More consumers are accessing various types of mobile content, but the
companies that deliver mobile content still face a slew of challenges.

Ask anyone involved in the distribution of mobile content, and you’re likely to hear they’re committed to making it easier for consumers to discover and access content. More often than not, these vendors are banking on mobile advertising to sweeten the deal, both for their own revenue gains and consumer uptake. And they’re working both with one another and, in some cases, against.

Executives in the mobile content space often say they don’t consider too many other companies as direct rivals. They’re all in it to grow the market for the greater good, filling in the areas that Google and Yahoo! can’t possibly cover on their own. (At least, not before an acquisition spree or two.) Still, consolidation is an expected outcome for myriad companies.

CHALLENGING SPACE
Those that do survive on their own face a lot of challenges. Internet desktop users can access an endless array of sites and navigate with a full keyboard and screen. Despite early attempts at more “open access,” not that many Websites are optimized for the mobile device. Many content providers and/or distributors are banking on niche content, which by its very definition means they’re not targeting a large population. And while the mobile Internet is expected to be bigger than the desktop Internet, that involves formatting content for thousands of handsets and multiple operating systems and carriers.

The multiple-device problem is one that many companies are tackling. Volantis, for example, now supports 5,000 devices worldwide, having added the Nokia N96 that was introduced at the Mobile World Congress in February. Late last year, Volantis announced it would publish its code under an open source license, so developers who use its solution will know their apps will work on U.S. devices and devices in, say, Italy. “The intention is to remove the barriers to the mobile industry,” says Dave Roberts, general manager at Volantis. The open source will be available later this month.

Quattro Wireless, which operates a mobile ad network, owns a handset lab where it can test thousands of variations and combinations. Developers also can use services like those offered by Mobile Complete, which allows developers to virtually test their apps against a host of physical handsets.

Mobile Subscriber Monthly Consumption of Content and Applications
	US	EU	FR	DE	IT	ES	UK	CN
Watched video	4.5%	5.3%	5.1%	2.4%	6.4%	7.7%	5.4%	0.9%
Listened to music	6.2%	16.1%	13.7%	14.8%	13.6%	20.3%	19.5%	34.8%
Accessed news/info via browser	13.0%	9.2%	9.2%	5.1%	7.8%	7.4%	15.9%	6.1%
Received SMS ads	19.0%	51.2%	64.6%	31.5%	57.3%	72.3%	37.3%	n/a
Played downloaded game	9.0%	8.5%	4.0%	7.7%	8.7%	12.7%	10.6%	10.0%
Accessed downloaded application	4.6%	2.7%	1.2%	2.1%	4.1%	2.5%	3.5%	2.4%
Sent/received photos or videos	21.4%	28.2%	25.2%	22.1%	32.8%	31.8%	30.5%	15.2%
Purchased ringtones	9.7%	4.2%	4.3%	3.7%	4.8%	4.4%	3.7%	4.4%
Used e-mail	11.9%	8.4%	6.5%	6.5%	10.4%	9.3%	9.5%	2.5%
Accessed social networking sites	3.9%	2.5%	2.1%	1.2%	2.2%	2.6%	4.3%	2.2%
Source: M:Metrics

SKIRTING THE BROWSER
Another big problem for content distributors is the lack of suitable Web browsers on mobile devices. Sure, iPhone users rave about its Safari browser, but that’s just one device. For the most part, “we are pretty well forced to rely on what’s already on that phone,” says Myk Willis, founder and chief technology officer at Myxer. “In terms of discovery, we use the desktop Web for the most part.”

Myxer, which offers a quick way for artists to distribute their ringtones and wallpapers, doesn’t offer consumers a software download, which is beyond the practical capabilities of most cell phone users, he says. SMS is a good way to skirt the browser problem – bands can tell fans to send a text to a short code and get directed to a place where they can download new songs.

Willis: The browsers restrict optimal distribution.

As for Volantis, its technology identifies the device and offers the best form of content for it, Roberts explains. For example, a device with a full keyboard and screen might get one form of rich content while an older model phone with fewer capabilities will get content in another format.

PAYING FOR IT
While a lot of companies are focused on discovery and ease of use, OpenMarket wants to overhaul the way transactions are handled – namely, getting away from what it considers a flawed SMS-based transaction approach. One of the company’s main missions is to bring financial integrity into the off-deck content distribution realm, according to Steve Shivers, general manager at OpenMarket, a subsidiary of Amdocs.

The way transactions occur today sets up the wrong type of consumer expectations, he says, and he’s hard-pressed to name any other industry where one party sells something, like content, and another party takes responsibility for it. For example, if someone buys a ringtone and they’re not satisfied with it or bought it by mistake, it’s the carrier that ends up resolving the situation. OpenMarket believes operators need to cede control over that part of the process to the content providers, rather than shouldering it themselves.

Among the company’s main thrusts are dramatically reducing the processing costs for operators and improving the transaction success rate so that it more closely resembles that of the wired Internet.

Smyth: We must simplify content access for consumers.

ON THE UP SIDE
Companies involved in the distribution of mobile content are encouraged by the $99 all-you-can-eat voice plans and moves on the part of some carriers, most notably Sprint Nextel, to include data in all-you-can-eat plans as well. But some of them in the off-portal world – an area where some nationwide carriers are increasing their involvement – point out that they’re driving a lot of the data usage themselves. In a large percentage of cases, Myxer is introducing users to the mobile Internet. “We are the ones that get them to use their data plans,” Willis notes. Myxer facilitates some 15 million downloads a month; about 95% of that is ad supported.

In terms of the types of content consumers are accessing, that often depends on whom you ask. Volantis sees a lot of demand for sports and news – things about which people want to receive on-the-spot updates. Ringtones have been around for a long time, but Myxer still sees a lot of demand for them. People like to customize their phones, and Willis says consumers’ appetite for ringtones continues to skyrocket.

Analysts indicate content is moving past the tried-and-true ringtones and SMS. In the last three months of 2007, 21.4% of U.S. mobile subscribers sent or received photos or videos; 19% received SMS ads; and 13% accessed news and information via a browser, according to an M:Metrics survey. About 11.9% used e-mail, and 9.7% bought ringtones.

“KISS”
Like the cliché “Keep It Simple, Stupid,” the mantra here is all about simplicity, whether that means pandering to consumers or advertising agencies. “We’re about making it really easy for the mobile consumer to access the content,” says Pete Smyth, CEO of iamota, which stands for “I am over the air.” The Vancouver, British Columbia-based company helps ad agencies access, interact with and sell to mobile consumers. The majority of U.S. cell phone users have text-enabled phones, so that’s where iamota is focused, although it can support images and video.

Albright: Access for iPhones sent monthly page views skyrocketing.

Among those trying to bring a 1-stop shop solution to advertising is Quattro, which works with brands such as CoverGirl, Gillette and Univision. Naturally, that means Quattro competes with a lot of other companies in various areas. “We do touch upon a lot of players in the market,” admits Lars Albright, vice president of business development at Quattro, one of several former mQube executives at the company. Yet, it’s also a promising market for a lot of folks. “It’s still a market that’s maturing,” with more advertisers repeating their buys or increasing buys in mobile, he adds.

Quattro recently partnered with CollegeHumor.com on the release of a new mobile Website specifically adapted for the iPhone; Quattro has seen a 323% increase in monthly iPhone page views on its network from September 2007 to January of this year, according to Albright.

Whether it’s improving the way content is delivered or how the players in the value chain collect their share of the revenue, plenty of companies are working on improving distribution. Now, it’s just a matter of boosting that uptake.