What is it?
Java, or J2ME is a format for applications for mobile and PDAs. It provides software that can been added to mobile phones. It has been most widely used for mobile games, but many other applications such as maps, instant messengers, ip-based messaging, gps systems or phone book back-up systems have been developed.
As J2ME is widely available on mobile handsets, it offers the broadest compatibility in a highly fragmented market.
As advertising funded content increases, there will be greater demand to include this into Java applications. At the moment, most of these applications are games, however, recent studies have shown that this tends to focus on the 14-24 age range. In the older age demographic, PDA functions, such as diaries, maps or email are of the greatest interest. However, outside of the games market, there is a reluctance by many users outside of the early adopters to install applications on their mobile phones.

How does it work?
The Jave Platform, Micro Edition (J2ME) was developed by Sun Microsystems as a language and environment to run applications on mobile phones and PDAs. It’s programming language is Java, which is widely understood amongst programmers and developers. Although it is more complex to develop than simple Flash-based applications, it’s broad compatibility on mobile handsets makes it an attractive development proposition. As well as the phone-based functions J2ME can also be used to connect through the internet, bluetooth or infrared.
On the downside, as with other mobile content, the many different handsets on the market results in the need to develop many versions of each application. Whilst video and audio may be transcoded for handset optimisation, J2ME applications will usually need to be developed specifically for different ranges of phones.

A few examples
There are many examples where J2ME has been used, from games to PDA style applications. Google, which is heavily involved with mobile apps provides its gmail and maps service through Java applications.
In France, Orange released a series of ad –funded games in 2007, sponsored by brands such as Coca-Cola and Saab.
Elsewhere, brands such as Nokia, McDonald’s, Diadora, Samsung, Adidas and Walt Disney have all sponsored J2ME applications.

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What is it?
Mobile content is defined as interaction on mobile outside of peer to peer activities, mainly voice and SMS. Content includes pictures, audio, video and applications all of which require storage or installation on the mobile handset.
The growth in mobile content has developed from the ring tone and picture background markets of the early millennium, through to a more complex range of content including video, games and applications.
A combination of better handsets, improved data speeds and data pricing means that the level of content downloads are predicted to increase significantly.
With a many recent scandals connected to Premium Rate Messaging, there is a significant public distrust with this billing method for content. This presents and opportunity to brands who are able to fund content and delivery it to the mobile user for free.
Conversely, whilst direct marketing to mobile through is increasing, many users and some brands see this as intrusive. Ad-funded content offers brands a different relationship with the mobile user by giving the benefit of free entertainment or information.
A report by the Mobile Entertainment Forum (MEF) believed that ad-funded mobile entertainment in games and video to generate revenue of £145m in the UK by 2012

How does it work?
As brands are looking for new ways to promote to their markets, mobile content advertising offers them a new channel with which to do this. Within video or gaming content, this is typically through a pre-roll or splash screen advertising. However there is a move towards brands to move beyond a simple sponsorship model by developing their own content. This is done by working with mobile content developers and creatives.
The distribution mechanism is usually via MMS or SMS and WAP push, where a text message is sent with a download link. This is usually triggered by a request to a shortcode (five or six digit number) from the mobile user.
The means of promotion of this content are varied, but are usually through tie-in’s to media campaigns such as television, press or billboard advertising. On the mobile side, the operator portals are currently regarded as the main point for distribution, however as more direct to consumer channels develop they will offer viable means of distributing advertising-led content. With this development there are an increasing number of ad-funded content providers connecting brands to both content and consumers.
From an advertisers point of view the ability of mobile targeted, location and time-sensitive content could make it an attractive proposition.
So far, content funded advertising has been slow to take off and meet the predicted levels, however a number of recent campaigns have shown the possibilities.
One mobile advertising portal surveyed it’s user base of 16-25 year olds which showed that nearly 50% would accept ads in return for content.

