Mobile Entertainment Market 2010, Meffys, Event summary and detailed discussions: Part 1

Meffys 2010 awards and Mobile Entertainment Market (MEM) 2010 organized by Mobile Entertainment Forum between June 21 and 23 in London, was definitively a confluence of leaders and champions from every stream of mobile and entertainment business globally. The event saw participants and speakers from traditional vendors such as Nokia and Ericsson, applications, internet and social networking players such as Microsoft, Flirtomatic, Sonico and Yahoo, Media companies such as Buongiorno, Saffron digital, and Gracenote, Handset manufacturers such as HTC, Blackberry and Sony Ericsson, Operators such as Vodafone, O2, T Mobile, MTS, Turkcell and Azercell, broadcasting and television companies such as BBC, Sky and HBO, payment companies such as Boku, mBlox and Ericsson, Video product and services companies such as Sling Media, publishers such as Random House, Mobile advertisement firms such as Admob, Consulting firms such as Accenture, KPMG and 4th screen advertising, Entertainment firms such as ZED and Hungama Mobile, Sports Clubs such as Real Madrid, filmmakers such as Disney, Music companies such as Shazam, Spotify, Sony, 24-7, Omnifone and Dada, Mobile marketing companies such as WPP, ImpactMobile and 2ergo, augmented reality players such as Layar, regulators such as phone pay plus and App stores such as Getjar.
The hottest topic of the three days was apps and most of the discussions touched or revolved around app stores and apps. Understandably, Google and Apple were absent and conspicuous.
The article below attempts to summarize the key takeaway from all the panel debates and keynote that occurred during the meet. Detailed notes can be found attached.

Keynote by Andrew Budd
Andrew walked the audience through a decade of progress in mobile entertainment. He touched upon ring tones and called 2004 the year of ringtones which became ~$15B industry by 2006. He called 2005 the year of snake which was the core of mobile until ring tone came when the entertainment shifted from games. Today according to him ~40% of the app store revenue comes from games. After games, came ring tones and crazy frog. Experts believe that the subscription model on the ringtone killed the business and took the innocence away from the service. 2006-2007 was the launch of the mobile video, however, the user experience wasn’t good enough so it didn’t work. 2007 was really the year of WAP, when the mobile internet got its own definition, with its own technology and constraints. WAP is the basis of operator portals. 2008 was the year of social networking and premium SMS to facebook and twitter. Social networking became the killer app. Andrew said that anything that has a social context is 10 times more valuable. 2009 became the year of apps when Dr. Antero Taivalsaari (SUN), and Mark Vandenbrink (Motorola), who created J2ME were awarded the innovation award at Meffys. In 2009 app stores became the new content category after 10 years of J2ME. Today, 2010 is the era of touch phones with PCT technology, invented by Dr. Andrew Hsu of Synaptics, which changed the concept of the user interface. The technology enables to create large flash objects, without distorting resolution and which is a pleasure to use. Andrews list of next ten years includes:

Flexible materials and form factors

1) Feature films, 3D and AR
2) True multi-channel
3) Mobile as the media center of our lives
4) New business models
5) More growth

The next session was:

What Have We Learned and Where Are We Headed?

The session was moderated by Andrew Budd and had following panelists:

Vesa-Matti Paananen, Mobile Communications Business, Consumer & Online, Microsoft . He is the inventor of ringtone
Fernando Gonzales Mesones, Head of B2C, Buongiorno
Alan Brenner: SVP blackberry

The key ideas discussed in the panel discussion were:
1. Keep things simple
2. Content and service is king
3. Personalization of mobile is key. Even if the ringtone was a global phenomenon, but the type of music and content was different. The ringtone is just a part of personalization. Apps are new ways of acquiring content
4. New products have to be pushed with a lot of marketing dollars. (Operators) They do something and then they don’t market. Operators also have to learn to do things from 10 to 1 year for production. Closed market is not where they should go and blocking will not work. Openness without commercial gatekeepers (implying google and apple) is the way to go
5. New combinations of value will emerge from Open platforms and then how they are integrated
6. Way forward is providing the right content at the right time at a convenient and right price in an open system, with simplicity, to provide a combination of value and price.
7. Games are key and social content is more and more important
8. Michael Bornhauser Managing partner 5 continents consulting group believed that there are too many apps and search on app is the killer app
9. Apps are to be linked with the media companies to create branded apps so that they became someplace consumer know
10. The other question you have to ask what is the future reference device- iPhone, Android or tablet

