mobileYouth 2006 -- It's Social, Stupid
The Wireless World Forum has released its 196-page mobileYouth report for 2006, with the press release trumpeting the statistic that children would spend almost $30,000 on mobile services over their lifetime, although there is a lot of interesting stuff in the report...this is some of it.
The figures (for future lifetime value of UK customers) break down as:
Aged 10 -- $27,996
Aged 15 -- $27,198
Aged 35 -- $13,368
Aged 50 -- $5,364
So someone who is 35 has a higher ARPU than a teenager, but has already spent half of what they are going to spend in their lifetime. I guess the lesson here is to get in early with the kids so they keep using your service as they grow older.
At one point the report claims that personified handsets (ie, those that have been named) are easier to market because "emotional branding associated with naming handsets makes a product range more appealing to mobileYouth than would a feature-branded handset". Rokr’s big secret to success may not have been the features but the fact that it was given a name rather than a product code.
The report decries the frenzied search for the "killer app" or "next big thing", claiming that "our energies will be inevitably exhausted by chasing trends". Instead the industry should be asking "What do mobileYouth love?" and "What role does the mobile phone play in the social universe of youth?" to produce better products and marketing (with a corresponding higher chance of success in the marketplace). So for example, mobile TV must "redefine the social, rather than viewing, experience". And for mobile music: "Music is a good example of how the opportunity is either overlooked or misread by its stakeholders. Instead of using the mobile channel to enhance existing behavioral patterns associated with music – i.e. sharing of opinion, collective shopping with peers, the role of the DJs and artists in informing the public – the music industry seeks to maximize revenues through using the medium as a sales channel."
Another interesting statement: "The quest to fill 'niche time’ is the preserve of an industry that has yet to fully understand its own potential value." Basically, the mobile content industry is saying that its product is so crap it can only compete with boredom. However, this isn’t the case, as a survey given in the report shows:
This is especially true for kids, since they don’t have control of their home. A decade ago if mum was watching TV, dad was on the phone and someone else was using the computer there wasn’t much a kid could do about it (I read books, but I hear that isn’t common). Now they have their own mobile phones, which they can use for entertainment and to communicate with friends. When they’re away from home they’re more likely to be doing something else...
Some final statistics..."538 million youth aged 5-24 owned a mobile phone in 2006. Emerging
markets fuel growth in the mobileYouth population. Annual ownership figures are rising by just
under 100 million. In 2004, Western Europe was the largest market in terms of mobileYouth.
However, Western Europe will grow only 11% between 2004 and 2007 with South Asia, by comparison, reporting rates of 694% for the same time period. By 2007, Western Europe will rank 4th, behind China region, Latin America and South East Asia Pacific...mobileYouth will spend $130 billion on mobile services in 2006, a rise of 11% on 2005 figures. Western Europe, North America and North East Asia account for 58% (or $75 billion) of the entire global market. Youth spending on mobile is rising by an average of 11% per annum. Asia and the Rest of World combined fuel a large proportion of the global growth, with growth rates in 2006 of 16% and 20% respectively. Europe provides the slowest annual growth rate of just over 4% annually, North America with 7%."
In-Stat claims mobile users are beginning to accept video, although not as fast as they accept music...based on a survey of over 1,000 US mobile users. Interest in mobile video has increased over the last three years, and now 14.2% of respondents "could be considered likely adopters of mobile video". It’s not a large percentage, but it is a large user base...In-Stat goes on to forecast that revenue from mobile video for entertainment purposes could grow to over $6 billion per year by 201. Compare this to $5.6 billion by 2009 (Infonetics).
Also, "44% of respondents who own music-playing handsets have not added any music files to their phones", so 56% have, even if it’s only a ringtone. In-Stat claims streaming music is more popular that streaming video. Streaming music uses less data than video and has an easier time of copyright and DRM issues than downloaded music. "Streaming music, which could be marketed like satellite radio services, such as XM and Sirius, holds the most interest of all mobile multimedia for consumers, and it may be easier to deliver than video," said David Chamberlain, In-Stat analyst.