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A few examples
Orange have trialled ad funded content with brands such as Coke and Saab advertising in downloadable games (see J2ME applications).
MySpace in the US have been testing similar advertising funded content.
The 2007 Big Brother switched its mobile video from premium rate payment to advertising funded reported a four-fold increase in the downloads.
The mobile network, 3, launched an ad funded video service in summer 2007 gaining over 1 million subscribers in the first 6 months.

Mobile age verification provides controls to prevent minors from receiving ‘over 18’ content on their phone.

Mobile age verification was established on a self-regulatory basis across all UK mobile networks in 2004. The principle of these controls are that mobile users must prove that they are over 18 before they can receive content restricted by the MNOs. For the purposes of this agreement, the definition of over 18 is not specific, but rather defined as ‘consistent with standards used by other media’. The agreement does, however, specify chat rooms as content restricted to 18 years plus.

Shortcodes

The primary focus for age verification has been on the shortcodes, where by 69xxx and 89xxx numbers are restricted to age verified phones. For shortcodes, phones are locked by default and age verification MUST be made before content can be provided.

The process of verification varies between each network, but Orange offer a typical method:

The Orange subscriber sends a text to an adult short code this will go through the automatic Age Verification process. If successful the text will be passed on to the user. If the end user is not age verified then they are advised. They can then send a free SMS to receive message explaining they need to call customer services: Pre-Pay users dial 450, Contract users dial 150.

Proof of age is made using a credit card, where a small sum is deducted and then refunded by the network. This process can usually be done through a phone call, WAP or online.

Mobile Internet

The age verification process for the mobile internet differs from operator to operator, where some restrict sites by default, but others have an optional ‘parental lock’:

All MNOs have content filtering for WAP and mobile internet - the system varies depending on the operator:
-
- Vodafone - all content filtered with extensive controls in place by default
- T-Mobile and Virgin - all content filtered
- O2 - content filtering optional as part of parental controls
- 3 - Walled garden - adult content only available as paid content through their portal

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The only publicly issued Code of Practice has been from Orange – see their related document ‘UK Code of Practice’.

Mark Brill, March 2008

Mobile Internet

What is it?
There are three key factors that have seen the mobile internet become a reality:
1. better handsets, screens and memory
2. better data connections through 3g
3. flat rate data-pricing.

Most mobile users in the UK now have both internet browsing and email capabilities on their phones. In fact surveys have shown that 46% of people in the UK have accessed the mobile internet. With such a large number of users there is significant potential for marketing and advertising.
With the advent of internet focussed phones, such as Apple’s iphone, some have argued that the mobile and PC internets are the same, and thus specific strategies or content for each audience is unnecessary.
The other side of this argument is that the mobile internet is significantly different for a number of reasons:
1. handset screen and keyboard size make the functionality and experience different
2. the user experience with mobile means that they will tend to access in the internet in short bursts or ‘snacking’
3. the MNO portals and repurposing of content means that the mobile user will see a different internet to the PC user (see below).

How does it work?
When most users log in to the mobile internet they will be taken to their operator portal, Vodafone Live! or T-Zones. Although many of these portals or ‘walled gardens’ include search tools, they make it difficult for the user to navigate outside of them.
To log on to the mobile internet outside of these walled gardens requires a good technical knowledge of the phone and internet settings.
Significantly, the MNOs repurpose content, ostensibly to improve the speed and compatibility with the mobile device. This can mean that the look and functions of a website are quite different to the PC-based internet. It also means that some sites, depending on the network are blocked entirely.

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A few examples
Google have already made significant inroads to providing mobile search and mobile applications, such as email and maps. As yet, the company has not included it’s adwords advertising into these applications but is widely expected to do so at some point.
In the UK, Admob is the largest third party mobile internet advertiser offering a mobile specific pay per clicks service similar to other internet PPC providers.

Mobile Content Value Chain

The difficulty with any new technology or economy are the proliferation of terms and acronyms. The article describes the process of delivering mobile content, charging for it and the common terms used in this process.

