Sunday, March 16, 2008

Will D2C drive mass market content consumption?

Interesting discussion this week over Sue Marek's (from Fierce Wireless) post re D2C (gloomy?) likelihood to drive mobile content revenues:

"(re Motricity)...In its place is a more realistic view of the mobile content marketplace and an acknowledgment that you can't be all things to all people. With that in mind, the company is getting out of the direct-to-consumer business...I think it's time for mobile content firms to take a realistic look at the market and understand what's working and what isn't. It's time to stop investing in things that aren't working (direct to consumer) and focus on the basics."

Is it?

I agree that there are a pile of challenges standing in front of mobile content as a whole, add some that mount on as one goes D2C, and yet, I argue that if any channel is going to become mainstream for mobile content, it is going to be D2C.

It is going to be D2C because of two main reasons:
  • Technology challenges are going away, opening the playground for big players: sure, there's UI issues, HW (where's my headset?) issue, battery, bandwidth, usability etc etc. but the bottom line is that iPhone UI-likes are here and coming, networks bandwidth is getting better, the recognition that the everyone should be allowed to publish, promote and bill (where appropriate) for their content is there. That means that web-traditional concepts like CPM, CTR and such, analytics etc., are all enabling traditional web (big) players to view mobile as a natural additional channel to have direct relationships with their audience. Mobile is attractive for brands, fan clubs etc.
  • The D2C commercial model makes sense (or otherwise, the current one doesn't)
    • Big players can join the game: Brands, artists, fan clubs: To them, mobile now can become just another channel of promoting their brand, product or service. They spend marketing $ cross carrier anyway, right?. they now have the ability to offer content or services to 100% of the addressable audience (vs. from one operator's deck, addressing 20% at best). They fully independently control the experience, do CRM, support, bill etc. It's a no brainer to strap a mobile channel to existing other channels.
    • Operators: Operators aren't content retailers: they are content enablers. For operators (IMO), the model where they have to fund development for a tailored solution, then they have to spend the marketing, that does not work. The model that would work is referring selected retailers per content type from their deck, and taking a rev share on that content sold on their network. The additional upside is that bigger players will want to become in that on-deck list of recommended D2C retailers, who will spend cross-network marketing $$ anyway.
Last, I want to introduce another comment here. the traditional on deck model is limited also in the type of content and services that operators will license, introduce, market and support. D2C is the way to enable UGC or independant content, they type of content that will bring surprising consumption behaviors.

Interested in comments...I think D2C is new and not easy, but we'll get there, it will take some vision.

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