In an industry as young as mobile content, every year can seem like a turning point. But 2007 feels especially monumental--consider where the business was in January compared to where it is now. The news and trends outlined below were the major catalysts behind the industry's transformation, each chosen as much for its headline-grabbing impact this year as for its potential ripple effect across the years to come. From the home office in Wahoo, Nebraska, here are the Seven Biggest Mobile Content Stories of 2007.
Apple introduces the iPhone. For sheer advance hype alone, no story was bigger in 2007, but for the most part the iPhone delivered on its promise. The device effectively transformed consumer perceptions of the mobile media experience, delivering music, video and web services via means of a simple, intuitive user interface and wrapping it all up in a sleek, elegant product design. If you still question its impact, consider this: Earlier this month, research firm NetApplications released its breakdown of operating system market share for November 2007, reporting that in just five months since its commercial debut, the iPhone has secured a 0.1 percent share of the global browsing market, topping web browsing on all Windows Mobile devices combined. The iPhone is now the tenth most popular web browsing platform, a short distance behind desktop platforms Windows NT, Linux and Windows ME, as well as the most popular mobile browser overall.
Google launches Android. After months of frenzied speculation on its mobile future, most of it forecasting an iPhone-like device known colloquially as the gPhone, Google zigged instead of zagging by introducing Android, a Linux-based open software platform for mobile devices. The Internet behemoth also will lead a broad industry group, dubbed the Open Handset Alliance, formed with the stated goal of "fostering innovation on mobile devices and giving consumers a far better user experience than much of what is available on today's mobile platforms." In essence Google turned upside-down the conventional mobile revenue model, virtually giving away software and services in exchange for income derived from targeted mobile advertising efforts while promising "one of the most progressive, developer-friendly open-source licenses, which gives mobile operators and device manufacturers significant freedom and flexibility to design products." Which leads us to...
Verizon Wireless embraces open access. After Verizon Wireless said it will open its network to enable subscribers to use handsets, software and applications not otherwise offered by the operator by the end of 2008, CEO Lowell McAdam admitted the carrier would not have made the decision had Google's Android not pointed the way. While it's still unclear exactly how Verizon defines "open," the operator stated that early next year it will publish technical standards enabling the development community to create products to interface with its network, adding that any CDMA-based device meeting minimum technical criteria will be approved for consumer use. Moreover, any application the subscriber chooses will be allowed on approved devices. Looking forward, the move essentially forces Verizon's operator rivals to follow suit and tackle head-on their worst fear--deteriorating into little more than dumb pipes.
Handset makers become service providers. New music, video and gaming services from device giants like Nokia and Sony Ericsson further upset the traditional balance of power in the mobile industry. Faced with competition from Apple--not just the iPhone, but the corresponding iTunes digital storefront as well--handset makers are increasingly forced to develop their own content portals in conjunction with new devices, even at the risk of alienating their network partners. "We are constantly thinking beyond the phone," said Nokia CEO Olli-Pekka Kallasvuo this summer. "Devices alone are no longer enough." The backlash was inevitable, as Orange UK griped in a leaked memo that the combination of the Nokia link and Orange's own branded music service on the same handset could confuse its subscribers, prompting a threatened boycott of Nokia's new N81 device. Similar turf wars are certain to follow.
Amp'd Mobile declares bankruptcy. Amp'd wasn't the only MVNO to go belly-up this year--Disney Mobile and XE Mobile also bit the dust, and Helio is hemorrhaging cash at an alarming rate--but given its focus on data services, the operator's demise was the most alarming flameout of all. In its brief existence Amp'd nurtured strong consumer demand for mobile entertainment: In the first quarter of 2007, its subscribers downloaded twice as many videos, songs and games as in the fourth quarter of 2006. The problem is that by May, roughly half of its 175,000 subscribers were no longer paying their bills. While operational snafus are to blame for Amp'd Mobile's demise, the larger question remains: Can a mobile operator successfully differentiate its service solely on content?
The Writers Guild of America hits the picket lines. In early November, Hollywood writers went on strike after months of negotiations with the Alliance of Motion Picture and Television Producers failed to yield a new contract. Chief among the scribes demands: A fair share of income derived from webisodes, mobisodes and other scripted new-media formats. Producers don't know just how lucrative these new platforms will be, so they're refusing to budge. The strike is now almost two months old, with no end in sight--conventional wisdom suggests network programmers will respond by devoting even more airtime to reality TV and other non-scripted programming, formats that rarely draw audiences in repeat viewings…which does not bode at all well for mobile TV, a fledgling medium already unhealthily dependent on repurposed network and basic cable content. The fallout promises to determine the commercial viability of the mobile TV platform as well as the content that comprises it. A story that gets bigger every day, simply because no one has any clue when and how it will end.
Radiohead goes digital. By refusing to renew its contract with longtime label EMI and releasing its newest LP In Rainbows direct to consumers as a download available exclusively on its official website, critical darling Radiohead struck a potentially fatal blow against the record industry as we've long known it, proving both traditional hard-copy formats and online retail middlemen superfluous in the digital age. Most intriguing, Radiohead let fans pay exactly what they wanted for the album. The economics were debated endlessly, with online survey firm ComScore estimating the average price per download at $2.26. But in a recent New York Times profile, reporter Jon Pareles writes "Under a typical recording contract, a band receives royalties of about 15 percent of an album's wholesale price after expenses are recovered. Without middlemen, and with zero material costs for a download, $2.26 per album would work out to Radiohead's advantage--not to mention the worldwide publicity."
That was the year that was. Please note FierceMobileContent will not publish next week, and will return
Wednesday, January 2. See you in 2008.