Mobile operators face peer-to-peer pressure

User-generated content looms as a source of serious discontent for mobile operators according to a new study released this week by market research firm Pioneer Consulting. Noting that a significant percentage of multimedia content on mobile handsets is either user-generated or just stored on the device, Pioneer reports that a growing number of subscribers are now exploiting alternative technologies like Bluetooth, WiFi and WiMAX to effectively bypass operator networks when sharing their content with friends, family and social networking contacts. The study suggests subscribers who circumvent the traditional content value chain could rob operators of as much as $16.4 billion in potential annual revenues by 2012, more than a quarter of the projected total revenue for the year in question.

When it comes to altering the future, there's no time like the present, but operators--a segment notoriously averse to change--may not like the sounds of Pioneer's solution. The report argues that operators must reevaluate the relevance of the traditional client-server content delivery architecture in an environment where a growing chunk of media originates from the device. Moreover, they must come to terms with the inevitable bandwidth bottleneck between the base station and handset brought on by an oversubscribed air interface. Most important, and most problematic, the study says carriers must embrace peer-to-peer sharing within their networks.

To operators and their content partners, P2P is virtually synonymous with memories of Napster, rampant piracy and Lars Ulrich whining about the horrible injustice of it all. But the mobile experience isn't about swapping Metallica demos and Dr. Dre remixes--it's about sharing personal content with the people closest to you. The simple distinction is that PCs are for content consumption and mobiles are for content creation, but it's too simple a distinction, and ignores the wealth of premium, copyrighted media available for mobile download. As a solution for mitigating user-generated content revenue loss and improving mobile network efficiency, P2P is undoubtedly intriguing. But it's an answer that poses even more questions than it solves. -Jason [1]

P.S. Earlier this week, Alltel director of data products Kristi Crum, Zumobi co-founder and vice president of product design John SanGiovanni, and JupiterResearch vice president and research director Julie Ask joined me for the Fierce Live! webinar "Perfecting the Mobile User Experience." If you missed it the first time, or just want to hear it again, check out the archived webcast here [2].

P.P.S. Thanks to everyone who's taken the time to fill out our reader survey and offer their input on FierceMobileContent. If you missed the e-mail sent out a few days back, or just haven't had the opportunity to submit your responses, please click here [3].