It seems there’s barely a new service mentioned, or a justification for IMS expenditure made, without some recourse to a supporting business model that relies on advertising.
If consumers are to be persuaded to watch TV, instant message, blog and social network using their mobiles, then it seems the operators and their service provider partners are going to have to use subsidised or free services as part of that persuasion.
So two things have happened this month that seem to confuse that picture a bit. The first is that not just one, but two, mobile operators told us that 3G is fine for streaming live TV to lots of users. Now clearly getting TV to users over 3G is very much a subscription, even pay-per-view, model although one assumes one wouldn’t want to go too far down that road without some flat rate data tarrif in hand. So if the networks can handle it and consumers can afford it, where is the business case to build expensive mobile broadcast networks, refresh the user base with a whole range of compatible devices, and find the business partners for ad-funded content to the end-user?
Secondly, MVNO Blyk has announced it will be working with Orange as its partner, and several large brands at launch, to provide a cheap and cheerful voice and text service to a teen market that may well appreciate free calls and texts in exchange for exposure to a few ad campaigns.
It seems slightly ironic, though, that with all the new services and applications ear-marked as being well suited to the ad-funded model, one of the first actual dedicated ad-funded MVNOs is going to use all that ad money for cheap voice. It’s somewhat reminiscent of early 3G. Never mind that, as one commentator pointed out, the youth don’t often have a lot of disposable income to spend (after all, why have they signed up to a free mobile service in the first place), this is where some of the early ad money seems to be headed.
So there are two instances where the new orthodoxy of how “brand” new money will go around the industry seems to be undermined. Yes, there are sponsored games downloads available in certain areas, and that is more like the kind of service envisaged when mobile advertising was thought about. But banner and spot ads and inserts and all the rest of the inventory mobile operators have been putting together are yet to take off as is, we are told, the mobile-focussed creative side of the ad industry. There’s money and new business models there, but who knows exactly the how and the how much?