Mobile Entertainment_issue59, January 2010 by Intent Media (now Newbay Media Europe)

FOR EVERYONE IN MOBILE CONTENT

JANUARY 2010 ISSUE 59

www.mobile-ent.biz

MOBILE ENTERTAINMENT

Mobile goes to the ball ...and asks what 2010 will bring

CONTENTS

NOW PAY LATER 09 BUY The in-app payments explosion

FUTUROLOGY

OUTER LIMIT

What lies ahead for this blessed industry

The rise and rise of Out There Media

AND SO TO BADA

FOR REAL?

Kicking the tyres of Samsung’s new platform

Everyone loves a freebie. And the online era is giving people the chance to get virtually anything they want for nada. But we’ve all got to make a living, right? Which explains why virtually every mobile billing provider is moving into inapp payments. In this issue we talked to a few of them about how such systems work, who’s using them and whether they can ever replace the archaic old process of actually paying for stuff ‘off the shelf’. Elsewhere, we quiz a bunch of industry insiders about their hopes and predictions for 2010. None of them mention world peace, but then we did only ask them about the mobile industry so don’t be too judgemental. We also talked to Out There Media about its progress in the mobile ad space and report back from the Heroes Of The Mobile Screen event…

Augmented reality in the viewfinder

4-6 News 22 Appointments 24 Shows 25 Databox 26 Network subs 28 Charts 31 Marketplace 36 Discontent www.mobile-ent.biz

January 2010 3

NEWS

That’s your vacant lot nce every few weeks I find myself on Regent Street in Central London. As I walk southwards, I have on my right the Apple Store – a magnet to hip young designers and foreign students who need to email their parents for more money; it’s always rammed. On my left is the Nokia store, a magnet to no-one, a space in which the number of staff nearly always exceeds the number of customers. So I was not surprised when Nokia confirmed it would close the shop, along with two more US flagships (although it will keep open seven other outlets in the UK). What the hell was Nokia thinking, locating its store opposite Apple’s? As much as it wants to be, Nokia is not a style brand. It’s simply not cool. And those of us not yet seduced by the Apple cult like it that way. But

Apple knows most electronics stores are poorly staffed and display products that are password protected. So, instead, it has stylish interiors, wide aisles, working devices and a knowledgeable team. it doesn’t mean we want to hang round its retail outlets. Nokia’s retail volte-face follows a similar one by Sony Ericsson a few months ago, and would appear to end the fantasy that a mobile phone manufacturer can be a retailer. All except Apple, bucking the trend in retail as it has in mobile. It was derided for hitting the high street in 2001, but now runs more than 270 shops around the world, and makes big money from them. Apple knows that most electronics stores are badly lit, poorly staffed and display products that are locked down and password protected – if they work at all. So, instead, it has stylish interiors, wide aisles, working devices and a knowledgeable team. It’s not that hard. But then it only works because, as telco thinker John Strand memorably said: “Flagship stores are important in the fashion industry: Apple is fashion. Nokia is consumer electronics.” And so Apple ploughs its own furrow again. But what’s this? Microsoft has just opened its first stores. They look just like Apple’s and there’s already YouTube clips of ‘happy’ staff bursting into dance. Yep, it’s as toe-curling as it sounds. Insert joke here about the stores taking ages to open. Tim.Green@intentmedia.co.uk; @timgreen64 4

January 2010

New start for content specialist End2End responds to market changes by switching focus from portal management to app billing LONG-established content specialist End2End is terminating its portal management contracts with its many operator partners to address the thriving application market. The firm will now use its expertise in operator payments and retailing to provide billing connectivity for handset-based app stores. In fact, it has been experimenting quietly in this area for the past 18 months, providing the payments platform for embedded content products in handsets ‘from the factory’. At its peak, End2End ran five storefronts and supplied a platform for seven more. The switch is merely a change of focus, and doesn’t signal its exit from the mobile content space. Sven Hålling, VP of marketing at End2End Content Services, told ME: “It’s no secret that operator stores are struggling, and we certainly don’t look at that space and see

No-frills Gorilla UK MOBILE services enabler Gorillabox is publishing ‘no hidden extras’ prices on its site in a bid to banish confusion among customers. The firm believes fully transparent pricing will reassure brands and content owners looking to develop mobile interaction with customers, but are fearful of hidden costs. Gorillabox is best known for video services, but also offers site builds, reporting and analytics. Christian Harris, CEO of Gorillabox, said: “We’re determined to simplify the ecosystem for companies wanting to access the channel. Pricing across the industry has been kept deliberately opaque by service providers in an attempt to confuse and inflate prices. We’re pleased to break the mould with a transparent fixed-fee model.” www.gorillabox.com

Sven Halling, VP of marketing at End2End Content Services

hockey stick growth. The market is changing, and in the last month we’ve seen the attitude of the operators change too. They want to stay in the loop, and the way to do that is through billing.” While End2End can offer credit card, PayPal and other forms of payment, it recognises that operator billing is where the real

volumes are, and its background makes it wellplaced to benefit from this. End2End moved into content portals after it bought the Swedish multi-player specialist Terraplay in 2007. The firm was acquired in 2006 by MACH and was split up in End2End Content Services and End2End Connectivity. www.end2endmobile.com

