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Matt Hooper, Vice-President of Marketing & Alliances at UK mobile content delivery software pioneer, elata, thinks that operators have a lot to consider when it comes to delivering and marketing 3G streaming content in 2005

The advertising and marketing blitz that preceded Christmas 2004 made it clear in no uncertain terms that consumer 3G services have well and truly arrived in the UK. And if the messaging was anything to go by, network operators are pinning their hopes on streaming content capturing the imagination of a subscriber base until now reticent to embrace next generation mobile technology.

‘Full track music downloads – live it!’ screamed 20ft posters in cities all over the country. ‘Watch music videos on your mobile – all the way through!’ chanted faux-Japanese animated characters in peak rate TV advertising slots throughout December. The point they wanted to get across was this; with 3G, you can use your phone to consume content in ways not possible on 2.5G networks, whether it’s listening to music or watching video on your handset. More bandwidth transforms your phone into a lifestyle accessory.

ARC Group estimate that the mobile video market will generate worldwide revenues of $5.4 billion by 2008 – but 2008 is a long way off. Are current 3G services really going to usher in a brave new world where rich content such as video is king and operators can clean up by fulfilling endless consumer demand for streaming music and video services?

In short – of course not, at least certainly not in the short term. The plain fact of the matter is that operators are a lot more excited about 3G than consumers are; behind the multi-million pound advertising lies a relatively slow subscription rate that betrays the true extent of consumer apathy.

Consumers buy into the services, not the technology, and the services currently available do not yet take full advantage of the opportunities offered by third generation networks. Furthermore, there is often little thought given to the promotion of these streaming services; for many subscribers, streaming is a new and unfamiliar technology, something to be wary of, and not the indispensable lifestyle accessory the glossy ads make it out to be. To really drive these rich content services, operators need to look at both their delivery infrastructure and marketing strategies.

At the moment, most operators are starting to employ dedicated streaming servers to deliver music and video content over the air to subscribers. For the most part, these servers are workable, standalone solutions that do the job they’re intended for – in some cases, even over the 2.5G network. However, a standalone streaming server is not a sound basis for an ongoing content revenue strategy. In fact, maintaining a standalone solution that isn’t integrated into existing content management and delivery systems is simply another cost for operators to bear.

A standalone streaming server is essentially a ‘store and forward’ mechanism, which makes it very difficult to develop video content into a targeted offering. To do this, integration points are required into the content management, CRM and, importantly, content delivery infrastructure; this allows all commercial aspects to be controlled such as pricing, catalogue and portal management, promotion and the discovery / delivery experience. When delivering video, marketing and education is key; with a standalone server, there is a reliance on the user at the device level to ensure that a media player client is installed and able to handle the relevant content. Put simply, an integrated and unified content catalogue and delivery platform is required.

With the appropriate management and delivery infrastructure in place, the next key consideration is the way new services are marketed to subscribers. Operators need to proactively stimulate demand for rich content; passive services will not find users.

Firstly, operators need to think in terms of segmenting their subscriber base to ensure their marketing activities are targeted. For example, adult content will certainly be one of the hot areas likely to drive the uptake of streaming video, but promotional campaigns need to be very specifically targeted based on subscriber age and registered preferences. Beyond the adult and sport arena, streaming music services – which will almost certainly be the other category that sparks consumer excitement – are more likely to find an audience if tailored promotional campaigns can be delivered to an identifiable subscriber sector.

Secondly, operators need to think more specifically about how they can integrate 3G services into their existing content portfolio. Bundling content into relevant, themed packages, for example, will help introduce the subscriber base to the possibilities of streaming. Offering video clips alongside familiar items such as games and ringtones will help drive discovery, boost uptake and help establish an appetite for richer media.

For example, operators could bundle branded content from a blockbuster movie that includes stills from the film, a JAVA game, a ringtone – and a streaming trailer for the movie itself. Subscribers then receive a catalogue of mostly familiar items relevant to their interest, increasingly the likelihood that they will trial the video service. By pursuing this ‘soft introduction’ technique, operators can gradually build user familiarity with 3G services and develop consumer demand.

Once we step beyond the hype, what does the next year really hold for the 3G content market? To a certain extent, it’s a chicken and egg situation. Video and audio streaming won’t be the cash cow everyone hopes for until more subscribers can be convinced to start using these type of services and device penetration increases. Simultaneously, without operators investing in the appropriate infrastructures and taking a more holistic view of the content marketing function, the content on offer is unlikely to engage consumers and build the desired levels of demand. As the ARC Group have noted, the purchasing behaviour of consumers is the hardest variable in the rich content market to predict.

In a nutshell - 3G is ready, but the advanced services that can provide the revenues necessary to wipe out the burden of 3G license fees are in the early stages. The opportunities are there, but until operators can get their pricing, delivery and marketing strategies right to bring customers on board, streaming content will remain a niche sector for some time to come.

– ENDS –

About elata

elata - the power behind mobile content and devices

elata is a global leader in mobile content delivery and device management software systems and is dedicated to developing innovative solutions for the wireless market. Since 2000, elata has focused on the mobile data challenges facing mobile operators and service providers and has created a comprehensive range of modular, flexible solutions to meet their needs.

elata’s three software products: the elata senses™ mobile content delivery software system; the elata ascent™ campaign management system and the elata liberty™ device management solution empower mobile operators and service providers to increase the average revenue per user from mobile data and realise new 2.5G and 3G business models. Deploying elata's flexible, intelligent software systems at the core of the mobile content delivery platform enables mobile operators and service providers to manage a dynamic catalogue of mobile content from a variety of third party providers, target and promote content to subscriber groups and deliver it over-the-air to increasingly complex mobile devices. By addressing these mobile content delivery and device management challenges elata enables operators to drive revenues from a mobile content market that is predicted to be worth over US$126 billion by 2008.

Today, elata is the answer for an ever-growing number of mobile operators and partners who were quick to recognise the mobile content opportunity.

Published on: 12:00AM on 30th March 2005