Mobile Entertainment

When its compatriot Nokia announced that it was finally biting the bullet and launching fully-fledged games and music stores, it also got started in Britain. No one was surprised for a moment.

We all accept the notion that, in a market where the United States does not dominate, Britain is arguably the most advanced mobile territory in the Western world. Yes, the Spanish and the Italians might argue this – and in Zed, Buongiorno and Dada they have three of the world’s D2C giants – but the UK can probably boast more content developers, publishers, service providers and aggregators per capita than anywhere outside of Japan and Korea.

It’s been this way since the origins of the mobile entertainment business at the end of the 1990s. There was a flurry of activity in the UK at that point, as a nascent industry put down its roots.

1999 saw the formation of Bango and mBlox, each of which would go on to play a crucial part in the development of a content market outside of operator control: Bango by building a self-sustaining ecosystem enabling small vendors to build sites and monetise them, mBlox by pioneering a reverse-billed premium SMS system that would become the dominant payment mechanism for mobile content.

These two – and others like MX Telecom and WIN – created the right market conditions for local D2C brands like iTouch, PartyMob and MonsterMob to flourish. Indeed, by 2005, off-portal constituted 70 per cent of all data traffic (according to Vodafone). Although the subscription-led D2C market eventually came unstuck, it certainly played its part in ‘normalising’ SMS billing and wireless content.

Jeremy Flynn, formerly with Vodafone but now head of D2See, says: “Without a commercial model, nothing can work. The UK solved the monetisation very early, with premium SMS in 2002.” The innovation continues to this day. Witness PayForIt, the cross-operator WAP billing platform that launch last September.

While these channels were being built, many UK companies were developing products to fill them. Britain has always had a strong creative tradition – and this came to the fore again at the genesis of mobile content. When Digital Bridges launched in 1998 in Dundee, Scotland, it actually pre-dated the launch of i-mode in Japan by a few months. Only France’s in-Fusio could claim a similar headstart on the rest of the gaming business.

Digital Bridges was created to explore the opportunity for SMS and WAP gaming. A small stampede followed as Britain’s games programmers turned their attention to the smallest screen. Many, including Morpheme, Rockpool, Sprite, Distinctive, Affinity and 8-Bit are still going strong.

Dave Vout, of 8-Bit, believes there’s a cultural dimension to this: “Around every UK corner is a mad genius creating something for their own amusement without stopping to think of the cost or the commercial value, and thankfully every now and again one of them is well liked and a success,” he says.

Mark Curtis, MD of Flirtomatic, agrees: “The UK has a creative industry hub and this feeds sectors like games and design which are integral to the whole show.”

This hunger for innovation goes beyond just gaming. Melodi, for example, has been responsible for headline-making products like the Mosquito Tone (that could only be heard by youngsters) and the astrology video ‘mobcast’.

Co-founder Iain Keer says: “We are constantly researching new ideas for mobile products. As a B2B provider we really need to research current fads and trends to create innovative products that our clients can take to market confidently. In fact, our ringtone and music download offerings have never been in such high demand.”

For all the abuse heaped on operators, they too have had a hand in making the UK a hub of content activity. They launched services early, and offered relatively generous revenue shares, offering up to 80 per cent on premium SMS compared with 50 per cent in some Euro territories. Mark

Fitzgerald, MD of MX Telecom, offers: “The UK networks have been quite pioneering in launching new technologies such as shortcodes, and held on to a lesser revenue share of a large pie. It’s helped many content services to launch what, under European revenue share rates, would never make financial sense.”

Anil Malhotra, senior VP of alliances and marketing at Bango, adds: “There are four operators in the UK with a roughly even market share, so competition is intense. It’s not like this in other countries, where one or two tend to dominate. I think this has made a big difference to the market.”

His point is reinforced by the fact that all four launched major WAP portals – Voda Live, O2 Active, Orange World and T-Zones – within months of each other in 2002.

Not that we should overlook the contribution of the fifth operator, 3, which doesn’t even call itself a mobile network but a ‘mobile media’ company. Although 3 is international, its UK unit has been a genuine pioneer. It sold 20 million music videos in two years and introduced the idea of user-generated, user-rewarded video with SeeMeTV. The enthusiasm for mobile video has helped create conditions for producers such as Mobstar to flourish.

Finally, perhaps there’s something in the uniquely British paradox of individualism and propriety that makes the UK such fertile ground. The UK encourages entrepreneurialism but also has strong regulators; go ahead and do it, but be sensible, in other words.

Jeremy Flynn says: “It’s helpful that the operators align as best they can on regulation – compared to the uncoordinated strict rules in the US, for example. Regulators like ICSTIS are better, I suppose, than some around the world.” This thinking might explain the UK is just about the only country in the world where mobile gambling is formally approved.

UK readers should be proud. Even if their sports teams never win anything.