Top-grossing iPhone apps revealed NAVIGON’S $90 Mobile Navigator grossed the most of the 100,000 apps available on the Apple App Store in 2009. The location-based app was one of many pricey products to make the top ten. Meanwhile, EA bagged four of the best selling games bought by iPhone and iPod Touch users. Elsewhere, Gameloft contributed two titles, but there was also room for publishers of cheaper products, such as Firemint, whose 99-cent game Flight Control came seventh. BEST SELLING APPLICATIONS: MobileNavigator North America ($89.99) MLB.com At Bat (Free)

Textfree Unlimited ($5.99) Tom Tom ($99.99) Golftshot: Golf GPS ($29.99) SlingPlayer Media ($29.99) ColorSplash ($1.99) Pocket God ($.99) Quickoffice Mobile Office Suite ($9.99) The Moron Test ($0.99) BEST SELLING GAMES: The Sims 3 ($6.99) The Oregon Trail ($4.99) Need for Speed Undercover ($4.99) Medden NFL 10 ($6.99) Tiger Woods PGA Tour ($4.99) Assassin’s Creed ($4.99) Flight Control ($0.99) Cooking Mama ($6.99) Civilization Revolution ($6.99) Wheel of Fortune ($4.99) www.itunes.com

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Emblaze or ELSE

Orange App Shop open for business Giant operator set to compete with Java-based app store launch

IS THERE such a thing as a radical handset UI? Handset maker Emblaze thinks so. Its new phone, the ELSE, showcases a UI that is based around what looks like a fan emerging from one side of the touchscreen. The user uses their thumb to roll around the ‘spokes’ of the fan to find the feature required and then lets go to open it. It’s fast and needs only one hand. The UI is powered by ELSE Intuition, the mobile platform jointly developed by ACCESS on the Linux platform. Emblaze, soon to be renamed ELSE, claims the UI will differentiate it from other phones and accelerate the triumph of the mobile over multiple consumer electronics devices.

THE long awaited Orange App Shop has finally been launched, offering one million customers over 5,000 pieces of content. The storefront client is now available in the UK and France as an over-the-air download, and will link Java, Android, BlackBerry, Symbian and Windows Mobile apps. Naturally, carrier billing is built in from the start, so customers will pay for apps on their mobile bills. The operator says that in January, it will start preloading the client on the Nokia 6700 and Sony Ericsson’s W995 and U100i, before launching it for phones made by Samsung, LG, HTC, Motorola and RIM. Given that many of these devices will run their own app stores and those of a third party OS, there could be interesting ‘real estate’ battles going on. In 2010 Orange will launch the store across Europe, including Spain, Poland, Romania, Switzerland, Slovakia, Belgium, Austria, Moldova and Portugal – with localised content in each case. Christophe Francois, director of multimedia at Orange, said the shop will appeal to the mass market. “Not all customers are as advanced as the early adopters of Android,” he said. “Most don’t need to see 140 weather forecast apps in the shop. They just need a couple of good ones.”

www.emblaze.com

www.orange.com

[IN BRIEF] Paper Boy delivery Veteran UK developer Elite has created a version of Paper Boy for Phone and iPod Touch. These versions went live on December 18th, with non-English-language versions in the pipeline. Elite Systems has published more than 80 titles and in excess of 300 SKUs for more than 20 different devices.

Tapping up Samsung Samsung touchscreen sales leapt four fold in 2009, shifting ten million in Jan to Nov 2008, and 40 million for the same period in 2009. It says touchscreens will account for about 20 per cent of its mobile sales this year, against five per cent last year. This strategy will include more localised designs. The firm said its global market share in handsets rose over 20 per cent for the first time in the third quarter, with its telecom unit posting a profit margin of ten per cent in the third quarter.

Rihanna’s Ovi exclusive Nokia has released an official Rihanna app on its Ovi Store. It is only available for the N97, X6 and 5800 XpressMusic. It offers news, photos and videos to fans, as well as music samples and information on the singer’s upcoming tour dates. It also links in with the Nokia Music Store, where fans can buy the star’s latest album Rated R.

SurfKitchen data boost Aussie operator Telstra registered an 11 per cent rise in revenue on ‘TelstraOne Experience’ handsets using the SurfKitchen UI. These devices were launched in May 2009 with a UI based on the SurfKit Mobile Internet Platform, which accesses services via a ticker on the bottom of the screen. Results showed TelstraOne Experience users were 60 per cent more likely to use their phone on a weekly basis to access the mobile web than regular 3G mobile customers. Mobile data use was almost seven per cent higher.

Springtime for Okto US mobile VAS specialist Spring Wireless has bought Brazil-based Okto. The latter offers billing and messaging services to brands and operators across Latin America. Terms were not disclosed. Spring Wireless has also received an equity investment of $66 million co-led by Goldman Sachs and US venture capitalist New Enterprise Associates.

Argentinian Stream

Lunch is on MIG EXECS from M&S, Spotify, ITN, EA and many more gathered for MIG’s Digital Media and Interactive Lunch last month. They heard presentations on the past, present and future of mobile media from, respectively, Mike Short, (VP, Telefonica Europe) Jess Greenwood (deputy editor, Contagious Magazine) and Rory Sutherland (vice chairman, Ogilvy Group). www.migcan.com www.mobile-ent.biz

Mobile Streams will target low-end mobile users in Argentina with textbased alerts that deliver news, weather, sports, horoscopes and more. The content distributor already runs mobile content clubs, which bundle text alerts with items such as ringtones, wallpapers and videos. These new services are targeted at users without WAP and GPRS access. Alongside this, Mobile Streams will also launch new text-based mobile marketing services.

