Why It Would Be Good To Own Stock In Mobile Content Companies

18 09 2007

There’s a study that I just stumbled across, thanks to Frank W. Baker’s web site on Media Literacy, that was compiled by really really small cell phoneThe National Center On Health Statistics which includes an interesting factoid. It’s called “Wireless Substitution” and it charts and analyzes the growing movement towards cell phones away from traditional land lines.

I haven’t jumped into that pool myself for one simple reason — cell phone service is still so far inferior to cell phone service that I can’t rely on it. My joke is that when I was in Jordan I could get cell service in the middle of the desert. Back home, I couldn’t get it in my living room. In fact, I’m convinced that the reason AT&T could claim (in an ad campaign that they have recently dropped) that they had “fewest dropped calls” was because they had the fewest connected calls to begin with.

But it’s clear that we are becoming an increasingly wireless world. On my last several business trips, Internet service in my hotels was all wireless. No more lugging Ethernet cables around.

Anyway… the survey claims that nearly 12% of all people no longer have landlines and have moved completely over to cell service. The survey further claims that there is virtually no difference between adults and children in this regard (11.8% for adults, 11.6% for children, though the results definitely skew towards the under-30 crowd).

This is good news for those of us in the media creation business. Unlike the advent of home video (VHS and DVDs) no one is going to easily take pre-existing media and shove it onto cell phones (even if they are bigger than the one shown here). I don’t see millions of viewers wanting to watch TRANSFORMERS 2 on their Nokia or iPhone instruments (assuming there are millions who want to see it at all) (end of cheap shot). But many people will, clearly, want to use their cell phones for more than making and receiving phone calls. A look at the growth of smartphones, as well as the thriving (for now) ringtone market proves that.

The future is really going to be with the people who either create media specifically for this new distribution channel or who can specifically adapt old media for the new market. Fox tried it a few years ago with mobisodes of 24, to greater or lesser degrees of success. But people are already doing it themselves, and the explosion of the easy-to-use DV Tools market is only going to make it easier to do it.

Once again, the determining factor is going to be distribution — access to eyeballs. Companies like KBS (The Korean Broadcasting System), who are trying to partner with content creators for distribution to the sophisticated Korean market, will be the early winners (if they can keep the arrows out of their early adopter backs). But, if we’re nimble, the real winners will be the people who supply the KBSes of the world. Verizon will, very very soon, have their heads out of the sand, and be buying and creating content. It won’t surprise me if American companies choose to partner with television networks and major content companies, since that is a tried and true method. But, at least at first, there will be plenty of room for creative people to have their own wares seen by millions of people who no longer have a landline.

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6 responses

18 09 2007

In 1997, someone said Content is not King. Here is a version of their article rewritten in 2001. He thinks that communication amongst people and organisations will always trump content.

Still, the argument that “content is notking” that is presented here should not be taken to an extreme. All it says is that most of the money is in point-to-point communication. It does not say that content does not dominate in volume of data. Historically, as we have noted above, content has often dominated, and probably dominates now.

18 09 2007

I’d be surprised if the rise of wireless is good news for those in the content business. In 2001, cinema ticket sales amounted to less than $10 billion. Even if you add three times as much for DVD sales, the US telephone business took in $40 billion every eight weeks! Content may be glamourous, but the money is in communications.

19 09 2007

You raise a good point, but my point wasn’t really that it would be great for the cel phone companies (though I think it would be) or even that content would become as successful as the telecon side of things.

The point I was haltingly trying to make was that this would be a new and great new distribution channel for content creators. If you had a new market for your low-cost films that didn’t exist a year ago, I think that that would be a great potential for revenue.

16 01 2008
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