23rd November 2006 - There's a danger that the MMS market will go nowhere, and mobile content companies should not just focus on 3G to fulfil and stimulate demand. Stephen Kendall-Lane, Chairman of Kendall Wood International, thinks that the real opportunities for MMS and video on your mobile lie within the existing 2.5G mobile phone market, because there are currently around 1.5 billion mobiles in use at the present time. At least 80% of these are GSM users - most of whom, he says, will eventually have to upgrade to GPRS. Inset shows one of the latest 2.5G phones from NEC - the world's thinnest 2.5G fold-type camera-phone ( N412i ). Its third generation cousin - 3G - doesn’t quite yet hit such a scale, and so an opportunity could be lost if mobile content companies and networks don’t exploit such a large potential market. It emerges that there is much scepticism about MMS and particularly about the application of video on 2.5G phones. However, Kendall-Lane’s technology proves that you can have quite high quality video clips on even a bog standard GPRS phone. It may not be a broadband experience, but it works well. If your phone runs on the Symbian platform - 60% of GPRS mobiles do - Kendall-Lane can send you video via MMS. Otherwise it is still possible to send you – the end-user - information about the video clip you are downloading, or even additional information, while it is in the process of doing so.

What you in fact get is an instant slideshow-like experience, helping to keep you sufficiently interested while the downloading process is completed. You then get a short video clip of, say, a movie you’d like to watch or even other footage.

Part of the key to making video work on MMS compatible mobile phones comes down to the compression ratios. Kendall-Lane says that the H264 compression standard is “infinitely more superior” and that better compression is vital if video on 2.5G is to become popular. If your phone runs on the Symbian platform, you will then be able to achieve an instant viewing experience on 2.5G. In fact, Kendall-Lane claims that it is possible to send up to 75 seconds of video to an end-user by MMS.

So the big question is: if video is possible on a 2.5G, why is everyone negating it for 3G? The market potential is so much bigger with 2.5G phones, and there are high growth markets like India and China ready for it and in the waiting. Hang on though, there’s potential in Europe too! Some independent research, according to Kendall-Lane, shows that the EU market has around 60 million Smartphone end-users, and a third of those are likely to access video content at a rate of around 60 clips per year.

Most of the research focused on the 3G market, but it demonstrates the potential for the 2.5G market. It also shows where things aren’t quite working. For a number of reasons 40% of those interviewed had not accessed video. Of those who did access video on their 3G phones, around 11% never access video again because of a poor video experience.

All of this needs to change; MMS is said to be the most important mobile application, but Kendall-Lane also claims that we’re only just at the beginning of the mobile revolution. This is why the technical hassles of downloading content to a phone have to be taken out of the process. End-users want an instant, trouble-free experience. This includes informing customers about the price, size and expected duration of a download, enabling the end-user to make an informed choice. When this is not done, customers are lost. If the download time is lengthy, then it is important to give them something to watch in the interim.

If the future lies in being able to deliver to the mass market, not the top 10% or 20% but to 80% of end-users, then it is vital for the industry to overcome its core problems, particularly its cynicism about the video on 2.5G phones – and they need to develop a pricing framework which allows content providers to receive a viable share of the price charged to end-users. Only then will creative content emerge to attract the customer.

Rather than frightening off end-users by always charging them for the cost of downloads, the customer should be able to receive video via MMS without charge. If you give them a taster of the experience for free straight to the phone, then they should also have the opportunity to download more video content from a server and pay for it. The content could also be sponsored, reducing the price to the end-user.

The whole interaction between end-user and content provider should be permission-based. Too much damage to the industry has been caused by those sending out unsolicited messages for which customers have no choice but to pay for what they receive, even though it may be unwelcome. So permission-based marketing is vital, and it establishes a benchmark for ensuring that customers only pay for what they wish to access and receive.

Content providers and the mobile phone network operators therefore need to ask: what do customers really want? At the end of the day it is about Customer Relationship Management: using technology in the right way to deliver what the customer really, really wants. If a customer wants to receive video content to their mobile phone as a message, then the mobile networks should ensure that this happens, and they should not leave the customer to suffer the hassle of downloading content.

After all, I am told, that they don’t own their customers to quite the extent they’d like to. Even so it doesn’t just have to be about the delivery of video content via MMS. The important message though is that it should be easy to access, at the right price, with the right method of fulfillment and instantly. MMS is the perfect vehicle for such content as this, because it gets over the end-users fear of downloading.

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