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September 29, 2005
Europe Trip Report
What’s this? Another ridiculously long post from Shawn Conahan? (Sorry. Look, I post infrequently, so try to pretend that I provide the same amount of content as someone who posts every day but is less...verbose than I.) So, I am back from Europe and learned a few things. One of which is that I am going to be spending a lot of time out of the country next year. You can also look forward to Rabble going international fairly soon, possibly in Q4. Overall it was a very productive trip. Here is my synopsis:
1.) The Youth Segment doesn’t want to be pushed content and hates being marketed to
2.) Blogging is mostly an American phenomenon
3.) Carriers and customers want applications that extend and enhance communication
4.) Filmmakers will embrace the mobile space and see it as a new creative medium
5.) Airport security in Spain is scarily lacking
1.) Kids are smarter than you and me
First of all, the Mobile Content World thing, was VERY worth going to. You should go next year.
The panel I was on, Reaching Out To Youth, was full of very smart guys. (And then also me.) Al Gosling is about my age and very dialed in to the youth segment. Graham Thomas from T-Mobile was very pragmatic about their product offering, and I liked what he said about providing a balanced and useful set of applications that drive consumer value. Eric Mika from Variety is one of the most capable moderators I have seen in a long time. He did a great thing. After we all were done waxing philosophical about how to capture the imagination of the youth market, he got an actual panel of kids on stage. It was brilliant. On our panel, there was a lot of conjecture about what kids want, which was (predictably) fairly wrong according to the kid panel. I remember saying that there is no “youth segment” and that kids are just like adults, only smarter. Treat them with respect and give them tools and they’ll figure out what to do with them. Try to pander to them and you fail. Much of the kid panel confirmed this.
Some examples:
- Kids don’t need or want an “iPod phone.” One guys said, “My current iPod holds 5000 songs, so even if your iPod phone holds 3000 songs, that’s still a bit of a disappointment.”
- Kids don’t need or want to download music onto their phones. None of them said they would do this at any price. Al asked them what if they could get the top 5 songs that week for free, and some of them said they might check it out, but then they asked why would that be useful to them. I think we as an industry have come to see music as a valuable commodity that everyone wants. The formula may not be that simple. Ringtones are popular because they are personalization, not because they are music.
- Kids use their phones for communication. This was an important point, because on the adult panel, there was some discussion about mobile TV and the mobile phone as an entertainment device. That was totally unappealing to the kid panel. “Believe it or not,” said one of the panelists, “we don’t have to watch television ALL the time.” WAP was generally not used by these panelists, citing a poor user experience and general unsureness about how they were being billed for it. The one occasional exception was football scores.
- Kids are sensitive to cost. Trying to get a share of their wallet is worth doing, but trying to get them to increase the size of their wallets is a recipe for failure.
- Kids are suspicious of any offer. They hate any kind of ringtone offer and assume they are scams. One panelist said that if we as an industry could get all of the television commercials advertising “just text 1234 to 5555 to get your free ringtone” off the air, we would be doing everyone a great service. They assume that any time you give authorization for any kind of payment or permission, there is some fine print somewhere that is going to cost them dearly in the form of some difficult-to-cancel subscription.
- Kids form social hives. Paraphrasing: “One person may download a ringtone and pay for it, but then it gets sent around to everyone of their friends via bluetooth, etc.” The same was true for any other kind of content.
There was more, but you get the idea. The youth segment is more intelligent than a lot of marketers would give them credit for being.
2.) Blogging is the sizzle, the steak is communication
To the people I met with, “Blogging” has little meaning in Europe. “Social Networking” means nothing except in Brazil. “MoSoSo” (short for Mobile Social Software that someone came up with) got mostly laughs when trying to describe the concept of user-generated content and networking, as did “LMNO.” I suppose we don’t need another acronym. “Community” and “communication” are all that’s required. After that, just put your app in someone’s hand and if it works well, the rest of the meeting goes fine.
This got me thinking about what blogging really is. Some people would argue that it is about self-publication. I think that is only half the equation. The reason people publish is to increase their social capital, whether personal, professional or otherwise. I am writing this now because I know that someone I have never met with whom I want to be in business is reading it and if it resonates properly, then will send me an email. There is an assumed interactivity that really makes blogging (or self-publishing in some form) part of the required toolkit to make social networking useful and relevant. What you build around it is what makes it useful. When thinking about mobile community and communication applications, keep in mind that simply one-way publishing is not enough. Nor is “social networking” in the strict sense of the word where there is no content to transact, only a personal network to leverage. Furthermore, chat, while very useful, is only a part of the equation. Overall, “Blogging” is a term that means different things to different people, but I think the winning formula is to look at blogging as a part of a larger ecosystem that forms a communication loop. I illustrated this before in the user-generated content value chain.
