The new generation of high-speed content delivery technologies marks a turning point for the mobile industry. It’s finally time to abandon the notion that you are just cell phone companies or wireless access providers, and come to grips with the fact that you are selling, or at least supporting, an entirely new set of digital lifestyles.
No matter how established a presence you already are in the wireless phone industry, this is the moment to make some tough choices about just what kind of media services company you want to be, who you aim to serve, and how you propose to do it. And you simply must do all three of these things at the same time and with the same strategy in mind.
Congruence
Congruence is the keyword. Companies who succeed in the convergent media marketplace will be the ones who learn align their technology with their business plans with their marketing, and who do it from the get-go. For once the interactive wireless space ramps up, it will be nearly impossible to re-establish your company significantly differently than you’ve already positioned it.
As I see it, you’ll have to choose between two main options, and then bet hard in whichever direction you choose. Like the internet did in the mid-nineties, the wireless space will likely bifurcate into two camps of users: people who see themselves as hackers and those who see themselves as consumers. Who will ultimately dominate the space?
Early Lessons
Hackers are generally early adopters, so it’s easy to mistake them for the entire population to come; less technologically sophisticated consumers are sure to follow. The early internet’s high barriers to entry, such as the line-command interface of FTP and USENET, kept its population limited to the kinds of people who wanted to program for themselves. Then, Steve Case came along with strategy dedicated to the person with little or no tech savvy. Conventional wisdom held that America Online was a silly idea, because “those kinds of people” aren’t cut out for the internet, anyway.
And this wisdom proved quite wrong - at least for a time. AOL’s subscription logs ballooned with new members anxious for easy access to the intimidating online universe. Of course, as even grandma became comfortable with the user-friendly World Wide Web, AOL lost ground, and is now fighting for its very survival.
Still, the Internet seems to be made up of both those who prefer a prepackaged system and set of services, like Windows and MSN, and those who prefer a more do-it-yourself experience, such as Linux or a Unix-based Mac and open standards. And these communities look like they’ll be around for a long time to come.
The Wireless Divide
The wireless space is about to reveal the same sort of cultural divide, but it may play out a bit differently - and much more rapidly - than it did for AOL and its competitors.
The wireless equivalent of the hacker - let’s call her the tinkerer - will think of her phone as if it were a tiny, programmable computer. She’ll want to be able to use her favorite email program, whether or not it was provided by her cell phone company. She’ll insist on open standards, and the ability to download software, ring tones, and content from the entire universe of data types that are compatible with her phone (and that better be most of them). She’ll even sacrifice a certain amount of safety and service in order to maintain this level of control, nonconformity, and personalization.
The wireless ‘do-it-for-me,’ on the other hand, wants you to predict what he needs, and get it all onto his phone without him ever asking for it. Sure, he’ll hit a button when he’s told to in order to download the latest upgrade to his suite of media services, but he wants the whole package at once. If it’s got to be configured, he’d rather do it on the Web, where he can see what’s going on. And only one time - when he’s still enthusiastic enough about his new phone to bother spending time and energy on it. Besides, he’ll expect to be able to access services that already have his personalized information on record, such as his brokerage house or Yahoo date book. He feels he’s already entered his information “out there” and that you should be able to find it for him - with his permission, of course.
Wireless companies are going to have to decide which of the two kinds of consumers they hope to go after, and then develop their technologies, business plans, and marketing accordingly.
I’ll cover that in part two, tomorrow.
Part II
It’s one thing to know your consumers - it’s a far greater challenge to develop your technology and balance sheet around them.
In part one, we looked at the importance of congruence in strategizing your marketing along with your infrastructure along with your financials. Then we considered how new forms of content experiences are bifurcating the mobile market into two main camps: the tinkerer and the do-it-for-me. Now it’s time to put these ideas together, and determine the best ways of providing for - and making a business from - these two usage profiles.
In both cases, we determine our intended user base, and then leverage the Power of Three: devise a business plan with sensible content deals, build the right software and infrastructure, then communicate your offerings effectively.
The Tinkerer Strategy
Those of you who go after the tinkerer will need to develop networks with open standards, and software with documented code. You’ll need to publish developers’ kits online, establish clubs for programmers, awards for great implementations, and magazines and books that share tips and tricks.
You will be required to develop business models that depend on fees per minutes used, rather than fees for content, since your users will be finding content of their choosing for free or from other vendors. And while the content revenue stream may be limited, your company won’t have to spend money developing content or even, in some cases, content platforms. Your users will become your free workforce of engineers. Your money will be better spent supporting consortiums and universities than on payrolls.
Finally, companies marketing to the tinkerer will have to develop promotional campaigns that convey the do-it-yourself lifestyle, non-conformity, and community values. These efforts would be more based in public relations or public service - actually doing things - than in advertising, or simply saying things.
The Do-It-For-Me Strategy
If your company decides to focus on do-it-for-me’s, you will need to develop packages - suites of services that appeal to particular market segments: the business package, the student suite, the kids’ control board, the family phone. While a company with a pre-existing lifestyle identity - like Virgin or Nike - may choose to hone in on one user demographic, the inevitable consolidation of the industry, as well as the necessary exclusivity and high cost of partner deals, will favor those who choose to provide total solutions for a broad but intelligently segmented range of consumer profiles.
The business models for do-it-for-me wireless providers will generate revenue from services and content more than minutes. Yet while you will be free to give away more minutes to users who subscribe to pre-configured content delivery services, you will also have to share more of this revenue with your content partners. One key to capitalizing on this equation will be to secure exclusive contracts with key content providers who have existing relationships with consumers, such as brokerage houses, sports networks, and game companies. Then, you become the only possible choice for do-it-for-me’s already committed to one or more of them.
Marketing to the do-it-for-me means touting both an end-to-end solution from a wireless company that will take care of everything for you in advance, and convincing the consumer that you really know who he is and what he wants. In the end, your carefully selected array of content providers is your best way of convincing each demographic that you have identified not only their needs, but also their styles of assessing their needs.
All or Nothing
If I were choosing a cell phone or service package for myself, I’d probably fall into the tinkerer camp. I’d rather run a company that catered to this market, too. But if I were picking a direction for my wireless company and I had to guarantee revenue in the short term, I’d probably choose to focus on the do-it-for-me category. Cell phones are not computers, and most of the computer hackers I know still limit their hacking to the computer; they use their cell phones out of the box in whatever manner they were configured, and speed-dial their friends to talk about whatever cool thing they just did on their Linux box.
As the wireless space becomes a genuine multimedia content delivery platform, however, this could change. There is a generation growing up with wireless devices whose comfort programming by thumb has yet to be measured.
Is there a way to appeal to both the tinkerer and the do-it-for-me? Probably - but not at the same time. It would mean creating two separate brands - truly separate brands with their own names, identities, technological infrastructures and business plans. Anything short of that would lose to competitors whose platforms, deal structures, and marketing strategies are better leveraged for one group or the other.
In short, any company that is serious about moving into the full-fledged wireless content delivery universe of tomorrow will have to decide which side of the age-old technology divide it wants to be on. Otherwise, it risks developing the wrong technologies, creating improperly rationalized balance sheets, and looking like a company that doesn’t understand the first thing about the digital lifestyles that both tinkerer and do-it-for-me imagine for themselves.
Choose or lose.