January 2010 5

NEWS

Nokia: Ovi was just a stopgap Handset maker says a new version is coming Claims nearly one million app downloads a day in latest update NOKIA has admitted that its app store Ovi was an interim service designed to consolidate its many content platforms. George Linardos, the firm’s VP of product media, told ME: “We had this jambalaya of services – Download, MOSH and WidSets. Looking at them, it was obvious we needed to consolidate one place for consumers to go, put the full weight of our distribution behind it, and provide a single point of entry for publishers.” So it decided to take an interim approach of using some of the components of its existing platforms to get up and running quickly – while building the all-new platform in the background. This was before the Apple App Store changed the standards by which such things are measured – and didn’t reflect well on Ovi. Consequently, Nokia’s been fixing bugs and introducing features like

Nokia’s new Ovi will have improved speed and reliability

search and re-downloading that should have been there from the beginning. However, Linardos says the changes – and the rollout of the Ovi client on new Nokia handsets – have transformed download volumes. “We’re doing just under one million downloads a day, and our download numbers are growing 100 per cent month-on-month.” Next comes the entirely new Ovi, with more speed,

better UI and improved reliability. Nokia is also working on providing better analytics to developers, while introducing operator billing in more countries – it’s currently enabled with 50 carriers. The new Ovi client should be available in a few months. It’s been quite a month of humility for Nokia – the firm also confirmed it would close its flagship UK retail store, and two more in the US. www.ovi.com

App ads? Keep all the money… UK-BASED ad exchange Admoda is celebrating the launch of its iPhone/Andoid app ads by offering 100 per cent payouts to developers. The offer is open for app developers who sign up with Admoda (or its sister firm Adultmoda) before the end of February 2010. They will receive one hundred per cent payout for the first 30 days from when they start running Admoda in-app adverts.

Terry Jackson, CEO of Admoda, said: “We have had many enquiries from app developers this year asking when we will be launching our app ads. The app developers all had similar gripes with the current in-app ad solutions on the market – inappropriate ads, low pay outs, and low fill rates resulting in low eCPMs. We aim to help address that with our straightforward solution.” www.admoda.com

Playboy iPhone app: … And get free all about the writing personalisation data too PLAYBOY has finally got its first app onto the iPhone App Store and it’s a magazine-type product full of interesting articles – lots of brain food for horny teenage boys. The app, developed by India’s Jump Games, gives fans of the magazine a glimpse of the latest issues, along with exclusive content such as free Rabbit Head and Playmate wallpapers, and a Playmate video clip. It’s for the over 17s, but there’s no nudity. Consumers can also download a new edition of 6

January 2010

the app on the same day Playboy’s new issue hits news-stands. Archived editions will be available through in-app microtransactions with the launch of the Jan/Feb double edition. The app costs $1.99, and the November and December editions are available now for $1.99. The release has re-heated the debate about what’s permissible on the Apple App Store. In the past, Apple has okayed ‘upskirt’ apps while banning satirical political cartoons. www.playboy.com

PREDICTIVEINTENT has developed what it claims is the first personalisation platform pitched at ‘everyday’ portals – and it’s giving ME readers the chance to try it for free. The firm is granting a 30 day trial to any firm with a content service or WAP site that wants to see how revenues can be improved by PredictiveIntent’s behavioural profiling. It says its solution is more effective than existing

offerings, which merely present ‘bestsellers’ and ‘most popular’, by displaying relevant content based on previous visits/purchases and behaviour in the current session. It takes around two days to set-up and is managed on a web-based content management system by PredictiveIntent. ME readers can get a free trial at www.predictiveintent. com/free-trial-form. www.mobile-ent.biz

Learn more: Mobile World Congress 2010, hall 1, G05 or visit http://mwc.materna.com www.mobile-ent.biz

January 2010 7

January 2010

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IN-APP PAYMENTS

Inside job Apple’s decision to permit in-app payments is transforming the App Store and prompting a re-think elsewhere too, discovers Tim Green… here was relief and excitement last summer when Apple launched version 3.0 of its iPhone OS and confirmed it would enable in-app payments. With all the hype around ‘freemium’ business models and the downwards pressure on average app prices, this was seen as the beginning of a new era by the iPhone developer community. But the initial delight dimmed when it emerged that only paid-for apps could offer micro-purchasing. The option didn’t exist for free apps. What worried developers was the prospect of paid-for apps that cost 99-cent, but required an in-app payment to remain active after 30 days. This would not serve customers well. Rather more obviously, it denied developers the chance to explore the freemium model for themselves. Happily, Apple relented in October, kickstarting a new era for the iPhone community. It’s easy to explain the re-think. All payments

Consumers who want free stuff don’t want to pay anything. A very small proportion will, and that’s fine when you have a vast user base www.mobile-ent.biz

are processed through a user’s existing iTunes account, with Apple acting as payment processor and getting its 30 per cent cut every time. Suddenly, in one strategic move, Apple gets the chance to monetise all that ‘free’ stuff that was previously off-limits. Indeed, the API is set-up to permit all sorts of billing options, not least subscriptions. This means that

developers can just set a recurring payment event for regular updates (like, say, a new magazine edition) without having to send annoying alerts to users. It’s felt that the move will divide content offerings into premium and free, thus reducing the quantity of so-called ‘lite’ apps that require users to download an entirely new app to access full features. Already, the changes are taking effect. Ngmoco’s Eliminate Pro shoot-em-up game quickly became the seventh highest grossing app in the App Store, even though it’s free app, all of its revenue came from the in-app purchasing of virtual goods. Meanwhile Pocket God creator Bolt Creative reported that micro-transactions contributed to 27 per cent of its revenues since in-app transactions were made available. That said, not everyone believes in-app payments will make a huge difference to the free space. Anil Malhotra, SVP of alliances and January 2010 9