It is aimed at anyone creating content, music, video, pictures or games and wants it to be seen, or even bought by a mobile audience. There are three main methods of delivery mobile content – directly over IP (Internet Protocol), through a distributor or via a mobile content delivery platform. Each has it’s own advantages and disadvantages …

Content Directly over IP
There is nothing to stop anyone delivering to content to a mobile phone user by simply using the internet. Create the content, upload it onto a web server, create a WAP site and tell your mobile users the URL.
The advantage is that it is cheap, simple and quick to achieve.
The disadvantage is that it does not protect the content, there is no revenue and most significantly, mobile users rarely type URLs directly into their mobile browser. It also doesn’t take into account the compatibility issues of the many handsets and mobile operating systems.

Mobile Formats
Unlike PCs and the internet, there are many more handsets, operating systems and screen sizes available. When delivering content these need to be taken into account. For pictures, the format is a simple jpg or gif. Most handsets will manage resizing these days, so the format is not a primary issue.
When it comes to audio and video the situation is more complex. Typically video is downloaded in the 3gp format. 3GP stores video streams such as MPEG-4, H.263 or H.264, and audio streams as AMR-NB or AAC-LC formats. 3GP also describes image sizes and bandwidth, so content is correctly sized for mobile display screens.
Music can be delivered as AAC-LC in a 3gp wrapper, however most mobile handsets can manage mp3 and is a more broadly compatible format to use.

Mobile Distributors
The second option for delivering content is via a distributor such as Player X. Unlike a direct IP delivery, the distributor will take care of all the formats, as well as finding portals to sell the content through. Typically these portals are sites run by the operators – such as Vodafone Live! Or T-Zones – offering free and paid content to their users. Whilst a portal may see millions of hits – users typically log on to the mobile web via these portals – there is no assurance of position on the portal. Operators tend to prioritise global events – such as film premiers or corporate tie ins. Other content can be buried a few pages down and may never receive any hits. There is no revenue paid in advance, and apart from the large games manufacturers there are no guarantees of download volumes.
The revenue generated from this is usually split 50:50 with the distributor, so for a £1 download the content owner will see around 20p revenue.

Content Distribution and Management Platform
Increasingly, content providers are seeing the possibilities of Direct to Consumer mobile content (D2C). With the poor reputation and user experience of the operator portals the growth of D2C is inevitable.
The revenue model for D2C is typically using Premium SMS or Reverse charge SMS. The way this works is that the user sends a text as a request from their mobile to a 5 or 6 digit shortcode number and they receive a reply, or billing message, which will deduct a fixed amount from their phone.

