Analysts have predicted the demise of the majority of pure mobile content operators within the next few years, but companies providing those services in Australia are unconcerned.

The reason for the failure of most pure mobile content companies is their lack of an efficient distribution channel, according to Graham Brown, author of the report Winning and Losing in Mobile Content, published by World Wireless Forum (W2F). The report is based on three months of extensive study of individual mobile content markets in North America, Europe and the Asia-Pacific and surveys of 400 industry executives.

"The content market in Europe and North America is cranking the handle on production and development but there is no effective method to getting these products to market utilising their current strategies. The industry has yet to collectively develop a winning strategy," said Brown.

"We identified a number of industry weaknesses that surprised us when conducting the research. The most obvious of which was investing resources in mythical killer applications and rich content without an effective distribution channel to get products to market," said Brown. "Unfortunately, we appear to be collectively disposed to pursue industry solutions to industry problems."

Andrew Cantle, founder of NudgeMobile, said the report doesn't break much new ground. "It refers to forces and trends that are true of any new market, with a large number of entrants, low barriers to entry and high levels of competition, so no news there," he said.

"The reason the big media/entertainment companies are seeing success, is that are content rich and are used to monetising it," said Cantle.

Steve Watson, general manager of Portals & Entertainment at Legion Interactive -- the company which runs mobile content provider BlueSkyFrog -- said the report confirmed mobile content companies with an efficient distribution method would thrive.

"The Australian market is only just starting to come to grips with GPRS capable phones and the realisation that these will be more than a more than just a mechanism to engage in conversation," said Watson. "What we are presented with is an opportunity for greater distribution via new payment methods such as reverse billing onto a mobile phone account, prepaid purchasing via electronic terminals such as E-Pay or touch corp, the convenience of IVR (billing against one's home phone account) and the traditional methods of credit card and b-pay purchasing such as those widely available on BlueSkyfrog.com."

The report estimated the developed mobile content market of the Asia Pacific region to be worth up to 2.65 billion euros (AU$4.59 billion), rising to up to 5.7 billion euros (AU$9.88 billion) by 2006. In contrast, the mobile content markets of Europe and North America will grow from 1.8 billion euros (AU$3.12 billion) in 2003 to be potentially worth 4.3 billion euros (AU$7.45 billion) in 2006, according to the report.

In this market the largest growth will occur in the mobile games and downloadable music markets, which collectively could see growth from 510 million Euros in 2003 to over 1.9 billion euros (AU$3.29 billion) in 2006.

"Most content providers believe they can become a small part of an increasing pie," said Brown, "That's their weakness. Non-mobile players and the few mobile companies that have focused intensely on core competencies, distribution and operational effectiveness will increasingly dominate this market. Yes the market is growing rapidly, but the number of content providers to benefit will decrease significantly over time."

Watson said content developers should partner with providers that control a "significant channel to market" to distribute their software.

"As has been the case in Europe, the consumer continues to source content from a reliable provider/distributor that can give them what and when they want, and at a price they accept is fair," said Watson. "In coming to a provider of content such as BlueSkyFrog.com, the consumer is making a purchase of choice."

Cantle agreed, saying NudgeMobile's focus on being a dedicated branding site with core competencies in sales and marketing positioned it as a player in the market.

The report argues that media giants such as MTV, Disney, AOL Time Warner and Universal Music are already making an impact in the mobile content market, requiring pure mobile companies to think ahead to how they position themselves.

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