IN-APP PAYMENTS

Above: Anil Malhotra, SVP of alliances and marketing at Bango (left), and Rob Weisz, director of wholesale at MIG (right)

marketing at Bango, said: “Consumers who want free stuff don’t want to pay anything. A very small proportion will, and that’s fine when you have a vast user base. But only a few products can deliver this, like social media or social gaming apps. There aren’t too many of those.” As a provider of multiple billing options, Malhotra is watching the space carefully. Bango, like all its competitors, is effectively locked out of the game by the fact that all inapp payments are executed through iTunes, and only iTunes. This ‘lockin’ could apply to payments on some other app stores too, when they embrace the model. BlackBerry has already announced its intention to enable inapp payments, locked into its own system (based on credit cards and PayPal), although it’s likely that Ovi will link to operator billing when it comes aboard, while 360, Orange App Shop and other operator app stores self-evidently will. Of course, this uncertainly could all be by-passed in a browser-based future – letting companies like Bango fill their boots. Malhotra explains: “The challenge is identifying the user every time a billing event takes place, and doing so in a way that’s not instrusive to the user. That’s easy with a pre-established payment channel, more of a challenge for companies like us. The best way to do it is via the mobile web in such a way that you don’t have to open the browser every time. A major part of our strategy for 2010 is to address this.”

Until then, there’s always Java. Old-school downloads from operator portals or via D2C channels can easily be embedded with this functionality, even if the billing method is clunky old PSMS (or PayForIt in the UK) and there are old legacy handsets that can’t handle it. Oh, and then there are legal restrictions in some territories. Michael Whelan, director of TxtNation, has seen demand soar for this functionality in the last six months. “I think people are suddenly thinking about the potential of this business model, and there’s more device support for it. It’s easy to do, as long as you bear in mind the regulatory stuff,” he says.

to deal with it. End2End was a key player in operator portal management, but is now re-orienting around managing the billing component of embedded handset apps. Then there’s Accumulate, which is gathering interest around a system than embeds payment functionality into downloaded games – effectively turning a Java game into a storefront. Of course, a general issue around all such ideas is scale. While it’s possible to bill using PSMS all over the world, you need to find a partner that connects to operators everywhere. And while the biggies like Netsize, mBlox and Ericsson have good reach, they’re not ubiquitous. That’s good enough for most, but some of the major brands now fiddling around the app stores want universality. Another poser for brands and content providers is the issue of rev shares. The industry norm is around 30 per cent on app stores, but in some countries PSMS is even higher than this. While credit cards take a fraction of this, the fact is that users prefer m-payments. Rob Weisz, director of wholesale at billing enabler MIG, believes the industry is missing a huge trick here. “The e-commerce industry in the UK is worth about £50 billion a year; m-commerce is worth £350 million. Why? Because what retailer wants to give away ten times more than they do online with a credit card payment?” Ah, rev shares. Ten years on and they’re still the cause of so much unhappiness.

The e-commerce industry in the UK is worth about £50 billion a year; m-commerce is worth £350 million

January 2010

Indeed, there have been notable successes in this area. Russian games developer Dynamic Pixels found its fortunes transformed when it stopped hoping for deck placement and launched an aquarium-based tamogotchi-style game called AquaPhone, which it gave away and then monetised with in-game extras bought using premium SMS. AquaPhone built a user base of over 1.4 million, and the publisher claims to have generated well over one million dollars – and that’s after onerous operator PSMS shares were deducted. The potential of the market is such that a well-established company like End2End is changing its entire focus

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2010: THE YEAR AHEAD

Forward thinking If we could see into the future we’d all have applied for jobs at AdMob while we had the chance. We didn’t. But that hasn’t stopped Mobile Entertainment asking a star chamber of industry execs for their predictions for 2010…

January 2010

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2010: THE YEAR AHEAD

Below from left to right: Eric Hobson, Miguel Lopez-Quesada, Neil Andrews, Harry Dewhirst, Paul Reddick, Peter Cowley and Tim Green

“The most notable change in mobile will be the further opening up of the handset space.” We’ll see even more consolidation among big publishers, and there’ll also be further polarisation in prices charged. Basically, I think the market will divide between high-end price items and free/ad funded products at the low-end. In terms of distribution, I think the Apple 70/30 model will start to apply across the operators in-house stores, while some smaller carriers will completely outsource their stores. Also, piracy will get worse and start to be a major problem, and Nokia will eventually get the Ovi Store right. Eric Hobson CEO, Connect2Media We will see 2010 as being the year that genuine mobility starts to be part of mobile content as location finally comes of age. The widespread availability of GPS-enabled smartphones coupled with the addition of geolocation to popular search engines such as Facebook and Twitter will make location a key part of all mobile services. Simon Buckingham CE, Mobile Streams and Zoombak

operator walled garden is dead, and to be immediately replaced by the handset app store walled garden. Real world companies will still marvel at how fragmented the mobile channel is and cut back on their mobile investments. Again. Or, we’ll all ‘embrace the browser’, make mobile the ubiquitous channel it has been yearning to be and finally get this market kickin’ arse! Chris Noone Director, Nitro Mobile Three key trends for 2010: another year of growth for mobile apps, more M&A activity and a surge of activity in multi-platform content development across mobile, web, TV and other channels. Miguel López-Quesada General Manager, Zed TV

