“The single biggest benefit that was discovered in Japan was that youneed to be fair in sharing the revenues with the content developer. It isnot fair to say to a Disney or a CNN, ‘Give me half your money, and then Iwill put you on my network.’ DoCoMo approached this with the rough idea thatthey would like to keep 10 percent and give the content developer 90percent,” says Tomi Ahonen, a long-time industry watcher, prolificmobinet author, and ex-Nokia consultant. He points to Japan’s stark contrastwith Europe, where operators took a 50/50 or 60/40 approach. “Underthese terms, [European operators are] very unlikely to attract a largecommunity of developers.” He also has a pretty good ideas as to what Europe and the US must do in 2004 to establish successful 3G services. Log on to hear these comments and much more in this lively interview. Full Program Run-time 22:02.
As industry watchers, your humble WWJ scribes never cease to be surprised athow mobile markets outside Japan miss the boat when it comes to extractingsuccess factors from NTT DoCoMo’s i-mode, KDDI’s EZweb, and Vodafone Live.Today’s program guest, Tomi Ahonen, makes the point clearly and concisely:the No. 1 lesson to be learned from Japan is give the content provider afair shake.
Doing so will offer a significant incentive to content owners and developersto join the platform – and assume the development risk in exchange for thelion’s share of the content fee. Meanwhile, the carrier sets up a decentbilling system, promotes the hell out of the service, gathers the coolesthandsets available, and rakes in the profits when data traffic goesballistic. It really does work and it really is that straightforward(obviously, there are a lot of additional details, but we’re speakingconceptually here).
We’ve been doing a lot of thinking lately as to why network operatorsoutside Japan have failed to copy this success formula – they are by nomeans dim and in fact have spent considerable time and budget since ’99visiting Tokyo, poking and prodding Japan mobinet players for answers; theyknow why it works here. So why haven’t they replicated the same outsideJapan?
Well, at least to some extent, they have. France’s Bouygues Telecom reportedthis month they had over 500,000 i-mode users (who’ve exchanged more than 15million emails); Bouygues has some interesting new handsets (NEC N341i andMitsubishi M341i), Java, and location-based services. The company has beenquoted saying that content partners have earned over 10 million Euro infees; 86% of French i-mode email users are “very satisfied” with the service(and 77% are at least “satisfied” with the terminals). Hmmmm… Looks justlike i-mode in Japan!
But the other baby i-modes, as well as mobinet services at other carriers,have yet to achieve the same level of success as in Japan, and Ahonen’scomments today may just be a good starting point for strategists andplanners at those operators. Hand over most of the content fees to thecontent developers, and they will move heaven and earth to create content,applications, and services that work well on the tiny screen and that mobileusers will want to use. This will spark a virtuous circle as the coolcontent attracts more subscribers – who in turn make entering the contentbusiness more lucrative for content owners.
Sadly, many carriers outside Japan are still addicted to excessive SMSrevenues, the “premium” content model, and claiming narrow-mindedownership of the customer relationship — as well as too much of the contentrevenue.
– The Editors.