Make Mobile Content Work

1. Make Mobile Content Work A Tale of Many Parties, Partners and Paradigms with a cast of 160 characters, enhanced by pictures and images!

2. Mobile Content • Handset Personalisation: • Ringtones, logos, wallpaper, java games – phone furniture • Information and Entertainment: • news, weather, share prices, sports updates horoscopes, jokes, trivia, pick-up lines : general broadcast alerts (info and entertainment) • “what did this house sell for last?” “What is the price of AMP shares?” : tailored information services (premium) • Reminder services (partner’s birthday, pick up car from service etc) : personal alerts

3. Where is the content value?

4. Content Licensing Body $0.33 $1.20 $3.00 $0.10 Content Owner $0.30 Who makes money now? Result: $0.47$1.20 less SMS cost (10c), content (30c) and licence (33c) Result: $1.89 ($1.90 less SMS cost (.5c)

5. Sales and Delivery

6. Limited Stats on the Market • 4B SMS messages are sent from 13.8M handsets (289 per user) • 7M people each send on average 44 messages every month. • Almost all had heard of MMS, with 50% expressing interest in using it in the future. • 50% will upgrade their handset within the next two years. • 32% Australian mobile users have internet enabled handsets. However most are not MMS enabled. • 97% had never used photo messaging, (World avg. 95%) Telco consultants AT Kearney, in conjunction with the University of Cambridge, surveyed 5,600 mobile users in 15 countries, including 374 Australian users in April, about their use of SMS, photo messaging and plans to upgrade their handsets.

7. The Content Chain Content Partners/ Providers ABC, f2, Yahoo, Reuters, AstroZone, C7, EMI, etc Content Aggregators InfoSpace, Legion, HWW, i-Touch Reuters, Legion, AAP, SportsData, HWW etc Technical Provisioners Mobile Operators

8. Content Partners/Providers • Primary content creators or owners of license rights to content • May include content aggregators (with license to sell content) • Brands add value (ABC, Fairfax, Yahoo, Sony, ASX, Dow Jones etc) • Low percentage revenue deals may hinder content creation • Some fixed costs (may require revenue minimums)

9. Brand names add value and credibility Brand names allow for joint promotional opportunities Brands and exclusivity – a thorny issue License costs for branded content higher (from 10c for unbranded to $10,000 for branded) Branded entertainment (games, images, music) much higher – royalties up to 80% of revenue Consumer comfort/interest high Value Proposition - Owners

10. Content Aggregators • Manage multiple content partners/ providers (and may create themselves) • Services include sourcing, reporting, formatting for multiple streams, quality control and cross referencing • May include delivery or management of subscriptions (technical provision) • Seek new channels to market for content partners • Rev % or fixed rate (slice of CP deal)

11. Can add value by combining content to create new content Multiple outlets for single content input (buy once, sell many) Good quality control is critical (and rewarding) Requires management both up and down the value chain Revenue usually as percentage of content or cut of monthly minimums Value Proposition - Aggregators

12. Technical Provisioners • Manage subscriptions to services • Can create content; often content aggregators as well as delivery • Can be mobile operators (Telstra PocketNews, VLive!) • Validate delivery and sometimes provide charging, credit control, opt-out list management, timing, etc • Usually fee per item delivered (from 3c -> 90c), subscriber etc

13. Often bundled with the cost of content Receive a clip on message costs (higher MMS, lower on SMS) Increasingly requires good subscriber management (esp. ppt-out lists, time of delivery control, expiry of delayed messages etc Customer service key Content Provider Content Provider  Content Provider Content Provider  Alternative Primary Content Provider Content Aggregation Partner Content Provider Delivery/Technology Partner Content Delivery Value Proposition - Delivery Content Provider

14. Mobile Operators • Access to content (SMS pull, WAP, MMS, Browse, Voice delivery) • Providers of stable content transaction environment • Providers of payment mechanism (through premium rate SMS/MMS, GPRS etc) • Welcoming environment for the content chain to use – and get value from

15. Knowledge of formatting for medium – use of images, sound, text Know when gr8 will gr8 or be OK Single content provision can go to multiple sources in different formats Partnerships • Add value through merging content to create new content • Streamline payment (can be irregular from carriers)

16. Partnerships • Legion and the ABC: • Legion buys ABC content and provides this to Vodafone Live! • Legion formats content to correct specifications, manages quality • ABC buys Legion services to deliver ABC on Your Phone info alerts • Legion builds intelligent engines to parse ABC content (NSW State Elections, Live Budget commentary etc) • Joint development into interactive TV (FCM)