3GP – The standard format for mobile video. 3GP stores video streams such as MPEG-4, H.263 or H.264, and audio streams as AMR-NB or AAC-LC formats. 3GP also describes image sizes and bandwidth, so content is correctly sized for mobile display screens.
Aggregator – in the context of SMS and PSMS, an aggregator, such as Mblox, works with the mobile networks to agree shortcodes and bulk SMS routes which are provided to mobile platforms and content providers as single IP connection through their SMS Centre.
Billing Message – see PSMS
Bulk SMS – a common term for text messages bought from aggregators/SMS Centres. These messages are bought in blocks of 1000s or many 1000s at a lower cost than those bought from networks. Bulk SMS is typically used for mobile marketing campaigns and other web-based messaging applications.
Content Platform – or sometimes referred to as a delivery platform, such as immedia24. This is software or a web-based application for managing SMS and content delivery such as handling requests from messages sent from handsets. A platform will also provide reports of messages sent and receiving and revenues earned from PSMS.
D2C – Direct to Consumer
Flat Rate Data - – see Mobile Data Charges
ICSTIS – The premium rate billing regulator, who are now renamed PhonepayPlus. All providers of PSMS must be registered with them as a service provider. They have the power to raise fines for breaches of their regulations, but only against the service provider and not the content provider – hence the service provider for the Richard and Judy Scandal, Eckoh received the fine, not Channel 4 themselves.
IP – Internet Protocol – any data that is sent or received using the internet.
J2ME – Java-based development language used for many mobile applications, especially games
MMS – Multi Media Message Service – with the advent of colour screens and phone cameras, it was developed by mobile networks as a replacement for SMS. MMS allows the user to send and receive pictures, audio and short video content (around 250k files). The cost of MMS combined with limited user need has seen a relatively small take up, with 100 million messages per month being sent in the UK (around 2% of the SMS volumes).
Mobile Data Charges – refers to mobile operator charges for accessing the internet and email. In effect, to download anything from the internet the user is charged for data. This can be as high as £7 per megabyte and is additional to a PSMS charged by the content provider. Many users are not aware of the data charges until they appear on their phone bill. Recent flat rate data charges – around £7.50 per month for 1 – 2 gig of downloads has alleviated this, but mobile users not on a flat rate plan are likely to be put off downloading content due to the high charges.
Mobile Operating Systems – There are a number of mobile operating systems used by handset manufacturers – Symbian, Windows Mobile, Ajax, Linux. There are other systems specific to certain phones such as the Blackberry and the iphone. The battle for the dominant mobile OS is likely to develop in the next 12 months and the main players will probably be Symbian, Windows Mobile and Google’s Android.
Mobile Operators – are the companies that own and operate the mobile infrastructure – in the UK they are Vodafone, T-Mobile, O2, Orange and 3. Operators such as Virgin Mobile lease capacity from the main operators.
Mobile Portal – an entry point into the mobile web. The mobile operators run their own portals, and is typically the first point of call for a mobile user logging on to the internet.
MSISDN – the number of a mobile phone. The MSISDN is carried in all SMS and MMS and offers an ideal way to identify a specific user. It cannot be identified when the mobile user is browsing the internet.
Ofcom – The telecoms and media regulator. Any premium rate issues will be dealt with by PhonepayPlus (ICSTIS), but Ofcom will deal with non-premium issues such as SMS spam. Their site has excellent guidance on acceptable usage.
PSMS – Premium SMS – is a message that is charged to the users phone. The charge is on receipt of a message, sometimes referred to as a reverse billing SMS. In order to comply with the regulations, the user must send a request message to a shortcode (a 5 or 6 digit number).
The price of the PSMS is determined by the shortcode number used for the message. These shortcodes are priced at 10p, 25p, 50p, 75p, £1, £1.50, £3 and £5. Billings can also be multiples of the price eg 2 x £1, where the user will receive 2 messages at £1.
Shortcode – a five or six number code for both receiving SMS from and sending Premium SMS to mobile users. Each shortcode is owned by a service provider who aggregates the number across all of the major networks. Shortcodes are country specific and cannot be sent/received outside the country of origin.
SMS – Short Message Service – an SMS is 160 characters of text and 12 characters of header (such as a reply number). Unlike email, for example, an SMS cannot carry additional header information or picture or video content. There are over 4 billion text messages sent each month in the UK – more messages than voice calls made.
SMSC – SMS Centre or gateway. An SMS centre provides a connection between the mobile networks and the internet. They will typically act as an aggregator by offering a single IP-based connection across all networks. They will also set up and get the agreements for shortcodes across the mobile operators.
Subscription/Recurring Billing – is a revenue option that allows the content provider to accept a single SMS request from a mobile user and continue to send messages monthly, weekly or even daily until an opt out or ‘STOP’ message is received. This was commonly used in the ringtone market boom as a method of maximising revenue. However stricter controls have been put in place, particularly with regard to subscription billing from under 16s.

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URL Sending – a common method for delivering content by SMS. The text message will contain a URL link, which, when opened will download the content.
WAP – Wireless Application Protocol – the protocol has been widely available since 2000 and was designed to offer a simplified version of web browsing from mobile phones.
Wap Push – or Wap Push Message is a method of delivering mobile content by SMS. The Wap Push is essentially a text message with a URL to the content and configured as a Service Message. It will prompt the handset user to open the URL or download the content. Due to abuse by unscrupulous companies Wap Push can no longer be used in Premium SMS.
Wireless – it used to be the word my grandparents used for their radio! These days it general refers to wireless computer networks, or WiFi. Confusingly ‘wireless’ tends to be the term used in the states for mobile networks.
WML – Wireless Mark Up Language – similar to HTML, WML was designed to be specifically used on mobile. As mobile handsets have developed WML has become less important for delivering web-type content, with XML, compact HTML and HTML also running on many mobile browsers.

