“What we are characterizing in the mobile content space is an adult content market of about $633 million for the total year of 2006, which we have growing to about $1.45 billion by 2011,” iSuppli Vice President of Multimedia Content Mark Kirstein told XBIZ.
“In terms of its relative rank in the worldwide market, at $633 million, it’s the second lowest market segment, but it’s still not the smallest market segment,” Kirstein said. “It’s a larger total market than the mobile video market.”
“We expect that the mobile video will grow faster than any other mobile category,” he said. “Still, by 2008, which is just about a year from now, we’re projecting adult-oriented content to represent over a billion dollars worldwide, which is not insignificant. It’s not an enormous segment, but it’s still roughly 10 percent of the total global content market.”
iSuppli recently published a mobile multimedia content report entitled "Mobile Premium Content: Country, Operator, and Content Company Variance.” Though the report did not include separate data on mobile adult content, Kirstein said that the company does track the market in a stand-alone category.
“It is one of the only categories where we have a little less visibility into intensive geographic distribution,” Kirstein said. “Most of the categories we’re breaking down on a country-by-country basis.”
“What we’ve found that on the adult side of the industry that there are certain countries and locations where it’s less accepted by the general populace. Since we haven’t yet, backed with real good specific characteristics, determined the countries where it’s acceptable and where it isn’t, we haven’t yet been able to segment that down to a country-level basis,” he said.
Noting that cultural acceptance of adult content affects its growth in mobile markets in North America and some parts of Asia, Kirstein said that the bulk of revenue for mobile adult content comes from Europe, where culturally attitudes toward adult-oriented material is more open.
Earlier this year, Canadian mobile carrier Telus scrapped plans for a mobile adult content service after a threatened boycott by the Catholic archdiocese of Vancouver.
“That’s kind of the cultural scenario that seems to play out in the mobile environment,” Kirstein said.
Kirstein also points out differences in the infrastructures that support mobile data, both contractually and technologically, create a more receptive environment for adult content in Europe.
“Adult content of the mobile side is much more prevalent in Europe and part of that is the content providers contract with the operators, marketing directly to the operator and the operator really has no role in the specific content element,” Kirstein said. “So, they just play the role of the pillar and the delivery platform, but the content provider plays the role of marketing and customer interaction. And that has tended to make for a more favorable environment for adult content in Europe.”
Kirstein pointed out the 3G speeds in Europe are more developed in Europe, compared to the U.S., and tend to favor mobile over Internet-based content. The North American market, he said, tends to be more evenly distributed between TV, Internet and mobile channels.
iSuppli’s study examined key segments of the global mobile market including music, games, graphics and video.
The study also tracked 20 wireless operators, finding that nearly 20 percent of their revenue is associated with data. Three of these operators — SK Telecom, NTT DoCoMo and O2 — get more than 30 percent of their revenue from data content.
Overall projections for streaming and broadcast mobile video markets would exceed $6 billion in 2008, compared to $1 billion this year.
Asia will lead the Compound Annual Growth Rate (CAGR) of nonmessaging data revenue at 40.4 percent by 2011. At 29 percent, Italy will see the strongest nonmessaging data revenue CAGR through 2011 among major Western European countries. In Brazil, CAGR is expected to increase by 41 percent for nonmessaging data revenue in the same time period.
Though demand for video content is ramping up, iSuppli’s report shows ring tones are currently the strongest market segment.
“The big driver is music and, within music, the biggest driver is ringtones,” Kirstein said. “Ringtones represent about a $3.5 billion market by themselves already. It’s a very significant worldwide market. People will pay $3 for a little jingle.”
