Digital Communities on Mobile Phones also known as “Mobile Social Networking” and closely related
“Wireless User-Generated Content” and “Moblogging” (Mobile Blogging) are radically new forms of digital
community collaboration, using mobile phones either exclusively on mobile networks, or in conjunction with another
media such as online broadband internet, TV, videogaming etc.

Similar to recent internet social networking success such as MySpace, YouTube, Flickr, Wikipedia, Skype, Second Life and World of Warcraft; the newer mobile community services were launched only in 2003 and are growing faster and already deliver more revenues than their online cousins. Mobile social networking is worth 3.45 billion dollars in 2006, according to Informa, Oct 2006.

Social Networking on the web. User-generated content, interactivity and particiption, spreading of content in
“viral” ways. Citizen journalism, blogging, multiplayer gaming and online dating are all issues rather well understood
on the internet. MySpace already has 100 million profiles of its users. YouTube in America delivers larger “Nielsen
ratings” ie TV viewership in youth viewership than broadcast TV. Blogs (web logs, private diaries and commentary
online) grew from 2 million in 2004 to 60 million in 2006.

The first Massively Multiplayer Online Game, Everquest, was measured by the Financial Times in 2004 to be as big as the 77th largest economy on the planet – on par with whole countries like Slovenia, Colombia and Vietnam. Today larger virtual economies exist in World of Warcraft, Counterstike, Lineage and Second Life and millions of gamers spend hours each day creating ever more virtual property, that can be readily converted into real dollars.

New professions have emerged from professional gamers, to full-time “farmers of videogame treasures.” Skype the online telephony “club” grew virally, by member-getmember, in 18 months to become the second largest fixed landline telecoms operator with over 100 million users.

Economics of Communities. The problem with internet based social networking, is that while it is relatively easy
to build a very large community, it is difficult to monetize it. Skype for example has only converted a tiny fraction of
its users to premium services which generated 60 million dollars in 2005.

Most online communities hope advertising to make their money, as Google with YouTube. Mobile communities are slower to build, but they have an inherent ability to charge. Yet growth is still strong: 46 million people worldwide already post videos to mobile video sites, 90% of South Korean youth and one third of American youth post pictures from cameraphones to picture sharing sites.

The ability to charge has even been used by online (internet) digital communities as the mechanism to generate user revenues such as Habbo Hotel, the Finnish teenager virtual world spread already to a dozen countries with 7 million users. Habbo customers – teenagers without credit – buy Habbo currency with their phones. Why on mobile? Five primary reasons.

(1) The phone is available at the point of creation. Few people have a laptop with them everywhere. The digital camera sits at home in its camera case, but the cameraphone is in the pocket, always with us. So regardless of image quality or inconvenience of keypad, the cameraphone can be used on the spot, when the creative impulse strikes.

(2) At 2.6 Billion devices in use and being the most widely spread techonology on the planet, many more people have mobile phones than any other digital device, whether personal computer (three times as many as laptops and desktops combined), PDAs, digital cameras, iPods, etc.

(3) The phone is always carried, so it can be used as an alert channel. Whenever something “happens” in the digital
community, the phone is the ideal alert vehicle.

(4) The phone has a built-in payment mechanism, allowing original creators of content to be paid per view of content they have created. Finally…

(5) digital participation and collaboration appeals particularly to the youth, and their preferrred media by a wide margin – is the mobile phone.

Context, consider the rapid growth and total size. Digital community services on mobile are worth $3.45 Billion
in 2006. For comparison, total online music sales (Apple iTunes for iPod, and similar services), launched in 2001 are only worth about $800 million in 2006.

Total worldwide adult entertainment online, launched in 1994 in 12 years has grown to $2.8 Billion.Online videogaming also 12 years of age, is worth $2.2 Billion.

And for mobile data services (beyond simple SMS text messaging), in only three years, mobile social networking has grown past mobile advertising at $1 Billion, mobile TV services at $1 Billion, SMS-to-TV voting at $1.5 Billion, mobile gambling at $2 Billion, mobile adult entertainment at $2.4 Billion, screen savers $2.5 Billion, and mobile gaming at $3 Billion.

Mobile social networking is the second largest revenue source behind ringing tones at about $5.5 Billion. At current
growth rates, mobile communities will become the largest “value-add” or premium mobile data service by 2008.

Beyond just being interactive. When many think of mobile social networking, they tend to think of interactivity,
like that of SMS voting on reality TV formats like Pop Idol/American Idol, Big Brother house, Survivor island etc.

Yet interactivity is the very first step into a community involvement experience. More immersive and intense
involvement becomes out of user-generated content such as citizen journalism as in Ohmy News in South Korea,
or user-generated blogs and videos. The deeper the involvement in the community, the more addictive it becomes.
Easiest – Create mobile links to a web community.

The easiest way to enter the mobile social networking, is to build mobile links to existing online communities such as mobile alerts. The Volvo Round-the-world Sailing team game, for example, offers real time wind changes via premium SMS.