The predictions are that mobile content - pictures, audio, video and games - will be a massive market within the next few years. What are the opportunities and threats for developers of that content? Mark Brill from Ping Corporation Ltd looks at the issues for mobile content, and what the future may hold.

The Opportunities

All of the research shows that mobile content is going to be massive in the next five years. Screen digest estimated the value of this content to be £5.46bn a year by 2011. A 2006 Gartner Survey estimated that mobile content would be worth a less conservative $78 billion within the next 5 years.

We have already seen a ‘first wave’ of mobile content, largely dominated by ringtones and backgrounds. However the predicted ’second wave’ of mobile content is almost upon us and it is expected to generate greater revenues, with a longer lifespan than the first wave.

What will bring about this second wave?

The growth in mobile content will be driven by improvements in technology such as higher resolution screens, better software and improved data connections, such as 3G.

Handset technology is converging with internet technologies through the introduction of devices such as the I-phone and the impending Google Phone. The line between phone, music or video player and PDA is becoming seamless.

At the same time the mobile phone operators are reviewing their pricing policies for data. Until recently, the cost of downloading was a few pounds per megabyte. This was a major barrier to downloading content. Most of the operators in the UK are now offering a flat rate for data, following a similar model to home broadband.

Premium SMS offers a simple revenue model allowing micro payments to be taken quickly. Identifying a phone number through SMS also allows for easy user and age verification with content restriction to unregistered phones.

The growth of 3rd party developers will continue. Many industry observers regard D2C (direct to consumer) as the most likely area to succeed with the most engaging content and the best user experience.

With over 3 billion phones worldwide, mobile technology is in wider use than PC-based internet access or television. As such it has the potential to become an enormously powerful tool for selling and distributing content. A goldmine for mobile content providers.

Selling onto mobile

Typically the route to market is as follows:

• Content is created - pictures, video or audio
• The content provider sells through a distributor - such as Player-X or direct to the consumer via a platform such as immedia24.

Distributors will generally work with operator portals, such as Vodafone Live or T-Mobile’s T-Zones. This is always operated on a revenue share - the content is not bought outright, but the revenue from Premium SMS is shared between the portal, distributor and content developer.

A D2C platform, such as immedia24 offers considerably more control over the content and a larger revenue share. Potentially it has a higher audience than the operator portal simply because many operators insist on exclusivity for content. The disadvantage is that there is no existing mobile customer base. D2C works well where there is already an audience through the web or other media, or where there is an advertising budget to see the content.

The Threats

In spite of some great opportunities, there are still many problems with creating and delivering mobile content.

Mobile Internet is accessed by only 23% of mobile users in the UK. Although at over 15m people that is still a considerable market, it is not as ubiquitous as SMS.

Whilst there are many people who can create great mobile content, the route to delivery is problematic. The mobile operators have generally regarded themselves as the key providers of mobile content, assuming that most people will want to download through their portals. However, it has been shown that the mobile users do not regard their operator as a trustworthy content provider. Operator Interference The operators have tried to restrict 3rd party content in many ways. Unlike an internet service provider, the mobile operators’ online connections are made via their portals. Not only do they restrict which sites can be accessed, but they often alter the content itself. Ostensibly this has been under the guise of formatting the content for mobile, however there are examples of operators altering the display of 3rd party sites to remove much of the functionality and ruin the user experience.

