Moving target: Mobile content ripe for change

Many of the sexiest offerings in mobile content will continue to struggle to take flight in 2008. Wireless video will slowly gain steam in the United States, thanks largely to Qualcomm Inc.’s MediaFLO service, but carriers still must find the best ways to monetize on-the-go TV. Nokia Corp.’s Ovi and other third parties may help push full-track mobile services in Europe, but Americans will continue to sideload music onto their handsets – if they opt to listen to tunes on their phones at all.
Meanwhile, ringback tones will maintain their slow-but-steady progress as ringtone revenues slow from a plateau to a descent. Mobile gaming will once again fail to meet sky-high analysts’ projections, although ad-supported offerings will help buoy premium game sales, and overall revenues will pick up steam gradually. And while mobile social networking services will begin to move from early adopters to mass-market wireless users, carriers and other players will struggle mightily with how to cash in on the increasing usage without offending subscribers with intrusive advertisements.
Location-based services are likely to stand out as prime money-makers, however. U.S. consumers will begin to discover the simplicity and affordability of mobile alternatives to costly stand-alone navigational devices. Carriers and third-party application developers will leverage both GPS and cell-site information to deliver remarkably practical applications at irresistible prices. But as the garden walls continue to crumble, operators will wrestle with third-party developers such as Google Inc. and Yahoo Inc. to offer the best – and most lucrative – location-aware applications.
Many factors are at play in the content arena, of course, but the driving force – and the most controversial issue – in 2008 will be advertising. Operators will struggle with how to cash in on invaluable subscriber information without infuriating customers, while mobile advertisers will experiment with all sorts of ways to target users through mobile phones. Most importantly, consumers must find their comfort zone: How much are they willing to pay for each type of mobile service, and how much advertising will they tolerate to help subsidize it? While 2008 is likely to be the first year of much consumer backlash, look for users to opt for models similar to the Internet – which is to say, heavily subsidized by advertising – than premium services that cost top dollar.