Rediff has syndicated the cover story from India’s leading business magazine Businessworld. Thanks to Mobilepundit for pointing to this. This story is a very through assessment of the emerging mobile data industry in India. It speaks about an imminent inversion of the pyramid sometime soon. Currently, the revenue sharing that happens between the operators,media companies and aggregators is roughly 60:30:10. However,IMHO bulk of the assesment shows all signs of the Media 1.0 hangover. For instance – read this conclusion of the author :
“It is not control over content, but the ability to offer loads of it that is relevant and connects, which will distinguish one good mobile data service from another. Maybe joint ventures or equity stakes in content companies will help. But they are just security blankets. Ultimately, in a fragmented, oversupplied content market, it should be easy to get good stuff if you have a sense of what will work and what won’t. Media companies have a nose for it, mobile companies don’t. You could argue that, maybe, even media companies are not clear on how to create programming for this new ‘mobile snacker’.
There are several things that could happen. Mobile and media companies could build the skills (difficult) or buy the talent to do it. They could join hands to do it. A third set of companies such as Hungama or Soundbuzz might turn out to be better at picking and digitising what works best.”
Underlying assumption: There is nothing called user-generated content.Consumers are not prosumers.This is just an extension of the Media 1.0 world. This is a vertical value chain.
These, I feel are very dangerous assumptions. Given that 50% of the content in the mobile web will be user-generated, how should companies be looking at their value chain ? Horizontalization will be the key. Operators,aggregators and media companies need to let go of control and allow users to create,share and repurpose content. Bring the customer to the center of your universe. Allow communities of mobile consumers to co-create the experiences the want. Let go of the Media 1.0 hangover. It is time to embrace Media 2.0 – Understand and ride on the advantages that the edge brings to you. Whether you provide relevant content or not, that space will get commodotized sooner or later. Understanding that truly sustainable value resides with communities of mobile prosumers is the key – Unfortunately, I see a huge vaccum in this space in the Indian mobile market. This is the space that is waiting to be addressed potentially by some creative startup.
“There’s no middle ground. Those players who stick to yesterday’s models – whether content creators, distributors, publishers – get hypercommoditized. This should be crystal clear: just think of the huge number of media players getting killed, from newspapers like NYT and WPO, to magazines like Meredith, to broadcast networks like Sinclair, etc.
OTOH, those players who leverage the edge – who learn to create and capture value from the new forms outside the boundaries of the firms, like markets, networks, communities, commons – will capture the lion’s share of returns. This should be crystal clear: think of players as different as Apple and Google, both of whom are turning the media industry inside out by using markets and networks.
There’s another, simpler way to see this. It is a great economic discontinuity, which is already flowing like an avalanche across the economy: value will shift outside the boundaries of the firm, to more economical modes of coordination; it is those players who own or leverage them – who learn to build strategy and advantage around them – who will earn supernormal profits.”