The next session was

Publishing and the digital future

by Fionnula Duggan Director at Random House digital group. Fionnula, was VP at EMI earlier and knows the music business quite well. The key ideas that Fionnual shared are:

1. E-book sales as % of US trade book sales is ~4 %. In 2010 e-books saw a growth of 7-10%. In 5 years industry forecasts a growth of 5-25%. This is the very early stage of hockey stick growth
2. There are three pivotal moments in the ebook industry:

a) Amazon Kindle launched in November 2007 – dedicated device catering to millions
b) App store and iPhone launched in July 2008 and iPad and iBookstore launched in April 2010– smartphones and tablets catering to tens of millions
c) Google editions – the web catering to billions

3. Amazon Kindle: Interaction of a user affects their pleasure and the immersion in reading is such that the device is disappearing. Kindle also offers seamless wireless retailing and its ecosystem, has 80% of US consumer e-book market.
4. Nigella Quick collection apps which became a hit after the launch is a case study for App store and iPhone / iTouch. With this app for recipes, you can connect to facebook, make recipes a part of the shopping list, you can Turn on the voice activation for forward and back while you are cooking. It has become a Lifestyle app and is priced just at 4.99 pounds. There is an iPhone app soon to be launched for digital books.
5. Google Editions – is not yet launched In the web- 70% of e-book reading is happening on PC. That’s where Google will make money. Streamed viewing of a book on the cloud over multiple devices is what Google is attempting to do.
6. Books and digital books will co-exist. In some places, digital books uptake will be faster. Uptake with academics could be faster for example.
7. Piracy, commercial model, and role of the publisher are a few threats
8. Opportunities
a) Share of reading in devices increases
b) Work through retailers
c) Can be broken down and consumed
d) Can digitize products early
e) In Amazon and apple world people are used to paying. Work early on with these people. The book industry is a lot more organized than the music industry
f) Social networking: Many people buy because people recommended. Work with communities and not resist
g) Subscription based models will replace the libraries is where we are heading to. Are publications talking to each other like the music label? People will replace their book collections like the music collections, If you have the confidence that you will get what you wanted (Google edition model)
9. While the book industry may be similar to music there are differences: They have different demographic to music. Books are more female oriented. It’s not just about 22-year-old guys trying to crack through DRM. Besides these are very different time. Book industry will evolve very differently from music. In the books industry market segmentation is important. The pricing in the industry is set by the retailer.

The next panel debate was

The Apps Explosion: What Does the Proliferation of Apps and App Stores Mean for the Traditional Content and Media Industry and How Must Their Strategies Adapt?

The panelists were:

Sarah Evans, Head of Mobile Internet and Portals, O2 UK
Mark Linder, Global Client Leader, WPP
Philip Blair, Product Director, HTC
Tim Raby, Managing Director, OMTP
Oded Ran, Head of Mobile Services, UK, Microsoft

1. Oded Ran from Microsoft said that it’s very difficult to ignore big platforms. The question is what you are trying to achieve. If you have a limited budget and you don’t have content it’s a very tough business model. You have to pay for development and then buy content and then monetize that. You have to get the billing right. The content itself is difficult to charge for an experience itself has more value. If a content app can be wrapped in a mobile experience then you can charge that and sort out the billing
2. What is Wholesale application community: It’s a collaboration between 25-28 operators for the developer ecosystem to get the developers apps to the multiple operators.
3. Japan is a good example of web mobile commerce. In terms of micropayment and microtransaction over the phone.
4. Philip Blair from HTC said that Advertising is a contentious topic. It has to be linked to the core experience. Location-based have great opportunities to monetize. Mobile is very personal so advertising becomes tricky. Flirtomatic monetization model was: Flirtomatic service is free but you charge for premium services. For example, Women don’t like anything negative on their profile so they charge to delete that. Virtual things like bouquet are more valuable for women so they avail themselves of premium services
5. It is extremely costly to develop app apart from blackberry or iPhone.
Handset fragmentation:
6. Microsoft is coming up with a set of tools for windows 7. Windows 7 also is tying up with the operators.
7. HTC: There is a limit to what the industry can do without standards. Standards would make a difference.
8. Innovation is necessary over and above content e.g. doodle jump, four square
Are mobile web apps second-class citizens to client-based apps?

9. Definitely not if the web apps are delivering in a much more compelling way and are providing if the experience is the same. Do it in a way that it is compelling. Tim believed that Client has a certain value and a small number of high-value ones will be client based and rest will be just browser-based. WAC’s vision is that downloadable applications will be on web service that can be used on every OS and handset, creating a multiple operator controlled ecosystem.

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