Mobile performed one of the biggest belly flops in recent mobile history, eating up $400 million in financing and leaving Verizon with some $50 million in unpaid dept.
The reason behind the failure of these mobile companies has been explored in these pages and mismanagement has been a consensus diagnosis. While there’s undoubtedly truth in that assessment, these business collapses, as well as recent activity from companies “outside” of mobile, outline an important and highly dynamic moment in time.
Whatever the business particulars of Oasys’ situation, it’s clear they were playing in a difficult space: content aggregation. Once a sure-fire model for generating cash in mobile, the space is consolidating, the value has been commoditized and companies in the space are working to switch up their business models with mixed results. While rough for those who can’t thread the needle, this shakeup highlights the continuing evolution of the industry as early winning business models mature and then expire.
Modeo/Movio were each taken out of the race by parent companies that had bet big on the Field of Dreams model: They built it but consumers didn’t come. It doesn’t mean that there isn’t a breakout use case for mobile TV and video, indeed our data shows it has grown 23% from January to June of this year, but it does demonstrate that a sector which has been almost entirely driven by vendor push (as opposed to consumer pull) still has work to do. (I suggest a starting point would be to increase the ratio of consonants to vowels in proposed consumer brands.)
Lost in most of the stories about Amp’d has been an appreciation for how aggressive and experimental the MVNO was on the content side. According to M:Metrics data, before the shut down, Amp’d counted more content partners than any carrier but Verizon, with much of the content-Naked News, Match.com and PerezHilton.com, for example-importing Internet brands to mobile for the first time.
And that’s a hint about what’s happening more broadly in the mobile market: The Internet is coming. But it is about more than the Web, it is about digital convergence, long-promised and inexorably marching on, making our mobile phones much more valuable and expansive devices than ever before.
This isn’t happening because the giants of Silicon Valley have decided to join the party. This transformation is happening because consumers-I like to call them people-are increasingly leading lives that depend on accessing “their 1s and 0s.” The photos they take, the videos they make and watch, online banking, shopping, getting news, communicating with people they work with or love-all these dimensions are naturally finding a home on the most personal digital device in the world, the mobile phone.
The opportunity to profit from unifying people’s digital lives on a mobile device is immense, as is the risk to existing profits if companies, be they “mobile” or “Internet,” fail to do so. It all adds up to an exciting moment in mobile, but stay braced for continued turbulence. And as for the dog days of summer? I think they’re the cat’s meow.
You may contact Mark directly at mdonovan@mmetrics.com. You may contact RCR Wireless News at rcrwebhelp@crain.com.