IFRA

“The Japanese mobile market is both a testing ground and an early warning system for the possibilities that a fully functioning mobile ecosystem can provide,” explain the authors of a new book “The six immutable laws of mobile business.”

The book has just been published (January 2010) and one of its authors,
Philip Sugai, will be a speaker at our 8th Mobile Media Days (18-19 May 2010 in Amsterdam, The Netherlands).

We have asked Philip Sugai and one of the book's co-authors, Marco Koeder (Executive Director of Cybermedia KK), to give their opinions about the evolution of the mobile industry outside of Japan.

You have noticed the effort of media companies in US and Europe to catch up with mobile users. From your “Japanese” perspective, do you have the feeling they are on the right track?

Marco Koeder: The good part of it is that they started to look at mobile as an important medium. Yet how they embrace the mobile platform is, to put it nicely, "suboptimal". It is not enough to move your existing content to the mobile platform. Mobile user behaviour and a mobile user’s mindset differ. This is what media companies need to embrace. They need to create a solution or a service that embraces the mobile "personal ecosystem" users thrive in. If you simply seek to expand your media platform strategy by adding mobile as an "extra screen" for your existing solutions, then maybe users will accept this. But do not expect this to compensate for the losses in revenues in your classic media. It is merely an "extra screen", not a magic revenue machine. For real revenues it is necessary to offer users new mobile experiences. This can range from transforming and enriching your existing content into a compelling mobile offer up to creating completely new and unique mobile services and products. For publishers and media companies, user-generated content and local or location-based content should play an important role in their (mobile) strategies. Media companies and publishers should also start to focus again on their core competence. This competence is not about printing magazines or newspapers but it’s about aggregating, analysing, evaluating, editing and distributing quality content. We provide more detailed examples in our discussion of our 5th Law related to mobile business models.

Who will give "traction" to this mobile market? Someone rightly underlined in your book that the carriers are themselves lost in their strategy. Is there a force in our western world that could help thing progress?

Philip Sugai: The most likely candidates are those companies who will realise the most downstream benefits as the Mobile Internet evolves, irrespective of who are the main players in building the most effective content and services. In Japan NTT DoCoMo and its competitors initially provided upwards of 90% of monthly subscription revenues to content providers, in an effort to stimulate innovation and truly customer-focused solutions. But they shared 0% of the packet fees that mobile consumers spent in accessing and using these solutions. Although in our "Law of the Ecosystem" Chapter we presented Google and Apple as potential "forces" that may act in this same way in the West, I think there are still enormous opportunities for those companies that can create such models and effectively implement them. Although it is very, very late in the game for operators, there still may be time.

In Japan most of the monetisation issues are solved. What could our publisher adapt from the Japanese model, is there one thing at least that is in their control?
Philip Sugai: I have been very lucky to have the opportunity to present at WAN-IFRA events for the past few years, and I have repeatedly assured those publishers in attendance that they hold the upper hand. It is just a hand that is taking longer than necessary to be played. Fundamentally, the end user is consuming content, not a device or a network service. And if it is created and presented in a way that is truly valuable to that customer, then that person will surely pay for the level of value which that service provides.

So publishers can control the partners with whom they choose to align (or invest in) within this race to effective monetisation, and at the same time I would strongly recommend that publishers invest their remaining time in devising the most valuable mobile solutions from their content. Too many times the mobile platform is considered a "dumbed-down" version of the "robust" PC Internet. This is the wrong approach, and one that will lead to a future in which the monetisation issue is solved, but there is no compelling content generated by established media publishers to take advantage of it.
So my advice to any publisher who is serious about delivering valuable content via the mobile platform is to spend a great deal of time building their mobile solutions from scratch, rather than "re-purposing" existing services from the PC internet. This exercise alone will lead to breakthroughs in thinking, and will also help in developing what we call "Simplex" solutions.

If you can’t wait to read the book, here are in brief those “Six immutable laws,” introduced by the authors, which could help you distinguish mobile myth from mobile fact and regional characteristics from universal truths. (You can also read Chapter One Immutable law n°1: Value over culture in the attached PDF).

• “Our first law of mobile business focuses on the value of mobile services rather than the cultural environment within which they are developed.
• Our second law is the law of the ecosystem. We explore the different wireless technologies that have been deployed globally, and the achievements of the operators in Japan in developing a platform for mobile innovation unlike any other in the world.
• Our third law is focusing on the empowering nature of the mobile platform versus any other communications channel deployed to date. For example, we will show you how the mobile platform empowers modern businesses to attract and retain more loyal customers. We will also examine negative elements that arise, including breaches of security and privacy.
• Our fourth immutable law of mobile business describes new “time zones” peculiar to the mobile channel. We will introduce you to the idea of “in - between” versus “golden” time, and what each means for businesses hoping to obtain high loyalty levels from mobile consumers.
• Our fifth law focuses on the emergence of some of the most viable mobile business models to date, using a number of short case studies to show how the more advanced mobile services in Japan are folding Web 2.0 applications into their service offerings.
• Our sixth law describes why the Future is simplexity. In exploring this concept and its overall impact on the technology related industry and society itself, we return to where we began, looking out at the world, on the brink of the true Big Bang of mobile Internet innovation that will empower consumers and businesses in ways we cannot imagine, all based on one important subject: the user” .

Philip Sugai, DSc, MBA, is the Director of the Mobile Consumer Lab and Professor of Marketing at the Graduate School of International Management at the International University of Japan.
Marco Koeder, MS, is Executive Director of CyberMedia K.K., a leading digital media agency in Japan. 
Ludovico Ciferri, MA, is Research Manager at Istituto Superiore Mario Boella, where he is in charge of the Japan and Australasia regions. He is a researcher at Mobile Internet Capital, Inc.

If you’re looking for the book