The Google AdMob deal will cast a long shadow. Every man and his dog is going to buy or open his own version of AdMob. Shashi Fernando CEO, Saffron Digital

Mobile location will become more important, relevant and monetisable than ever, presenting lots of exciting new revenue possibilities. Meanwhile, I fear operators will continue to miss the point about content and fail to understand that consumers don’t wish to pay them to own it. On a broader level, we’ll be trying to understand what Google WAVE is all about. We’ll be drowning, not waving in it. Michael Ohajuru Director, Materna

2010 will be the year we start to think about the choice between the app store and the browser. It could be when we all finally agree that the

The key trend has to be the further proliferation of people accessing the internet from mobile devices. This will prompt an even wider range of

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social networks and brands to invest in the mobile channel. Neil Andrews Head of Portal Advertising, 3UK I think the winners in 2010 will be companies that invest in their teams and evolve their products and services in line with market changes. In the ad space, companies that own or represent mobile ad inventory like Millennial or Quattro and large media owners like Yahoo! and Sky will do well. Ad agencies that can truly convince brands how to use mobile effectively will come up trumps. There are some huge budgets out there that need to be spent in mobile. Get ready! Harry Dewhirst COO, Ring Ring Media I really believe 2010 will be the year agencies and advertisers finally embrace mobile advertising. The main reason for this is the roll-out of supporting technologies such as mcommerce, apps, NFC and couponing. Because of them, brands can make money on their mobile destinations, and this is what will get them to spend media budget on promos, and use mature media sales businesses to do it. Alex Rahaman Director, Unanimis 2010 is the year that mobile applications will become a more important outlet for publishers and media brands. With traditional approaches struggling, apps will be logical extensions that connect

people to news and information. The important change will be in using mobile apps as a connection to a broader experience – rather than just for playing games or indulging in novelty. Companies will need to recognise that distribution, monetisation and on-going innovation is king in the mobile app space. Paul Reddick CEO, Handmark The bottom is going to drop out of the apps market, because there is too much competition. Prices will drop. Peter Cowley MD of digital media, Endemol UK The most notable change in mobile, will be the further opening up of the handset space. The top five we had for so long have been blown apart by the arrival of iPhone and Android. That moment of panic people had about leaving the comfort of Nokia or BlackBerry is evaporating. It’s okay to try HTC or Huawei now. Phones look alike, and if they’re running a third party OS, they even run the same. Much as I’d like to see genuine mobile tech like Augmented Reality or 2D barcodes hit the mainstream, I’m not convinced they’re ready yet. Instead, I think momentum will be made by m-payments and NFC. Watch Barclaycard and Mastercard go in 2010 – and see how operators start to realise that a tiny slice of trillions of transactions might be preferable to running their own content operations. Tim Green Executive editor, ME January 2010 13

OUT THERE MEDIA

Outstanding With 16 operator deals, Out There Media seems to have something that carriers like. Tim Green spoke to the mobile ad provider’s CEO, Kerstin Trikalitis, about the key to its appeal… 2009 was the year Out There got noticed. Why was this? I think most operators are coming round to the idea that they can’t be advertising companies. So we go in and give them an end-toend platform that comprises sales, creative, media planning, buying and the underlying ‘Mobucks’ technology platform. They don’t have to spend time or money licensing a platform or learning how to run it, and they get revenues from day one. It seems to work. Are advertisers buying in? We’re working with over 150 now, including Nestle, RIM, Coca-Cola and Peugeot. There’s a spill over effect once you get past a certain scale. We now have 16 operator deals in 15 countries – and access to over 120 million consumers, many of them exclusive to us. Ultimately, advertisers want reach and if you can

guarantee millions of consumers, then they start to pay attention. And with targeting, the proposition is even stronger. While advertisers want reach, don’t they also want local expertise? Absolutely, which is why we aim to hire people in every country we enter, because there’s no substitute for a team that lives and breathes the inventory at a local level. That’s eight teams now, with six more in Q1 2010. What results do you achieve? An average of seven to ten per cent click through. This is possible when you have targeted campaigns. You have this ‘end-to-end’ policy. But some of the tier one operators have their own sales teams... This is the number one reason why the market hasn’t fully taken off. In a country where every operator has its own sales force or an exclusive partner, it’s just too much hassle to deal with multiple partners and advertisers get frustrated and decide not to add mobile. Anyway, operators are struggling with the self-managed model. Only Turkcell has really made it work. We’re about to announce a contact win with one of Europe’s biggest operators. They had wanted to buy-in a platform and run it inhouse. They changed their mind. Even so, some operators are working this way. Have you anything to offer them? Well, we have a ‘secret sauce’ that complements what they do extremely well, but I wouldn’t want to expand on that here.