17. ABC On Your Phone

18. Revenue Driver - ABC • Use of Premium Rate SMS for subscribed content (micro payment) • Sale of content to other parties (notably carriers, Vlive! Telstra, Orange etc) incl. some via content aggregator • Free sample content as trial • Program linked (CNNNN, Kath & Kim) • Used mobile for real-time TV tie in (Fat Cow Motel) • Entertainment content (RTL) also provided as revenue generation

19. Partnerships • Legion and HWW: • Legion buys HWW content and provides this to Vodafone Live! (entertainment) • (HWW also provides their own content to Vodafone Live! – TV and film) • HWW partners with Legion to approach portals (9MSN, Yahoo etc) to manage subscribers and content • Legion provides a ‘gateway access’ connection for HWW to push messages out • Legion brings content request to HWW to consider (and HWW bring message needs)

20. Ringtones and Logos • Mono ringtones and simple images readily available at low cost • Polyphonic sounds more costly but currently 50% of RT revenue • Both above licensed through APRA/AMCOS (avg 11% of rev) • RealMusic next – requires license from record companies • Revenue varies but from 50% to 80% of income

21. The Consumer Experience • Spontaneous (one-off) – premium rate SMS, premium rate IVR, SMS pull • Ideally uses some form of payment linked directly to the content supplied • Planned (limited duration) – web or email subscription, SMS or IVR • May use per-pay for content (1900, Credit Card) or prSMS linked to content • On-going Subscription (open ended) – web, email or IVR • Provision to cancel suggests that payment linked to content supply preferable. Block purchase difficult to monitor and refund

22. The Supplier Experience • Australian market is small (consumers) and content is expensive. Revenue shares (30% or so) don’t generate profit • Carriers are caught in this as well, and are reluctant to experiment • Most new media content is provided through closed systems which protect carriers more than provide opportunities • Partnership between carriers and aggregators/provisioners are critical (esp for quality control and management) • More open access required

23. Vodafone Live! – walled garden • Requirement for minimum phone standard (colour, MMS, Java, poly) ensured good customer experience of Live! • Single platform for content providers to deliver to – regardless of content format • Rendering to phone based on handset capability (in theory), including alerts • New content vetted, promoted and ‘guaranteed’ by Vodafone (quality) • Global purchases of content provided foundation (games, ringtones, sports) • Local supply gave regional ‘flavour’ • VERY difficult for 3rd parties to gain portal access • Low revenue share rates to content providers (revenue minimums)

24. I-Mode - bit pipe • Predominantly third party provided content • Not vetted or approved by I-mode • Generous revenue shares (85%+) on content • Specific ‘i-menus’ point consumers to i-mode preferred sites (most useful content) (can affect revenue share) • Carrier promotion of content has dramatic affect on consumer take-up (46% of usage on 5% of sites selected through the i-menu) • Encourages content providers, portal creators and developers – and importantly – rewards them • Also encourages promotion of services by the content creators in addition to that from carrier

25. The Ideal World Environment providing migration for customers through walled garden (Vodafone Live!), bit-pipe (I-mode) to open access.

26. Value Adding • You send your bookie a bet on the 3:15 at Flemington (Race 6, Flemington, Horse 4, $100 Win Only) from your (pre-existing) account • Your bet (and odds) are confirmed via SMS • As the horses line up – your phone rings. • You answer and listen to the race being called live while you are on line • You are sent a picture of the finish and confirmation of your stunning victory • Money paid back into your account

27. Value Adding • You stand outside a house with a For Sale sign on it. Interested? • You send an SMS with the address of the house to a premium rate number • (Fuzzy logic used to handle spelling and second question to handle variations) • You get back • a) the date the house was last sold • b) the price it sold for • c) whether there has been a DA since then • Subsequently, once the houses sells, you are sent the auction results automatically

28. Value Adding • Using your phone, you access your preferred mobile portal • You are interested in Rugby World Cup • You want alerts? Tries? Half and full time results? Standings only? Next matches? • Would you like a ringtone with that? Maybe a country anthem? A team logo? • How about accessing the m-commerce area to see if there are tickets to the game available? • Want to pay via your phone bill? Why not!

29. Instantaneous Spontaneous Data device for text, images etc NOT a TV screen in your pocket! Ubiquitous Valuable Personal Upon request Unlimited Mobile Content

31. Mobile content – works nowand can work even better Jennifer Wilson Custom Solutions Legion