Orange UK: Mobile Broadband Roars!

Orange UK, one of the large carriers in the country with 15.8m mobile subscribers, has released its "Fifth Digital Media Index", containing a set of interesting numbers on the data uptake on their network, and it makes for intriguing reading!

The carrier recorded a whopping 4,125% (!) increase in data use over dongles using their mobile network in the last 12 months with dongle subscriptions growing by 504%. Data use from handset increased by 108% and that, I might add, without the help of the iPhone (which is exclusive to O2 in the UK). The increase from dongles will be connected to a big push this offering has seen in the UK (as in other countries) over the past period. Carriers have been and are promoting these aggressively, helping uptake of mobile broadband significantly.

Here are some highlights from the report:

• Music and video downloads increased both by 38%.
• Games only grew by 8% (but at least they grew; anecdotally, some other carriers recorded sometimes dramatic drops in take-up) to a total of 770,000 downloaded games, which equates to a market share of 23% of all UK games downloads (the total UK games market would hence be 3.35m downloads for the year with Orange claiming top spot). From the top 10 downloaded games in 2008, 8 were part of the carrier's embed programme, which shows - again - that users appear more comfortable if they can try it out before (embedded games normally are trial versions).
• Social network use over mobile increased by 129% in page impressions per month and 48% in unique users. The monthly average number of pages per user was 397. In terms of popularity of social networks, Orange's Mark Watt-Jones (@MWJ) fed us additional bits via the Twittersphere: Facebook dominates, Bebo is significant, MySpace less so and Twitter grows very quickly (what was the Oprah moment in the UK?)
• An average of 386,000 GB of data have been transferred via dongles and handsets per month.
• Mobile search grew by 120% with 45% of the results being "off-portal", i.e. outside Orange's domains.
• Good old SMS still looking good, too: 19% growth with 1.7bn sent every month.

Another key point Mark brought us via Twitter: 99% of access to social network sites came from non-smartphones. This is quite noteworthy indeed as it arguably shows that mobile data usage now transcends beyond the power users on sophisticated handsets and also that content leads the uptake: give people compelling content, and they'll use it. Mobile data for the masses seems to have arrived!

Mobile Music on the Rise: 40-45% of Digital Revenue for UMG

January is MIDEM time (even though, sadly, I cannot go this year), which means that music dominates the news. In an interview, the EVP of Universal's eLabs, Rio Caraeff on the revenues of Universal Music Group that:

"about 40 to 45% of our overall digital business is coming from mobile channels like Verizon and AT&T. [...] On much of our frontline pop or R&B or urban releases [...] we're seeing mobile comprising 20-45% of the [overall] revenue for those artists."

Wow! Universal's digital sales have been growing by 33% during the first 3 quarters of 2008, and they seem determined to fully converge "online", "mobile", etc into one:

"The consumer doesn't want a mobile-only experience - they want an all-digital multi-platform experience. They want to consume their music on their mobile handset [and] on PC and other online platforms. Partners like Verizon and AT&T wanted to have multi-platform online experiences as well. [...] Now at Universal, we don't have a mobile business. We don't have an online business. We just have one multi-platform digital business."

Amen to that! And how right he is. Universal also adapted pricing, so that a song costs the same no matter on which digital platform you buy it. And, apparently, mobile storefronts play a role, specifically Amazon's MP3 storefront, which is pre-loaded on the G1, the first Android phone. So it's app stores (or markets) all over this year, huh?

This shows that the majors learned from the pain of recent years and now get a grasp on the digital world. Good stuff that!

Comes with Music Comes to Mama

Nokia's "Comes With Music" service (unlimited downloads of 4m+ music tracks), which you get when you buy a phone, had been announced with much fanfare but it went a bit quiet after that. Now "early results" from the service show that it is mothers appear to be amongst the leading adopters, according to a Nokia executive. Unfortunately, that seems to be amongst the few bits of information they would let out into the public, the only other one being fairly obvious: recommendation is a driver (did they consult Amazon?) and chart coverage matters (Popularity matters? What?).