Kerstin Trikalitis is looking to strengthen the company by setting up six more teams across Europe in early 2010

What advertising channels do you use? Targeted SMS or MMS. They account for around 65 per cent by revenue, and half of the traffic is MMS, which has never taken off with consumers but is perfect for advertising. Of the rest, 20 per cent is operator portal banners,

ringbacks, systems notifications and other channels. Why does Out There target operators and not publishers? We took that decision long ago. It’s challenging working with operators because of due diligence, quality of service issues and the decision ‘circle’. It’s our speciality though. And it’s worth it because operators are uniquely capable of getting people to opt-in to receive ads. No matter what happens with the mobile web, there are channels like missed call messages, credit statements and so on that are great for advertising and will always be so. That said, we can address the publisher space. AdMob has done a great job and we work with them sometimes on campaigns. Isn’t there a danger that outsourcing goes in cycles? How long before operators think they can make more money without a partner? I don’t see the cycle turning like that in advertising. The money they pay would be swallowed up in costs. The downturn has helped us. Operators are looking at CAPEX and focusing on core strengths. They’re outsourcing more. We’re in the era of specialisation. There are big players in your space – Ericsson, Openwave, Amdocs, Comverse. Does this concern you? It’s true these companies have operator relationships going back decades. But it turns out that carriers want partners that can bring them money, advertisers and a solid track record. In fact, one of these giant companies recently approached us about sharing resources, so we’ll see what happens. What’s the long term future for mobile advertising? For all our progress, it’s still an immature business. Ultimately though, there has to be consolidation in the sector, with three or four major specialists worldwide. January 2010 15

BADA OS

Samsung’s big Bada bid Bada is the feature phone OS with smartphone functionality. Great. But Samsung’s new platform also adds more fragmentation to an already complex marketplace. Tim Green reflects… martphone was, is and always will be one of the most useless phrases this industry has ever invented – and we’ve made up a few. God help us. At first, it existed to differentiate handsets with email, video, MP3, document reading and other ‘advanced’ functions from dumb feature phones. But when big selling feature phones like the Tocco easily embraced the sophisticated stuff, the only differentiator became the third party OS. Since when does the average punter care about that? The blurring of the lines appears to have underpinned the thinking behind Samsung’s Bada platform/OS, which launched last month. Through many long speeches the firm rammed this idea home. Shame, then, that it did so by calling Bada a ‘smartphone platform for everyone’, rather than eradicating the ‘S’ word for good. Ho hum. So what is Bada? Well, in Samsung’s words it’s a ‘feature-rich platform that delivers enhanced mobile experiences for consumers, and a support programme for developers’. Translated, it seems to be a new proprietary OS and UI that will run across every touch-enabled phone shipped by Samsung next year. Given that the firm sold 40 million touchscreens in 2009, and will surely sell more in 2010, that could make Bada a serious rival to Android, Symbian, Windows Phone and iPhone within 12 months. Handets will start shipping with the OS during the first half of next year to 50 countries. Developers will be able to program in C++ for Bada handsets and will get deep access to hardware capabilities such as GPS, contacts and camera. There will also be APIs

The Bada advert from Samsung – depicting a world of opportunities for the mobile user

January 2010

$2.7m reasons for developer support Samsung is making a beeline for developers, with a host of initiatives to stimulate Bada projects. The headline grabber is a Developer Challenge, offering a $2.7 million prize fund, and a top prize of $300,000. This will be supported by developer days in Seoul, London, San Francisco and other cities to be confirmed. for in-app purchasing, face recognition, multipoint touch and Flash support. This is an improvement on the current feature phone options, which support only Java or Brew. Bada apps will eventually be able to stream video, which was the main focus of the most interesting of the presentations by Samsung’s publisher partner, Blockbuster. It intends to use Bada in a flagship application for streaming, renting and previewing films as part of a multi-channel offer. It’s a bold move by Samsung, which is clearly throwing its whole

weight behind this ‘every phone is a smartphone’ philosophy. This has been rumbling for a while – certainly since October when the firm flew hundreds of partners and press to Milan for a lavish launch of the Corby/Genio range – a handset series that packed advanced features into a fashion-centric form factor. So, what does Bada mean for Samsung’s commitment to Symbian, Android and the rest? Well, the firm has denied it’s pulling out of any of them. But it’s hard to imagine any further support for the fading Symbian option, while the appearance

of just one Android device to date (the Galaxy) suggests the Google OS is hardly front of mind either. This was far from the only question that went unanswered. Although Samsung stressed that Bada apps will be downloadable from the recentlylaunched app store, it wouldn’t be drawn on a rev share. Samsung’s sheer market power – the world’s second biggest OEM – means that Bada can’t be ignored, but it’s more fragmentation in a mobile platform family that already includes Android, Symbian, Linux, Windows Mobile, Java and BREW. www.mobile-ent.biz

melodi MOBILE MEDIA SOLUTIONS

www.mobile-ent.biz

January 2010 17

AUGMENTED REALITY

Dutch firm Layar kick-started the AR era with a browser that overlays the real-world view with text

They think it’s all overlay 2009 was the year augmented reality became actual reality. Will it last? Mobile Entertainment investigates…

January 2010

hen you get to a certain age, you realise that there’s nothing new under the sun. X Factor/American Idol is just Opportunity Knocks with phone voting; Paris Hilton is Jayne Mansfield. It applies to tech, too. If you left school before the nineties, you’ll remember virtual reality. And if you remember VR, you won’t have fainted with excitement at its grandchild, augmented reality. Which is not to minimise the impact of AR – it just reminds us that technology itself is never enough: there has to be the right hardware, value chain and consumer

psychology to make it fly. Although there had already been advances in the Far East, that point arrived for AR in the late summer when Android provided the handset and the OS to enable Dutch firm Layar to debut its Layar Reality Browser. This app uses the handset’s compass to figure out what direction the user is facing when using the app. It then overlays the view with text and graphical information. Layar’s vision is of an open platform in which other developers can create their own ‘layers’ for the browser, and that this will populate the app with local information all over the world.

