Mobile phone market needs content licensing

In our firm we have been involved in the ever-growing mobile market for some time (see Content Licensing for Mobile Phones). Our focus in this post is on commercial and legal needs for revenue generation by content owners and licensees.

Revenues from mobile data services are rising about 11% per year. In Australia ranked in order of mobile content popularity are first ring tones, followed by general information services, logos, adult content, chat services and Java games. Australian users on average have paid A$3 for monophonic and $5 for polyphonic ring tones, A$4 for colour logos, A$2 for black and white logos, A$3 for chat services, and A$5 for Java games.

It all adds up to a market (lately tagged as “m-commerce”) with growing revenues. And these figures are the tip of an iceberg of legal and commercial relationships which result in revenues shared between numerous players.

Market typology

The players in this market are:

Network operators, [in Australia they include Telstra, Vodafone (whose network AAPT uses), Optus (owned by SingTel), and Hutchison (Orange)]
Platform providers eg handset manufacturers such as Nokia, Ericsson, Motorola and now Apple with its iPhone
Content and application developers (preparing mobile content including news streams, ring tones, logos, Java games, videos, Java applications etc)
Content aggregators and publishers
Marketing and media agencies marshalling commercial customers seeking marketing opportunities, be it advertising, sponsorship, product placement or something else.

The groups of players in this typology recognise they are in a market driven by adding value to their offerings and here content is prominent.

Mobile commerce applications

For them collectively the big future money from mobile and wireless applications includes – mobile gaming, web surfing involving data transfer fees, pay per view content, alert subscriptions, payment facilitation (eg for parking meters, concert tickets, vending machines), mobile coupon redemption and loyalty cards.

These uses grouped under the latest buzz word, “mobile commerce”, can involve a range of mobile and wireless devices. Mobile devices can be currently and roughly grouped into five categories:

Mobile phones (AKA cell phones): typically have fixed buttons for fixed functions
Smartphones, typically voice-centric devices with PDA functions
Personal digital assistants (PDAs) eg Palm Pilot and Blackberry: typically containing an input device such as a stylus, touch screen, mini-keyboard or navigation pad
Media players (eg iPod and iPhone): using a compression system for content and playback controls (eg play/pause, next, previous, volume up, and volume down)
Laptops and computers, supported for example by Wi-Fi or WiMAX wireless internet connection.

The in-your-face 3 logo on this Summer’s Ashes cricket fields drove home to television viewers nation-wide that locally the push continues to attract consumers to 3G networks. They have data rates of 384 kbps and more, thus permitting delivery of richer content, up from the 2G networks with data rates of up to about 144 kbps and above 2.5G.

The signs are that access to content will shape markets. Therefore the walled garden of telco content is likely to fall due to consumer pressure, with consumers used to the extraordinary level of access to content on the internet.

Reference: Mobile Marketing: Achieving Competitive Advantage through Wireless Technology by Alex Michael and Ben Salter (Butterworth-Heinemann, Oxford, 2006). The authors are respectively the Managing Director and Mobile Content Manager for Sprite Interactive in Surrey, England.

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Noric Dilanchian

Noric Dilanchian is a lawyer, author and educator practising in areas of business law for almost four decades, with a focus on contract drafting and review, and the commercialisation of content, technology, digital assets and intellectual property. Linked In |YouTube

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