Poor User Experience

The problems with poor user experience also relates to both the handsets themselves and the route to delivery. Whilst screen resolution, memory and functionality have improved on many handsets, usability can still be poor. The I-phone for example has been plagued with problems - everything from the battery life to high data charges. In the UK the I-phone will be locked to the O2 network. So if you want to change networks you will simply be left with a £400 brick!

At the point of download user experience has been equally poor. For example 3g in the UK is not as fast as broadband and is not always available. Poor pricing policies have compounded these problems. High profile Premium Rate rip-offs combined with confusing charges has resulted in many mobile users steering well clear of anything that may involve a premium rate SMS for downloading. Although flat rate data pricing is common place in the UK, the charges for accessing data abroad are still over £7 per megabyte.

Compatibility

A variety of operating systems, screen sizes and screen ratios make delivery of pictures, video and audio somewhat problematic. This is largely a technical issue for developers rather than the content creator. However the fact that there are few standards in mobile operating systems means that in the end the user will suffer. One poor experience with mobile content can put a user off for a very long time.

Low Premium Rate SMS Payouts

Whilst Premium SMS (PSMS) offers some great opportunities for both micro billing and non-credit card billing systems, the payouts offered by the networks are very low. For a £1.50 PSMS that the user pays (£1.26 after VAT), the operator and aggregator will take over 30p. This figure can be much higher on some networks. This leaves little over 90p for the content provider, creator or developer.

It means that the content provider can be forced into a position of charging considerably more for mobile content than when it is delivered though credit card billing on a web-site.

The Possibilities

With all these draw backs you may be thinking that there is little point in pursuing the Mobile Goldmine. However the potential of the mobile content market clearly exists. The issue, as with any new information technology, is to ensure that the needs of the user are understood and clearly met.

The convergence argument suggests that as we adopt more I-phone style handsets the line between mobile and web will disappear. Simply put, there is no need for developers to worry about mobile content specifically as we will all have the web on our phones.

Looking at the threats outlined above, it is clear that a division will remain between the internet and mobile. Inevitably small screen sizes and keypads will always create a different experience for the user. If I look at my own usage of mobile internet, I will acknowledge an email, but not write a lengthy reply. Whilst I may search for a film showing time or check an address on my web connected phone, I would not use it to book a flight or make a bank transfer. That is, as much as anything else a practical consideration of what it is possible to do with a small keyboard or screen.

Understanding the Technology

The key to accessing the Mobile Goldmine is to understand the relationship between a user and the technology. For example, we relate to our TV quite differently to our PC and the web, even though these days the technologies are similar.

What is the relationship between a user and their phone?

• Primarily it is for SMS (over 4 billion are sent each month in the UK) and phone calls
• It is a means of storing phone numbers - over 60% of people use their mobile as their main, often their only address book
• It is a means of killing time - playing games or sending messages while waiting for a bus, train or friend
• The phone is linked to personal identity

This last point is significant. For many people, the phone that they own, the ringtone or the background are all statements about how they see themselves. It is a highly personal item that is with them almost of the time. We have seen this in our studies with teenage mobile users, where their phone is now more significant to their peers than the clothes or the trainers they wear. Two years ago the Motorola Razor was the best selling phone, even though it performed the worst in usability tests. It was sleek, flat and came in bright pink. These factors were more important than the practical considerations.

Thus the key to successful mobile content is to develop specific content that meets the needs of the user. The first key to success is good usability. It is estimated that for each additional click required to access content, the provider will loose 30% of it’s potential audience.

It should then engage the user in a way that supports their identity. In some areas, such as music or sport it is quite straight forward to engage at this level. In sectors such as the film or television, it may prove to be harder requiring more creative skills and ideas. It is also important to view mobile content not as an end in itself, but as a tool to enhance the user’s experience across many platforms, such as the web, television or cinema. There are numerous examples where the web has successfully been used to enhance and support more traditional media and mobile may be used in the same way.

Ultimately the best approach to developing mobile content is not to be driven by the capabilities of the technology, but rather to understand the user’s relationship with their phone and produce clever and engaging content.

For more info please visit us at http://www.immedia24.com