Unless you're currently dead, you probably know that Madonna is coming to Moscow. You might have seen some of BeeLine's advertising promoting this event, as well as special sales of Madonna music, video and photo content for the mobile phone. Recently, in particular this year, the Big New Thing in the advertising world is "content creation." Everyone is falling all over themselves trying to firstly understand what "content creation" is, and finally to see how they can make money from it. For the mobile operator, the latter concern is paramount to future growth and profitability.
For MTS and BeeLine, this is the equivalent of the next cola wars. Both of them are spending millions in order to be seen as THE content provider. In many markets, voice traffic has already become a commodity. At first it was about tariff reductions. Then it was about free incoming calls. Then it was a flat monthly fee. It's gotten to the point where there's simply no way left to cut fees without taking a loss. Eventually, voice traffic might well become the "lost leader" for mobile operators, meaning they'll make all their revenue from incremental content sales and re-sales. However, before this happens people need to know what to do. Hence this push for content consumption.
The task is twofold. First, get people to start buying mobile content. While the technology has been available for some time now, it has largely been an industry driven development, rather than one created from consumer demand.
Consider this: How would a Pepsi launch a new product? Well, they would do some research into current trends within a given consumer group. They would then come up with a flavor/concept, do a trial, and test it on their target audience. After this test, they would fine-tune and launch the content.
The telecommunications industry didn't quite do it this way. Imagine a room full of badly-dressed tech geeks, sitting around a bunch of computers, getting really excited about some really awesome source code. These are the people who brought us 3G technology. I can recall being at a telecommunications conference some years ago, and a representative from France Telecom was at the podium proudly boasting how they were the first to introduce live streaming audio over the mobile handset. Live streaming audio is the technology that allows you to listen to radio over the Internet, employing packet data instead of traditional voice data.
Think about the real world application of this technological achievement. France Telecom likely invested billions of dollars into research, and countless man-hours into development, so that they could achieve...wait for it...ready?...so that they could broadcast sound over a mobile handset. Well, um, that's kind of what mobile handsets do, no? This is what 3G essentially is: a bunch of really cool geek technology that no one in the real world knows how to use or worse, how to make money from it.
Mobile operators have now realized that in order to make money from this invested technology, and in order to ensure growth in the face of a commoditization of services, they have to show the non-geeks how cool this technology is. Hence, Madonna.
After building this behavior pattern, the second major task for the mobile operators is to be seen as the leader in offering this service. Think of mobile operators as shopping malls, and all the little shops inside it being the content. Malls will spend great sums of money to bring people in, so that the shops inside will thrive and pay rent. MTS sponsored the Black Eyed Peas show, and now BeeLine is pimping Madonna. In addition, BeeLine has recently signed a deal with Warner Music to supply their subscribers with exclusive mobile content from Warner.
This is going to be the next big thing, folks. Tobacco and alcohol will use content as a means of delivering their message as they get squeezed out of traditional advertising channels. Next year, tobacco will be finally banned from all outdoor advertising spaces in Russia. They'll be pimping their own Madonna pop star shortly after that. Beer, liquor and eventually everyone else will be jumping onboard, selling access to films, concerts, videos, and so forth, in the name of advertising. Agencies are already launching content-focused divisions and the Warner group has built a special, separate division focused on providing little content snippets specifically for the advertisers.
What will this mean for the consumer? Well, in the short run, it will probably mean bigger events, bigger names, and a lot more interesting advertising. In the long haul, music, film and everything that's content based will be given away for free in the hopes of attracting a larger audience.
To all those suckers paying over $1000 to see Madonna, I say, just wait a few months...