At launch, some of these embedded extras included: London Tube Stations (the nearest stations flash up); Food and Drink (nearby fast food outlets); Wikipedia (scans for anything that has its own Wikipedia entry) and Tweeps Around (identifies Twitter active near you). Layar says it now has more than 1,000 developers creating content for its browser. People got very excited. And shortly after, another cool app ramped up the AR fervour. Google’s Sky Map for Android showed what is possible when you point the camera in the air at night – the free programme uses GPS, compass, and www.mobile-ent.biz

AUGMENTED REALITY

other data to label the night sky. Brian May must have been thrilled. It was fantastic for Android, because the tech had been denied to iPhone developers until Apple launched version 3.0 of its iPhone software in the summer. When it did, though, the inevitable migration started. By October, Mobilizy had launched its Wikitude AR browser on the Apple platform, which pulls down data from Wikipedia, Qype or Wikitude’s own database of usergenerated notes and guides. Shortly after, Mobilizy released a twist on the app based around motoring, Android: Wikitude Drive. Rather than show directions on a map, it overlays them on the handset’s camera feed. The app pulls navigation data from the web, and supports voice commands from users. Sky Map and Wikitude Drive illustrate the flexibility of AR, reminding the trade that it’s not just about pointing a camera at a street view. Philipp Breuss-Schneeweis, CEO of Mobilizy, says: “Wikitude Drive is part of a natural evolution in mobile augmented reality. I believe there is much more to AR than simply planting coloured points of interest on a cam-view. People want to know how to get to these POIs, and Wikitude Drive shows the way.” Inevitably games developers have begun to explore the tech too. Actually, there was a prototype of AR gaming released back in 2004, when the Jamba-owned studio Ojom release Mosquitoes. This overlaid insects into the camera view, which the user could zap by directing their viewfinder. The new AR games aimed higher than this. For example, New Zealand developer HIT Lab launched two iPhone titles Drift and Splatter Bugs under a dedicated publishing brand Slapdown Games. Each one requires the user print out a physical ‘game card’, which then launches the game. Without doubt, AR is the industry’s most-hyped tech right now. Analysts are already throwing projections at it, with ABI Research estimating a $350m industry by 2014 (up from $6m in 2008), while Juniper Research is far more bullish, projecting $732 by the same period. Of course, no one is quite sure how AR should be monetised, although obvious possibilities include pay-per-download, micro-payments and advertising. www.mobile-ent.biz

AR was used by Mini to create a 3D image of the popular car (left) and to show off the potential of the technology. Vic Gundotra (right), Google engineering VP, believes visual search will become second nature – a “mouse for the real world”.

The four lives of AR Dutch mobile consultancy SPRX has identified the four stages of AR as follows: 1. Physical world hyper linking Another way of describing 2D image recognition by mobile. Train the camera on a barcode to receive a link to redirect you to a mobile site for more information. The area has been hampered by tech fragmentation and consumer indifference. 2. Marker-based AR This is an upgrade of 2D barcode scanning wherein the code is transformed into a 3D image or animation. The first free toolkits worked online with a webcam,

and the next step up is Marker AR using mobile. 3. Markerless AR This is the AR we’re most familiar with now, in which the phone camera view is overlaid with information made relevant by the GPS position and the compass. 4. Augmented Vision This is real sci-fi stuff, the point at which AR is integrated into contact lenses so that – potentially – everything becomes AR-enabled. It’s possible that print, radio, TV, the web and all other media could be imbued with the technology. It’s equally possible it won’t happen at all.

AR explained AR apps and browsers include layers of metadata about physical objects which appear in the camera viewfinder and have been geotagged: either by the developers of the app itself, third-parties or even members of the public. The app then identifies where the user is via the GPS, and which direction he or she is facing via the digital compass. AR therefore requires five key facilities within a handset, namely: • Camera • GPS • Broadband connectivity • Tilt sensors (accelerometer) • Digital compass These are generally embedded in only the more high-end devices. The first handset to meet all these requirements was the HTC Dream/G1. But from summer 2009, many more Android devices emerged while iPhone running 3.0 OS and the Nokia N97 also enable AR apps.

Interestingly, brands are already experimenting with AR – especially beer brands. Stella Artois teamed with AcrossAir to launch a mobile app that lets US drinkers find their nearest Stella-dispensing bar by waving their cameraphone in the air. And another application of AR – using ‘markerbased’ tabs (see box) – could be even more exciting for advertisers. Here, a 2D barcode is transformed – as if by magic – into a 3D image that the user can ‘pick up’ and inspect from all sides. An early attempt at this, produced in Germany for the Mini motor car, stunned observers and became a minor YouTube sensation when it emerged in December 2008. Although it was created for webcams rather than the phone camera, it was an eye-popping illustration of AR’s potential for marketers. Any uncertainty surrounding monetisation hasn’t stopped investors racing into the space. In the last few weeks, AR firm Tonchidot raised $4m while Layar closed a $1m round. The investors must have seen potential beyond the browser, given the recent entry of Google into that space. Its Android app, Google Goggles, lets users point their camera at an object, and then get information on it from Google’s database. Vic Gundotra, Google’s VP of engineering, says: “One day visual search will be as natural as pointing a finger – like a mouse for the real world.” Google’s presence might obliterate the browser as a commercial proposition, but it doesn’t half boost the standing of AR as an idea. We’ll be looking through our viewfinder at 2010 to see how the sector benefits. January 2010 19

HEROES OF THE MOBILE SCREEN

Show me the

money!

