There has been a lot of discussion, some on these pages, about carriers turning into media companies. The topic was raised at OMMA Mobile the other week on a panel called “Myth Busters: The Major Misconceptions about Wireless.” The “myth” is that carriers are a technology business masquerading as a media business. However they are not structured appropriately, they don’t know what to do with data, they are greedy, and they just don’t get it. Was it dispelled? Well…here’s what was said.
Ujjal Kohli from Rhythm Media pointed out that it’s easy and natural to vilify big players, but if you want to make money (good money) in mobile you need to figure out how to work “in the yard” (referring to the “walled garden” of the carrier deck). If you were in their shoes and had all their expenses, he says, you would understand their primary concern is getting subscribers. “Silicon Valley doesn’t understand that.”
Getting subscribers, or raising revenue per existing ones? “As long as ARPU for voice continues to slide and penetration maxes out, carriers will learn to become media companies,” said Roger Wood from Amobee, suggesting that it’s not only wise, but necessary. They will be forced to learn how to make money off of new usage habits, which increasingly preclude voice communications. “Talking is the last thing young people do,” he said. They do five different things on their phone in the span of an hour, maybe only talking for a few minutes at a time. This is not good news for carriers, so he thinks that media models are the future of carrier growth.
Carriers do need to figure out how to make money now that youth are changing the playing field. Not only are they talking less, but the mobilizing of VoIP products like Skype will mean they will not even be paying for those calls. Carriers thus far ARE following the media model:exploring the space, creating more inventory, and trying to drive useres to their decks. The question remains, though, whether on-deck content is the best way to go about raising revenue. Nokia is covering all the bases with its Ovi suite of services and their new proprietary ad network (that serves both on and off deck). The question is: if you build it, will they come?
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