Anyway, free advice: If you are going to Europe with a mobile blogging application, don’t call it that. ;-)
3.) Communication and Community are the future of data apps
Data usage is creeping up to around 10% of revenue for carriers, which presents an interesting challenge. When replacing voice revenue, ideally you would replace it at a higher margin or (if equal or lower margin) higher volume. The mix of data applications a carrier offers is therefore very important when managing growth. If you offer all downloadable games, you run the risk of selling a bunch of additional high-margin revenue one month, but then the following month risk zero incremental revenue because all of those users are playing their games offline and not utilizing the network. The business model of a carrier, oversimplified, is this: Carriers build the network, their subscribers use the network, and they pay the carrier for using the network. Of course, applications work the same way. The data applications that have the highest potential penetration (and therefore potential usage) are the ones that appeal to the widest audience. Gaming, for instance, has an inherently limited market and is highly segmented among genres. The Sports category is much larger, but still limited, when you consider it is generally dominated by a male demographic. The one category of application that everyone can use is communication. Mobile IM will eventually surpass SMS in total revenue contribution. SMS, MMS, picture sharing, blogging, social networking, community, scheduling and dating applications all do basically the same thing, which is facilitate communication, and that is the apparently high on the agenda of network operators the world over.
The carriers’ basic product, voice communication, hasn’t changed much since it was introduced other than conference calling, voicemail and some other small things. I think this is because it was, from the start, the most elegant application it was going to be. It’s simplicity to value ratio is extremely high. The only way to improve it really is to change the interface, which means data. If we have been limited in our communication by the voice interface, now we have myriad options for improving it. If a picture says a thousand words, then send a picture. You couldn’t really do that a few years ago but now you can, and a whole lot more. Hence our definition of LMNO – that people will communicate using multimedia and distribution will be via a series of overlapping personal networks.
Anyway, I thought it was worth noting that all the people I talked to said they are not returning calls of ringtone and game application providers, but companies like ours are very interesting to them. Furthermore, Rabble, even in its 1.0 limited incarnation, really blew them away with its robustness and usability. (“Wait til you see 2.0,” I told them.)
4.) A diversion to San Sebastian resulted in interesting conversation
While at the San Sebastian Film Festival last week, I had a chance to chat with a small group of directors over beers and pinxtos. We were discussing whether the camera phone was a viable film production tool and whether the mobile device was a likely medium for filmed entertainment in the future. I thought I would face fierce opposition from these types of people, thinking they would view the traditional notion of filmed entertainment as too much of an artform to render on (or with) a mobile device. Quite the opposite. Many of them already shoot professionally with consumer-grade DV cameras. These guys just want to tell stories. It doesn’t matter if the story is 2 hours long or 2 minutes long. They also generally liked the idea of working with a more challenging environment. I showed them Rabble and after they got the general idea, their imaginations started to wander. While they didn’t think Rabble was the ideal interface for creating the kind of content they would want to create, (more editing features would be required to make them happy) they liked it as a distribution mechanism due to the virality of personal linking and the fact that a channel can represent a person (like a director) and can contain an unlimited amount of content. Some ideas that came up were about creating serial programs on a weekly basis like little 2-minute cliffhangers. They also said they would be keen to see more direct and instant feedback in such an environment since it’s possible. From there, we got onto interactivity. Could a film be participative? A director could orchestrate an army of actors with cell phones in a location-aware environment to go out and create the story, which the director could collect in one place on their channel and assemble to tell their story, however impressionistic it seemed to me such a story might be. To me this was just a variation on the “citizen journalist” theme but instead of news, it’s entertainment. There were some other good ideas, and it all helped me to see Media Networking from the perspective of pure artists and creators. I wish you had been there, because I am not doing their level of insight justice. Overall, it was an interesting conversation and good food for thought. Later I thought to myself that even though we have no plans to turn Rabble specifically into a distributed amateur film production engine, it’s not really up to us. We just want to enable Media Networking. We have no bias toward a particular type of media. Our users will tell us how they want to use our product. We are just the facilitators.
5.) Airport security is woefully inadequate in Spain
At the end of my trip I spent a little time in Palma de Mallorca. On the way back, I set off the alarm at the security checkpoint at the Palma aeropuerto. The security guard asked me something possibly in Catalan and I pointed to my watch as if to say, “Maybe this piece of metal set off the alarm.” He seemed to agree, and waved me on without making me go back through the metal detector. I don’t think that is supposed to happen. Is that all it takes to get through airport security in Spain? Nevermind I could have had a glock or a nina stuck down the back of my pants. Just point to your watch and off you go. So now I technically could have boarded my flight (Iberia flight 8633 to Valencia) with my possible weapon. On the plane, to my amazement, I witnessed one of the passengers get up and go open the cockpit door and start chatting with the pilots. I don’t think that is supposed to happen. I would like it better if the cockpit door were locked and entering the cockpit required some kind of special clearance. Then get this: I took out my camera phone to take a picture of this security breach so I could post it to my Rabble channel and the stewardess comes over and chastizes me because apparently taking pictures on the plane is forbidden. Taking your gun or other weapon through security and onto the plane is ok, and getting up and opening the door to the cockpit is ok, but taking a picture es prohibido. Like my cell phone signal is going to interfere with the delicate cockpit electronics and crash the plane, but the guy with the gun won't. Good to know.
I know this has nothing to do with mobile media, but I thought you would find it interesting. I know flying is relatively safe and the likelihood of your plane getting hijacked is fairly low, but does that mean we have to make it exceedingly easy to do? I thought I would remind you to take your camera phone with you everywhere and take pictures of this kind of shit when you see it and send it to me so I can lobby for increased security.
Posted by Shawn Conahan at September 29, 2005 10:44 AM