Posts by Thomas Husson from January 2006<< December 2005 | Main | February 2006 >>
Thomas Husson | January 31, 2006, 06:31 PM The amount paid by Orange is 29M euros per season so 58M until 2008 contrary to what I mentionned earlier ! So, an important part of the video phone installed base would have to pay 5 euros / month during 10 months (no competition during summer) to recoup the investment...But as I said, it is more about branding and customer acqusition at this stage even though the service could generate significant amount of revenues in itself. In Germany, Premiere lost the contract for TV football rights with DFL (Bundesliga) to cable operators (a consortium of Kabel Deutschland and Unity Media). They spent 400M euros per year ! Reminds me of the Canal+ story...Deutsche Telekom has the rights for the Internet platform. By the way, guess who owns the mobile rights ? A telco ? Yes, you're right !
Thomas Husson | January 30, 2006, 03:16 AM The LFP (French Professional Football League) announced the results of the RFP for the French mobile rights (see my previous post here for part 1)...and the winner is...Orange. Orange previously owned the "Ligue 1" rights but only paid 8M euros. They are now ready to pay 29M euros for 2 seasons (until 2008) ! When I said, there would be a strong increase, I did not expect it to reach this amount. Competitors were SFR (the second French mobile operator) and media companies (eTF1, Canal Plus, Eurosport, TPS,...) but none of them offered such an amount. Looking at the number of mobile video phone owners, the return on investment is not obvious. According to Orange itself, the number may well reach 5M during 2006-2007 and 10M during 2007-2008. It simply means the objective is wider : enhancing the brand and gaining incremental market share. According to Emmanuel Vacher, Marketing Multimedia Director at Orange France, it will help to gain 3 to 5% in mobile broadband market share. The amount paid is less expensive than in the UK (47,6M euros for one season and not on an exclusive basis) or than in Italy (52 M euros) and not really significant for the France Telecom Group. However, it has a couple of implications for the market:
Thomas Husson | January 26, 2006, 09:35 AM 3 UK (a mobile operator, owned by Hutchinson) will launch an innovative offer on February 1st in the UK. The principle is simple and looks attractive: its "WePay" scheme offers to reward pay-as-you-go customers with a cash credit of 5p for every minute of a voice call and 2p for every text. For more details, see the article from the BBC here. The Register ("Biting the hand that feeds IT"; I love this slogan by the way) is skeptical that it is revolutionnary, claiming that it has not work very well in other countries. See here. There are risks indeed. But it is interesting to look at the Italian market where "Tre" has launched the same kind of offer (form of discount or credit bonus for incoming off-net traffic). As far as I know Vodafone and Telecom Italia would love to have the same ARPU than 3... That being said, the Italian market is specific in the sense that in Italy, many customers are equipped with multiple SIMs from multiple providers and operators facing the issue of maintaining leadership in terms of active service usage. So it encourages customers to advertise their new 3 number with familiy and friends so that 3 becomes thier main service provider. Personnally, I find that pretty clever all the more as 3 will also benefit from interconnection revenues for calls terminating in the 3 network... But let's see how it goes in the competitive UK market.