If apps are exploding, why aren’t developers making decent money from them? That was the question raging at the Heroes Of The Mobile Screen conference in London, writes Stuart Dredge…

independent developers launching Phone may have racked up more apps with rock-bottom prices just to than two billion app downloads, but many of the 100,000 plus apps have a chance of breaking into the Top 100 chart. It’s a strategy that can released on the App Store have sunk pay off in spades if you achieve big without trace. Meanwhile, Google’s download volumes – as apps like I Android Market has well-publicised Am T-Pain, Flight Control, London issues on the paid apps front, while Tube and Pocket God showed in 2009. Nokia’s Ovi Store continues to be Google’s Hugo Barra argued that roundly criticised by developers for its more mobile publishers are making poor user experience. And while money than they were a few years mobile advertising paid off ago, contrasting the money-making handsomely for AdMob recently potential of the current generation of when Google agreed to buy it for app stores with the days when a big $750 million, there is still scant carrier deal was the only route to evidence of mobile developers rolling mobile profitability. It’s an argument, in ad revenues. but not a convincing defence. It was at the Heroes Of The Cold hard realism was injected by a Mobile Screen event in London, last session at the conference, where a month, that a debate with the panel of VCs discussed the mobile punchy title ‘Who’s Making Money in Mobile?’ was hijacked by the topic, space. Greycroft’s Ian Sigalow admitted he’d looked at more which then 1,000 mobile sidetracked into a “In order to make all than apps in the last two discussion of the of this work, we still years, and that ‘none interesting-butare making separate issue of have a huge amount ofthethem type of money downloads versus of plumbing that goes you’d expect to see web apps. A panel for a venture-backed comprising Google, into it, and that’s start-up.’ He also Microsoft, Research where the money is.” said VCs are holding In Motion and off on widespread Symbian wriggled a investment, due to the hurdles they bit. “Very few developers are making face in generating revenues. money,” admitted Symbian’s Oliver In fact, they are focusing more on Gunasekara, and eyebrows were infrastructure and technology firms. raised when RIM’s Mike Kirkup added: “It depends on your definition “There’s a lot of money to be made, but I’m not talking about applications,” of making money.” said Peter Globokar from Mooreland However, Kirkup did put his finger Partners. “Yes, there’s applications, but on one problem often cited by developers – their attachment to paid in order to make all of this work, we downloads. “A lot fall into the spell of still have a huge amount of plumbing the one-time download payment, and that goes into it, and that’s where the a lot are being crushed by it,” he said. money is to be made.” VCs haven’t been scared off entirely “We want to give people the – Shazam recently took investment opportunity to experiment within from Kleiner Perkins Caufield & Byers’ their own apps, whether you offer it iFund. But VCs and developers alike for free, or if you want to upgrade for are starting to wonder whether the a freemium type model.” main financial beneficiary of the apps The App Store’s rush towards 99boom will remain Apple for some time. cent price points has seen 20

January 2010

Mobile leaders discussed money matters at the Hereos Of The Mobile Screen conference last month

www.mobile-ent.biz

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JAMES MACDONALD

CAROLINE FINCH

Former Virgin Mobile content chief JOHN CONLON has been appointed senior business development manager for mobile at Barclaycard. In his new role he will lead the credit card firm’s many excursions into mobile, not least in NFC, which it has already run trials for with O2 and Nokia.

Mobile Streams has a new COO. The global mobile content retailer has hired ARND ASCHENTRUP to the newly created position. He will be responsible for managing all aspects of Mobile Streams including licensing, preparation, distribution and reporting. Arnd will also take charge of human resources and legal services, as well as responsibility for the European commercial region. Blimey, what a job description. Arnd joined Mobile Streams in 2006 when it acquired Cyoshi Mobile, which he co-founded.

2ergo has hired ex-O2 media chief JAMES MACDONALD to be its new head of media and entertainment. The man known as JIMMY MAC has more than 20 years experience in mobile, most recently as director of sales at O2 Media and head of mobile at Unanimis. 2ergo is active in mobile publishing, content management, interactive messaging, ticketing and couponing, mobile payment, and security solutions. DAVID KO has been handed responsibility for all of Yahoo’s content sites in North America, including news, sports and finance. He takes over from JEFF DOSSETT, who left in May. Ko was made global head of Yahoo Mobile at the beginning of the year. His new title will be SVP of audience and mobile for North America. Meanwhile in the UK, CAROLINE FINCH has joined Yahoo UK and Ireland as category director for technology and telecoms. She will be responsible for providing insight and understanding into how consumers interact with the internet and how marketers can engage with their customers online. Finch previously worked with Vonage.

Glu Mobile has brought in BILL MILLER to replace the departing GREG BALLARD as interim president and CEO. The mobile games publisher has been searching for a replacement for a few months, but it seems it has decided on appointing Miller as a stopgap measure. “The need to start planning for 2010 is upon us, and it seemed to us on the board that it was important to put somebody in place who could drive the company through that 2010 planning process and carry it into 2010 if necessary,” Miller told ME. Spotify has recruited OSKAR STÅL from mBlox to be its new CTO. His hiring indicates music firm’s seriousness about mobile payments. Stål had been with transactions specialist mBlox for eight years. As director of development he helped grow the firm from a five-person start-up to a $100 million business. www.mobile-ent.biz

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