Diamond Report Says Content Providers Should Remain Innovative yet Structured in Their Approach
CHICAGO, Oct. 1 /PRNewswire/ -- Can't wait to watch your favorite celebrity's latest paparazzi moment or get up-to-the-minute sports video highlights? Media and entertainment companies and wireless carriers are joining forces to make this happen, but these firms need to adopt a more structured approach if they hope to seize the enormous financial potential for mobile media content.
While the U.S. mobile content and advertising market is expected to generate $13 billion in revenues by 2010, according to Diamond Management & Technology Consultants, Inc. (NASDAQ:DTPI), media and entertainment companies might not be prepared to maximize their revenue-sharing potential with wireless carriers.
"We believe media and entertainment companies should take a more proactive, analytical, collaborative, and structured approach to developing mobile content and pitching it to wireless carriers," said Hamilton Sekino, a Partner in Diamond's Telecom and High Tech practice.
"Wireless carriers are certainly interested. They have to rely on mobile content to fill the $40 billion gap created by declining voice revenues that we'll see in 2010," said Sekino. "Media and entertainment companies can help carriers close that gap through higher data uptake and usage, retention of data plans, and content and advertising revenues." "To develop the most attractive offers, and to maximize their share of revenues from mobile content and services, media and entertainment companies must first understand the direct and indirect contributions they can make to wireless carriers," added Sekino. "Media and entertainment companies shouldn't sell themselves short; their new offerings bring valuable indirect benefits-such as increased user loyalty and graduation to higher-level data plans. But these companies need to merge the knowledge of their content assets with carriers' knowledge of technology and subscribers. Only a symbiotic relationship will allow a full understanding of user behavior and exploit the entire potential of the third screen." In a new report, "Hollywood, Meet the Third Screen," Diamond details a new approach for media and entertainment companies to participate in the world of mobile media. The report defines five guiding principles for the design of new mobile content, and uses these principles to assess potential mobile content offers. The report also outlines a structured approach toward designing, assessing, prioritizing and pitching mobile media offers to carriers, aligning the needs of wireless end-users with the economic interests of content providers, advertisers, and carriers.
To obtain a complete copy of the report, send an email to .
Guiding Principles of Content Development Diamond recommends that content developers consider five dimensions as they brainstorm new mobile content for wireless customers.
-- Content discovery -- Customer recommendation engines, genre-specific
portals, and links to popular social networking sites can make it
easier for customers to find the information they are looking for. -- Content experimentation -- Mobile phone users often don't purchase
mobile content because they can't try before they buy. Encouraging
experimentation by offering a wider variety of service options,
including sampling and free trial periods could increase sales. -- Pricing -- Content providers and carriers need to reduce the perceived
cost of their offers. One idea: subsidize content and data traffic with
more precise, context-dependent ad placements. -- User experience -- Unlike their counterparts in Europe and Asia, U.S. consumers in a recent trial tuned in to their third screen only 15
minutes a day. Mobile content must be highly engaging, but consumable
in short portions to match users' lifestyles. -- Usage Stimulation -- Products and services need to drive increased
usage. For example, an ad-supported mobile game arcade that notifies
game players of new high scores could trigger gamers' competitive
instincts and prompt more frequent play. Potential Opportunities for Carriers and Content Providers
In the paper, Diamond describes 12 example mobile media offers-including videos, news, music, and games-and outlines how these offerings stack up against the five guiding principles. The authors estimate net revenue for both wireless carriers and content providers on a per-subscriber basis, and then develop five-year subscriber and revenue forecasts. Below are high-level descriptions of four offers outlined in the paper.
-- Video -- For casual users of mobile data who don't subscribe to a data
plan, video content is prohibitive and may induce customer
dissatisfaction and churn. Mobile video-themed channels (comedy,
sports, movie clips, business, etc.) that store video clips downloaded
at off-peak hours can stimulate video usage in this population,
particularly if advertising can subsidize subscription fees.
-- News and Information -- The idle screen on a mobile device-an extremely
underutilized area for content-can be a great place to attract
attention and create advertising traffic. News headlines are a prime
example of how content providers and wireless carriers can use the idle
screen to their advantage, with a user clicking a headline and being
routed to the corresponding article-a free service supported by ads on
the landing page.
-- Music -- For the casual and more passive mobile music user, genre-
specific music rolling libraries (dozens of songs per genre-specific
channel) can be subsidized by ads. Songs can be downloaded at night to
reduce network costs and can be enjoyed for a couple of days before
they expire. Users can rate these songs to further refine the selection
of new songs to replace those that are expiring. They also have the
option to buy songs to add to their permanent libraries.
-- Gaming -- Mobile game tournaments can be a way to promote new games
and/or stimulate usage. Tournaments can also be sponsored by large
advertising campaigns-such as the release of a new movie or the launch
of a new soft drink-with pre-roll or in-game ads. Structured Approach to Developing Mobile Media Offers
Diamond also developed a three-step approach to guide media and entertainment companies in designing, prioritizing, and quantifying the economics of mobile media content offers. These steps involve conducting secondary research and brainstorming sessions to develop a list of potential mobile media offers; implementing primary research to prioritize the list of potential offers; and evaluating the business case for both content providers and carriers, taking into account direct and indirect benefits.
"Content providers should build a portfolio of potential cross-carrier and carrier-exclusive mobile media offers to capture the rewards of an emerging and fast-growing mobile media and entertainment market," said Sekino. "By developing mobile content and negotiating with carriers in a more productive way, content providers can significantly boost their success in the mobile media and entertainment space." About Diamond Diamond (NASDAQ:DTPI) is a management and technology consulting firm. Recognizing that information and technology shape market dynamics, Diamond's small teams of experts work across functional and organizational boundaries to develop new strategies, improve operations, and deliver results. Since the greatest value in a strategy, and its highest risk, resides in its implementation, Diamond also provides proven execution capabilities. We deliver three critical elements to every project: fact-based objectivity, spirited collaboration, and sustainable results. To learn more visit http://www.diamondconsultants.com/. DATASOURCE: Diamond Management & Technology Consultants, Inc.
CONTACT: Nicholas Braude, Media Relations, office, +1-312-255-5802, cell, +1-312-848-1562, , or Margaret Boyce, Investor Relations, +1-312-255-5784, , both of Diamond Management & Technology Consultants, Inc.
Web site: http://www.diamondconsultants.com/
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