the discovery dilemma
November 2, 2007
By Tom Wheeler
And now your moment of mobile existentialism. We all recall the high school question, “What if a tree fell in the forest and there was no one to hear it? Would it make a sound?” Now we can update that for the mobile world with, “What if mobile content is available, but no one can find it? Does it exist?”
The excitement in wireless today is not in voice. There has been nothing new in voice since push-to-talk. The excitement — and the future of the industry — is all around non-voice content.
Why then is it so hard for the consumer to discover and purchase these non-voice services? The content tree is falling, but there is no one to “hear” it because no one can find it. Since no one can find it, buy rates are nowhere near what they should be.
The wireless industry faces a discovery dilemma. Wireless is such an obvious vehicle for delivering content, and there are so many content providers who see the potential, that content has overwhelmed the current generation of wireless devices. According to Nielsen, the average carrier deck for one popular phone model includes 112 applications, 549 games, 101 Web sites, 59 video channels, and over 7,000 tones.
No wonder a recent Forrester Research (News - Alert) study found only 44 percent of U.S. mobile subscribers use any of the non-voice services available on their phones and that 88 percent of that non-voice use is text messaging. They can’t find anything!
But wait, it gets worse. A study by Harris Interactive (News - Alert) found only 57 percent of mobile subscribers said that by 2010 they would use their phone for more than making and receiving calls. Because consumers can’t find it, it doesn’t exist.
Consumers (and those who seek to deliver mobile content to them) are facing a deadly double-whammy — the combination of being simultaneously overwhelmed by the choices and exasperated by the difficulty of finding and buying an app that might interest them.
The mobile device itself should be the best promotion tool. The sales messenger is in the consumer’s hand. But consider how hard it is to use a mobile device to discover content. On some carrier decks, for instance, it takes five clicks to get to a purchase. Imagine the consumer who has heard of a content app such as a game and goes to the phone to buy it…
- Select “download” from the main menu and click,
- Select “applications” from the downloads menu and click,
- Select a category screen and click,
- Select another category screen and click,
- Finally buy the app with a click.
The rule of thumb is that there is a click half life: you lose half of your audience with each click. At the rate of five clicks to buy, 97 percent of the consumers who started out on the quest to buy the app will have dropped out. If we don’t do a better job of helping consumers discover and buy content, the mobile content business is going to be one huge forest with trees crashing everywhere but without any effect.
The discovery dilemma is a serious challenge to the non-voice future of the wireless industry. Absent an on-device solution, the easiest way for the consumer to get content may be to disintermediate the problem altogether and go directly to the Web. After all, the Net has historically disintermediated inefficiencies and the discovery dilemma is just one more such inefficiency. In such a situation, the carrier is just a delivery pipe and a billing engine rather than a content network. I doubt wireless carriers like that vision, but unless the discovery dilemma is resolved that may be their future.
Tom Wheeler is a managing director at Core Capital Partners, a venture capital firm specializing in early stage technology-based companies. He has been CEO of both the Cellular Telecommunications & Internet Association (CTIA (News - Alert)) and National Cable Television Association (NCTA).