An interesting example of the flawed mobile business model surfaced this week. According to Matthew Feldman, president and CEO of Versaly Entertainment “Anyone in the mobile industry will say reporting is probably one of the weakest segments of the mobile industry”. Jack Hallahan, VP of advertising and brand partnerships at MobiTV Inc., which has almost 4 million subscribers said the company also has the problem. “MobiTV knows what device type is watching at any time, but it still doesn’t know who that user is”, he said. The problem is that whilst they know the device the content is being viewed on they don’t have any detailed demographic information. “We don’t have a data point of exactly what’s happening on the last mile,” Hallahan added.
The information is held by the carriers but they are not sharing it. Not only are they not sharing data they are also taking a large share of the revenues for providing the pipe for distribution of digital media like video – typically 35%. The combination of these two factors is reducing investment and stifling innovation. Until the business model changes mobile will suffer. Interestingly, in the US data revenues fell for the first time ever in the second half of 2007. Will it take an economic collapse of the scale seen in the music business caused by innovative consumers to force the change or will carriers wake up and smell the Begonias?