It would be wonderful would Nokia actually release a showcase of what it achieved with the service. I appreciate that they will want to wait since the service has gone live in the UK first and that only recently but I do hope that they will enlighten us... 

iTunes the largest music retailer

Not really mobile but at least digital and interesting in any event: a news release has it that Apple's iTunes had overtaken mighty Wal-Mart as the US' largest retailer of music. Best Buy was ranked third and Amazon.com and Target tied for the fourth spot in January and February, it is reported.

iTunes apparently sold more than 4 billion tracks since its launch in 2003. The survey counted every 12 digital downloads as one CD but excluded mobile music sales. Apple claims more than 50 million customers. This is a rather impressive development: They sold around 25m tracks in 2003, surpassed the 1bn mark only 3 years later and hit 3bn in July2007.

LiveWire in the Groove

LiveWire Mobile (part of Nasdaq-listed NMS Communications Corp) acquired former ringtone and now full-track platform provider Groove Mobile for $14.5m in what commentators call an "unexpected swoop" (why? because they waited with the PR until the deal was closed?).

Groove Mobile runs the music decks for 12 carriers, including most notably Sprint in the US and 3 UK. It also holds contracts with all major music labels.

Now, why should this be unexpected? The press release lays out the "strategic reasons" for the acquisition and, whilst it is all a bit embellished in the usual PR blurp, it is relatively plain to see: LiveWire Mobile are - or so I understand - specialising in ringback services (their website says they are deployed on 30 carriers with that). However, those carriers do not seem to give them too big a footprint: the release states that the acquisition triples their "addressable market".

Also, ringbacks are a bit of a beast to run as they require deep integration with the carrier on which it is deployed (you need to be on network level to integrate this), and the relationships of a company that runs the music platforms for some carriers are naturally quite valuable to someone like that (although someone still needs to explain to me what turn-key means in mobile telecommunications terms). So: you get someone who is already integrated with a carrier, you increase your chances that that carrier will choose more services from you. Compelling, huh?

If it is a good acquisition remains to be seen: ringbacks are utter flops in some countries (people query the value of a service that the person paying for it never experiences...) and huge hits in others; not consistent though... Also, digital music distribution seems to be a field with utterly low margins; great if you can deliver VERY efficiently and to enough consumers but tough as you always face margin pressure from every side you are involved with: the labels that are struggling to replace retail sales and the carriers (and, increasingly web players and OEM) who want to be amply "reimbursed" for allowing you to sell to their customers. If the above considerations can deliver, it should have been a good buy: at about 2 x revenues, it was at a relatively sane valuation multiple.

Good luck, folks!

Vodafone walks through the Ovi with Nokia

Following their relatively recent announcement of a multimedia initiative, Nokia reports a big win with Vodafone having agreed to carry their Ovi platform on Nokia devices that are distributed through the operator. Ovi, which is Finnish for door, was to be Nokia's next big push towards becoming a multimedia company. One of its flagships under that umbrella, the Nokia Music Store, will now run alongside Vodafone's own music service.

Nokia's risk with the introduction of Ovi was that operators would reject having the Ovi links on the phones that they were distributing (not uncommon for them to do), so to have the "world's largest operator by revenue" amongst their ranks is no small feat. Otherwise, Nokia would have seen limited distribution in markets where handset prices are subsidised by carriers, which is true in most!

With Nokia having bolstered its portfolio of offerings in recent months even more (the acquisition of Navteq being the biggest one), this opens the pipeline to a much richer content experience, and this is what might have pursuaded the good folks at Vodafone: with carriers struggling to come to terms on the "right" treatment of content to maximise sales and user experience, a door to a fully-packed store of content and applications must sound tempting.