Bloggers use something called RSS (Really Simple Syndication) to get updates on the web. By RSS feeds to mobile phones, a blogger can gain greater convenience to the activity of blogging online. “Mobile modules” can be added to online games, such as the ability to “train” or build your gaming character on your mobile phone or phone identities to online games like BotFighter.

Harder – Build a mobile variant of an online community. The next stage is to port an existing web concept and
launch it onto mobile. These include the mobile versions of dating services, auction sites and mobile variants of
multiplayer games.

When porting an online community to mobile, new opportunities emerge, such as the example of SeeMeTV, a video sharing service for mobile not unlike YouTube, MSN Video and Google Video. But in SeeMeTV, each original video creator is paid every time his/her video is viewed. In its first six months SeeMeTV in the UK had paid out 100,000 UKP to its members for “royalties” on other members viewing their videos.

Most difficult – Develop an original mobile community concept. Creatively most challenging, but potentially the
most lucrative opportunity arises from original communities delivered primarily (but not necessarily exclusively) on
the mobile phone.

For example the pop band fan club on mobile as Hong Kong youth duo Twins did – they also
launched their own telecoms service as an “MVNO” (see Ahonen Thought Piece on MVNO’s), but since then
several pop, rock and rap bands have launched fan clubs around mobile phones with newsletters, fan chat, music
reviews, exclusive tickets; as well as ringing tones, cuts from albums, screen savers etc.

More advanced variants include US dance artist Rihanna offering the ability to isolate dancers from her music video and learn the dance moves; UK trio Sugababes inviting fans to send dance moves via video: best to be sed by Sugababes onstage; and UK dance label Ministry of Sound inviting fans to submit user-generated music videos for their latest hits.

Generally the more a service caters to the youth, the more it finds appeal. UK mobile blogging service, Moblog UK,
set up a contest to send pictures for the “anti-Valentine’s Day” card and received massive interest by the youth.

Rules of Thumb. On the internet where all user-generated content tends to be free, a rule of thumb says the ratio
of user-generated content to that content being shared, is about 1:1000. On mobile phones with charged content,
first cases the rate is 1:100.

This impacts on the business models and user charges on mobile social networking. In Japan (with one of the highest penetrations of broadband) where already more access the web from mobiles than PCs, internet daily usage on mobile is already 25% higher per user than on a PC.

As to the same community service available on both fixed and mobile, Flirtomatic finds 20% higher usage by mobile users than fixed. Jupiter reports on viral, that 69% forward content they like, to 2 – 6 friends; 64% will try something forwarded by a friend.

Not exclusively Mobile. A final thought from the ground-breaking book Communities Dominate Brands (Ahonen
& Moore, Futuretext, 280 p hardcover, 2005, 2nd printing) is that while some services may work as “pure” mobile
services (like SeeMeTV, MyNuMo both of which pay creators when their content is used), most successes of
mobile social networks are built for multi-platform access, like Cyworld, Habbo Hotel, Flirtomatic, and the UK
university broadcast, web and mobile service SubTV, etc.

The creative effort becomes even more demanding as it requires an understanding of multiple competing technologies (broadband internet, wireless data, digital TV, multiplayer gaming and mobile telecoms), each of which is evolving at breathtaking speeds.

Case Cyworld. South Korean Cyworld has virtual worlds like Habbo Hotel; picture sharing like Flickr; video sharing
like YouTube; user profiles like MySpace. It includes blogging and mobile blogging. 90% of Korean teenagers and
43% of the total Korean population are active in Cyworld.

Korean businesses discovered Cyworld and today over 30,000 business enterprises are present in Cyworld, with over 500,000 items of digital content for sale.

200,000 songs sold daily; Cyworld is now Korea’s biggest music outlet. Cyworld has spread into China, Japan,
Taiwan, USA and Germany. American youth familiar with both say Cyworld is two years ahead of MySpace.

Tomi T Ahonen has workshops and executive seminars ready to run. Write for more information.

Tomi T Ahonen is a four time best-selling author and strategy consultant on 3G telecoms and mobile communities who lectures at Oxford University on digital convergence. He ran Nokia’s 3G Business Consultancy and 3G Research Centre.

Tomi’s reference customer list reads like the who’s who of mobile telecoms, including Ericsson, Orange, Motorola, Nokia, NTT DoCoMo, Siemens, TeliaSonera and Vodafone. Tomi’s fourth bestselling book “Communies Dominate Brands” was the first business book on social networking across multiple platforms including mobile.

Tomi regularly runs mobile social networking workshops for customers around the world. Tomi is a founding member of the Engagement Alliance, Forum Oxford, Wireless Watch, and Carnival of the Mobilists. He blogs at www.communities-dominate.blogs.com. His website is www.tomiahonen.com

Further reading… Thought Piece – Mobile Telecoms Industry Size 2008

Filed under: Internet Marketing Information

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