Thomas Husson | January 23, 2006, 06:00 AM As expected, SFR confirmed to be the first country where the Vodafone Radio DJ offer is made available. The service will cost 9,99 euros for a monthly subscription or 1,99 euros / day (great to discover the service or to attract the prepay market segment). SFR also confirmed a few figures: - 340K full-track music downloads for December only and 840K for 2005. According to Gfk, 20M paid songs were downloaded on the Internet. The ratio mobile / Internet is thus more than encouraging for a nascent market. No doubt mobile music stores will compete with the I-tunes, Fnac, VirginMega and HMVs of this world. SK Telecom, Korea's largest operator, claims to be the number one music store in Korea with 500k active users and 2M subscribers. My colleagues, David Card and Mark Mulligan, mentionned to me that Yahoo charges $5/month for an all you can listen to PC-tethered service in the US and that Napster charges nearly 15 euros for it's tethered service in the UK and 10 euros in Germany. So such a pricing may not be that disruptive. I do not know yet which DRM is used and if dual delivery (to PC) is available but I suspect it is... However, this is a first from a mobile operator in Europe, even though 3 Australia has recently launched a monthly subscription for only 3$ a month but it is not clear if the access is unlimited. Another news was the agreement allowing Ericsson to enable European mobile operators to distribute ringtunes and full-track downloads from EMI's catalogue in Europe. I thought the M-use platform (the name of the managed hosted services package offered by Ericsson to carriers wishing to provide their subscribers with music-based content services) was already offering EMI's catalogue. So far, the solution is white-labelled but the global partnership with Napster should enable carriers to benefit from the Napster brand. So far, customers using the M-Use platfrom are based in the Nordic countries (TeliaSonera and Tele2) except Sunrise and Swisscom in Switzerland. It does not appear to have a huge success. Nokia / Loudeye partnership, announced more than a year ago at the 3 GSM, did not perform particularly well. Does Nokia need a music brand as well or do operators prefer to rely on mobile specialists such as Musiwave and to a lesser extent Melodeo or Groove Mobile ? Not easy to say in the long run, but Musiwave and Sony Net Services are performing very well. An excellent overview of digital music trends is available from the IFPI. Click here to download the full 2006 digital music report. A must read.
Thomas Husson | January 19, 2006, 03:26 AM The music industry is gathering at the MIDEM in Cannes from Sunday onwards. No doubt mobile music will be at the centerpiece of many announcements. Record labels often claim that 5-6% of their total revenues derive from digital music, which compensates declining prices and margins on physical sales. However, the vast majority (roughly 2/3) of the digital revenues come from mobile and not from the Internet, simply because truetones are an increasing source of profits. Mobile operators are also keen to announce they manage to increase their data revenues because voice and SMS are likely to become a commodity in the next few years. Vodafone and SonyNet Services recently announced the launch of a new service called 'Radio DJ' (click here for the full PR), an unlimited music streaming offer to be rolled out in 20 countries worlwide. The interesting thing is about the personalization of the service (with like/dislike options) making the most of mobile phones unique dimension. The service is already available for SFR clients in France, even though not really marketed yet. The combination of the music content and the P2P communication platform is highlighted in the Push Music service, currently under development in Sweden : sharing music via bluetooth. Handset manufacturers are benefiting from this trend. Sony Ericsson announced yesterday to have sold 3M Walkman-branded phones since August 2005. Clients, if you want to have the full picture of what's happening in the mobile music space, have a look at our latest report here.
Thomas Husson | January 18, 2006, 01:32 PM Quite a long time I haven't posted a comment. It has been a busy early year... I attended a conference on Mobile TV and video (more on that later) in London and had the opportunity to have a presentation from Mike Short, VP at 02 and chairman of the Mobile Data Association. He released the interim results from the O2/Arqiva/ Nokia mobile TV trial currently taking place in Oxford. Some interesting feedback: - Mike Short made a very interesting statement in his presentation : we should not talk of mobile TV but instead use the term 'personal TV'. I do agree the mobile phone is all about having your own TV experience, picking n' mixing the content you want to watch. - 76% of users would take up the service within 12 months at an acceptable price. These figures have to be looked at very cautiously. Yes, there is obviously an interest for mobile TV, but does that mean people are really going to pay for it ? This is another story. A few comments on that: in the 02 trial, users are not paying any fee for mobile TV. So, obviously, when you get something for free, you are not likely to be as demanding as if you had spent your own money. A good evidence for that is that only 41% of users in the Finnish DVB-H pilot were willing to pay a fee for mobile TV. They had to pay 4,99 euros a month to use the service... I have asked several stakeholders to release the real figure to the following question : are you ready to pay 10 euros per month to watch TV on your mobile phone ? I am still waiting for an answer...
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