It might actually mark a turn in the market: could it become the handset manufacturers who will take the lead in the content space and become the funnel through which content providers feed their wares to the consumer? It would make sense in that it is arguably easier for an OEM to ensure that there is optimal performance for a product on a device (after all, they manufacture the device). Such a model would bring relief to the operators who would continue to control the billing relationship with the consumer and hence alleviate fears of removing that bond but they would be a big step closer to becoming the dreaded bit pipe as had happened to ISP on the Internet. I have argued before that this process would - in any event - take longer, so that might alleviate fears.

It is breaking into the control-driven model of operators, and that is a significant development in itself. Nothing will of course change for the content providers, at least not in the short term: it is just that they need to ring a different doorbell now (or rather an additional one...).

Prince-ly Guitar on Verizon

One I've been waiting for for a long time: an opportunity to post something on one of my all-time heroes (strictly music-wise!) , the man who plays at least 167 instruments, the only one who can walk on 19'' stilettos, the artist with the infallible fashion sense, namely the incredible Prince. We read that Verizon and Prince entered into a collaboration which they claim is an industry-first "direct-to-mobile relationship". Prince will release new single "Guitar" exclusively via Verizon. This leads a promotional campaign up to the new album "Planet Earth" which will be released in July.

Verizon will promote artist, song and - incidentally - its V Cast service via print, TV, radio and cinema. This strikes me as rather traditional really... However, Verizon and the artist have tied up a rather need package featuring nearly every sexy must-have service around these days: V Cast customers can hold their handset up to the TV set to identify and download the song - IF their phone as Song ID, that is. They can also simply go to Verizon's website and download it there. Upon release, the video will also be available on "licensed sites" YouTube, MySpace, Revver and Veoh.

As Prince isn't signed to a label, this will be the main piece of promotion for the album, and that is certainly a rather revolutionary affair, at least one never tried by people who weren't signed because they couldn't find a label (as had happened to the Arctic Monkeys a while ago who, having started off on MySpace, have since grown to become an established acts signed to Domino). This together with a hole bouquet of recent activity of the artist (everything ranging from new website, concerts in Minneapolis [7/7/7] and London [21 Nights, selling 140,000 tickets in 20 minutes] to a new perfume and cosmetics range [not sure if I'll try that one]) suggests a serious assault on the classic set-up of the music industry and the labels' stranglehold onto it. This had been weakened by the arrival of digital media but never broken.

If it pans out? I sincerely hope so - less for revolutionary zeal, more for one of the greatest artists of recent decades. But in any event is this one of the more exciting music promotions of recent times. Well done!

Although, I don't want to hide the bad: the world there is again defined as being North of Mexico and between the Atlantic and Pacific Ocean only... Or are we non-Americans not worthy of some Prince-ly mobile musical delights?

A whole Armada: Nokia, Vodafone, Sony BMG! And for what?

One of my true favourites, Groove Armada, have teamed up with all the heavyweights to bring their music, more specifically, their new album "Soundboy Rocks" to the very cutting edge of digital: whenever you b uy a Nokia N76 in a Vodafone store, you will get 1) a voucher and 2) a PIN to take to 3) a website to 4) download a song (you can store 1 copy on your computer and 1 on your phone, sorry, multimedia device). Easy, isn't it?

I would hope this will work (if only to help the good folks from Groove Armada) but the whole approach would appear a wee bit cumbersome: with every click, you lose consumers. With every change from one media to another (retail to mobile, mobile to web, retail to web, etc.) you lose them tenfold. So why on earth don't they just run and show off a mobile download service and/or pre-install some content to demonstrate the superb capabilities of Nokia's really fine devices? I don't get it...

When one reads on, it becomes clear, that this is clearly more a PR affair for both sides: the remainder is a hilarious marketing blurp: Nokia loves Sony who love Nokia who love everyone else... Vodafone's role, other than providing the retail space and being represented on the rather lame microsite with a logo - below the fold - isn't entirely clear. Executives showing their superiors that they actually do "something" in mobile? Is it just me or does this appear somehow pieced together?