After an unusually fantastic lunch, which consisted of London broil of some kind of delicious fish and fresh Caesar salad, the second half of Day One at The Off-Deck Conference in New York City was just as hot, humid and informative as the first. Speakers from MTV U.K., U.S. Cellular and Baker & McKenzie stuck out as the afternoon's show-stealers. Here are some highlights:
MTV U.K.'s head of interactive, Matthew Kershaw led things off with a presentation entitled "Why MTV went Off-Deck." While Kershaw wouldn't comment on MTV's U.S. operations, he gave some insight into the networks off-deck move across the pond: "We went off-deck for three reasons: Handset penetration, even though the numbers start to level out around 2006/2007 … pretty much everyone has handsets capable of [cruising the mobile Internet]… and off-deck spending has increased in the same proportion." The second reason is the short tail problem, which I call "the window shop problem--see that tiny little shop front window? A ridiculous percent of the [on-deck] traffic only sees" the content that is positioned high up on the carrier's WAP deck. The third reason MTV U.K. went off-deck was that it "didn't have control of [its] content when it was on portal--couldn't control what was on there, rewards schemes, pricing and it couldn't engage with the customer like [it] wanted to."
Kershaw continued to extend his window-shop metaphor by referring to off-deck portals as equivalent to retail stores: "This is the way I refer to [the off-deck strategy]: The Prada Strategy, because it was one of the first great retailers to create fantastic flagship stores… go inside and that's where you get the full experience of Prada… and the thing about these stores is it really enhances the brand. We wanted to adopt a Prada model, where we have our flagship stores. That doesn't mean Prada stopped selling their make-up and things in other department stores, but Prada was one of the first retailers to insist that they can control their merch when it's located in other stores." Kershaw's point is off-deck strategies shouldn't preclude a content provider from offering on-deck content too, but it'd be ideal if the provider could have some control over the content when on-deck.
Next up, U.S. Cellular's senior director product development and management, John Cregier laid out the basics of the off-deck discussion and reminded all players to think long-term by concentrating on growing the market as a whole, and not think in terms of short-term profits. Cregier, like many at the show, referenced Apple's iPod and pointed to it as an example of a market (digital portable music) dominated and overseen by one company (Apple. Keep up with me here). Cregier's suggestion was that although the off-deck mobile content market will be more fragmented than, perhaps, on-deck ones, which each carrier oversees and controls--the guiding reference point should be the consumer. Like a ballerina that doesn't get dizzy because she always keeps coming back to the same visual reference point as she spins around, the off-deck market need only keep its eye on the consumer. While a bit drawn out and somewhat naive, it's a lesson that begs reminding time and again. Do consumers really want these services? How do they want them and how can we as an industry keep tabs on what they want?
Closing out the day with a few laughs about his Beatles-styled hair, Samuel Kramer of Baker & McKenzie finished strong with an overview of laws, regulations and best practices that affect the mobile content industry. The most memorable example referenced an online gambling bill currently before the Senate, which could iron the issue of gambling on a mobile platform as well: "Take an off-deck gambling site that can be accessed by a mobile phone, well since the carrier's network allows you to connect to that, if it's illegal to connect to it under existing gambling laws in some states, the carrier's infrastructure could be seized" as illegal gambling paraphernalia. While, such an event would be absurd, the truth of it certainly means "most carriers are going to steer clear" of mobile gambling in the short term. Kramer also posed the lawyerly question of whether a mobile gambler on a train from New Jersey, where mobile gambling is legal, let's say, to New York, where it is not. The gambler places his bet when in New Jersey, but wins the pot just after crossing the state line. These are issues that need examining, according to Kramer. - Brian
FierceMobileContent is coming to you live today from the Off-Deck Conferenceaggregators will continue to be an integral part of the mobile content value chain, even if off-deck portal ubiquity comes to pass--"You won't be an afterthought," Cohen promised gravely. Cohen then called the music industry "complacent" when it comes to mobile music--or rather, "ring tunes" was the precise term he used. Did I miss the "ring tunes" shift in vernacular memo? Others here are saying it too--it's driving me nuts. As a closing teaser, Cohen leaked that a prominent video content provider based in San Francisco is planning on launching a service that makes some of its video assets available to users who can them mash-up and breathe new life in them. Any ideas whom he's referring to? in New York City. Despite the stuffy conference room packed with 100 or so mobile content providers, carriers and aggregators, the Off-Deck Conference has so far yielded some interesting tidbits. Conference chairman and former EMI executive Ted Cohen set the day's tone with an assurance that
Next up came VP of strategy and business development at BET, who was apparently a pinch hitter for BET Mobile's EVP and CFO Scott Mills, so I apologize for not having his name handy. The exec reiterated the profile of the average BET viewer: He's 56 percent more likely to have a Web-enabled phone, is part of the highest voice and data consumption segment and the frequency with which he updates his handset is twice as higher as the general population. Despite those figures, BET, like MTV, didn't pursue an MVNO because "it was too far of a departure from [their] core competence and [they] didn't want to commit that much capital to such an enterprise." According to the speaker, BET's transactional volume for mobile content doubled thanks to its shortcode-equipped television spots during music videos. Since the launch about 85 percent of ringtone sales have been driven by the TV spots, while 15 percent have come from BET's online portal. That's quite a spread, but by no means surprising. Despite those impressive figures, the speaker said if BET was to remove those commercials from the air, the traffic volume would continue to grow for those shortcodes because users are familiar with them now. BET's plans for the future center on a MySpace-like community space, which the company believes to be the "secret sauce" of mobile data. Such a platform would include a dating service, picture sharing and file sharing. There was also some vague talk that the network was "aggressively on the hunt" for location-based services.
Sprint's director of planning and programming John Styers was the last speaker before deadline--and by far the most interesting. A carrier at an Off-Deck Conference is likely to steal the show. Styers broke out next steps for carriers, aggregators and content providers. Carriers need to provide more APIs to aggregators, put services in place to stop revenue leakage, refine and consolidate so that aggregators don't have to transform content into five or six different types so that it integrates with each individual carrier. First and foremost, the carriers need to build out the proper infrastructure to support these services. Styers had some stern words for content providers that stretch the rules and standards for best practices: "It takes very few people to cause havoc in this industry--it makes everyone look bad." Styers added, "You're very fortunate we don't have the capability of charging these things back to you." He also assured content providers that carriers aren't looking to get into their business--"We want you to reinvent the world…we have four or five people in total working on off-deck capabilities." Styers predicted that the U.S. would not mirror Europe's off-deck marketplace, which claims 70 percent of mobile content is sold off-deck, "but it will go a huge leap from where it is today--and we recognize that." Styers had less advice for aggregators: Tighten up billing and if you have a mobile community service, do the carriers a favor by incorporating 24-hour monitoring into your cost structure. Styers also said he's personally against free giveaways for mobile content promotions since he believes a user has a monthly appetite, a finite one, and if you give one ringtone away, it's just one less you're going to sell that month. - Brian