For mobile content, it’s time to get sober

The bloom is off the rose. And maybe it’s about time.
A longtime stage for all sorts of hyperbole, the CTIA I.T. conference this year is different. If Monday’s pre-show events were any barometer, those of us in San Francisco this week are in store for a sobering look at the world of mobile content, applications, and advertising.
Which, for this show, may actually be a refreshing change.
Mobile data services are, indeed, on the uptake. But the industry is light years behind the forecasts of a few years ago:
–Ringtone revenues in the United States are expected to be down for the first time since the market appeared on the radar, according to figures from BMI. And full-track mobile music offerings are stagnating thanks to onerous charges, mediocre handsets and DRM “solutions” that are anything but.
–Mobile gaming continues to gain ground slowly, but struggles to move beyond the “golden nickel”: the 5% or so of users who actually pay to play.
–A February study from M:Metrics found that there are 19% more former subscribers of mobile TV services in several European markets than there were actual subscribers. Even in these early days, more people are turning off than tuning in.
–A report released earlier this year from Forrester Research indicates that the market for mobile enterprise applications will arrive in 2013. That’s right. Five years from now.
Even the carriers are expressing skepticism at the mobile data market. While uptake is impressive, “Customers haven’t really shown us they have a willingness to pay for these types of services yet,” Mark Collins, AT&T Mobility’s VP of consumer data, said during Mobile Entertainment Live Monday.
The much-hyped off-deck space is even worse. Third-party vendors are suffocating under onerous revenue-share models, a lack of innovation and horrendously sloppy accounting systems. “Even though you may have a higher conversion rate, it doesn’t always trickle down to profit,” according to CEO Brian Casazza of 9 Squared, a ringtone vendor and subsidiary of the global content giant LaNetro Zed.
And the advertising that’s expected to help pay for many of these services? It appears that consumers may be warming to mobile come-ons, but there will be a steep learning curve for carriers and their marketing partners. Consumers may accept ads on their phones, but-thanks largely to the Internet-they will demand high-quality services at substantially reduced rates in exchange.
So walk the show floor. Marvel at mobile video-conferencing, bulked-up handset memory capabilities and the eye-popping graphics of next-generation games.
But this year, grind down your tipping points and put hockey-stick forecasts on ice. Because for the players in the mobile content and applications space, it’s time to sober up.