Mobile Invisible Revolution

The Invisible Revolution Hints from Asia on the Future of Mobile Benjamin Joffe, CEO | +8* | www.plus8star.com Mobile Focus Conference | Stockholm | November 2008

I am going to talk about Asia Mobile music Mobile TV Mobile advertising Mobile commerce Mobile books Mobile SNS 2008 Trends What to remember for 20 minutes

Introduction

Internet Mobile 1.3 billion 3.3 billion Source: Morgan Stanley, 2007

Johnny Hallyday The Father of French Rock’n’Roll

Manga: 1991 Animation movie: 1995 Matrix: 1999

General assumption #1 Everything from USA is great

General assumption #2 Everything from Asia is weird (and sometimes funny)

Who came first?

Where do you get inspiration from?

Innovations are bound to happen

The 7 Mass Media 1st Media Print 2nd Media Recordings 3rd Media Cinema 4th Media Radio 5th Media TV 6th Media Internet 7th Media Mobile Source: Tomi Ahonen, 2008

Quick overview

3G penetration in Japan and Korea is over 70%; it is <0.1% in China

100% 80% USA 60% 3G users 40% Chin Japa 20% a n 0% 0% 20% 40% 60% 80% % of Internet connections measured above 5Mbps (Source: Akamai)

#2 economy, #1 mobile society #1 mobile & Internet population #1 digital society

Japan stopped selling 2G in 2007

Mobile music

Japanese like ring tones Because they go to karaoke a lot Anonymous manager at a foreign media company in 2001

More music is sold “online” than “offline” in China and Korea

90% of digital music sold in Japan is mobile

Digital music revenues in Japan Source: Infinity Venture Partners, 2008

Ringback tones were created in Korea and launched in 2002 They reached 30% penetration in 9 months Source: NMS Communications

Mobile TV

Koreans now spend more time on the Internet than watching TV

Mobile TV penetration in Japan and Korea is over 30%

37 million mobile TV phones were sold by June 2008 in Japan Mobile TV started in May 2006

Over 70% of new handsets in Japan are mobile TV-enabled

Mobile advertising

Minimum advertisement hides the maximum potential. Mobile is today the ultimate proximity media, and reaching the Mobile is reaching the Consumer. Akihisa Fujita CEO of D2 Communications (Leading mobile marketing firm)

The mobile ad market in Japan was over 700 million USD in 2007

Have you heard of?

QR code in a train station with directions to a hotel QR code on a web page QR code printed on chocolate

TV ad for a show’s website Train ad Magazine ad for job portal for cosmetics Newspaper ad for health product

Guess who Blyk benchmarked? Blyk?

Beyond mobile advertising Mobile Commerce

Moba-Oku (DeNA) Mobile Auctions 1. Take pic 2. Select category 3. Enter info 4. Check 5. Done!

Over 6 billion USD in 2007

Japan’s m-commerce = 2x mobile content = 10x mobile advertising = China’s e-commerce

Mobile books

Several best-selling novels in Japan were written on mobile phones

One full bookshelf for mobile novels at Kinokuniya, Japan’s largest bookstores chain!

The two volumes of this book “Koi Sora” (“Loving sky – story of a love without gentleness”) sold…

“Koi Sora” sold over 2 million volumes (8 EUR / book) (You can read it for free on mobile)

Even on TV!

Digital books: Internet vs. Mobile Flat-fee data plans are introduced Source: Infinity Venture Partners, 2008

Mobile Social Networks

“Social Networking Is Not a Business” MIT Technology Review July/August 2008

Build communities with matching games Attract user with free games Chat Avatars BBS Journal Clubs Get new users with Word-of-mouth

Starting date 2004 1997 1999 2004 2006

Registered users 60 mln 500 mln 20 mln 14 mln 10 mln

Country’s Internet users 60 mln 500 mln 20 mln 14 mln n.a. 200 mln 220 mln 35 mln 90 mln 90 mln

Starting date (mobile) 2007 2000 2004 2006 2006

Mobile users (est.) 3 mln 50 mln 6 mln 10 mln 10 mln

Country’s mobile users 3 mln 50 mln 6 mln 10 mln 10 mln 255 mln 580 mln 45 mln 100 mln 100 mln

Revenues 2007 (USD) 150 mln 520 mln ~200 mln 100 mln 150 mln

Profit 2007 (USD) (50 mln) 225 mln ~100 mln 35 mln ~60 mln

Average Revenue From Users ~0% 87% 80% 5% 50%

Impression unit price PC Mobile April 2005 April 2006 April 2007 May 2008

SNS on the stock market?

Market-listed SNS 2006.12 2004.06 2006.09 2005.02 100 bln HKD 87 bln JPY 104 bln JPY 76 mln EUR 10 bln EUR 700 mln EUR 830 mln EUR

Market-listed SNS

2008 Trends

SH906iTV for NTT DoCoMo (June 2008) Mobile TV service “One Seg” Twist screen with data menu overlay Decorated and animated mobile Internet browsing (left) messaging

Mobile service trend Mobile TV Mobile web browsing service Video phone call Mobile widget

Mobile lifestyle infrastructure

Mobile  Media

3G + Flat-fee data

For content, media and advertising: New service & revenue models

For mobile carriers: indirect effects of innovations

Music service helps KDDI double its new subs Monthly growth index 1.50 New subs share / Market share Ring songs December 2002 Full Song Downloads November 2004 1.00 0.50 0.00 Nov-01 Nov-02 Nov-03 Nov-04 Nov-05 Nov-06 May-01 May-02 May-03 May-04 May-05 May-06 Aug-01 Feb-02 Aug-02 Feb-03 Aug-03 Feb-04 Aug-04 Feb-05 Aug-05 Feb-06 Aug-06 -0.50 Source: Telecommunications Carriers Association, 2007

More revenues from indirect effects? Revenue in 2006 0.2 EUR / song Content fee (revenue share) 10 MEUR 50M full songs 44 EUR monthly ARPU New subs thanks to innovation 330 MEUR (~50% of subscribers increase) 1.25M new users 1bln EUR! Increased usage of existing subs 4.5 EUR monthly ARPU (~50% of data increase from 2.5G 648 MEUR to 3G) 12M 3G users Source: [+8*] estimates based on KDDI figures

To remember from the KDDI case KDDI do not get much revenues directly from music but record companies do and mobile music is still growing! KDDI makes HUGE money thanks to “halo effect” & indirect revenues from music data packages new subscribers churn reduction

Thanks!

Thanks! & Rock’n’Roll :-)

About +8*

There are more ideas outside your country than inside Tom Kelley CEO, IDEO The 10 faces of Innovation

“Innovation Arbitrage” • About us – +8* | Plus Eight Star is the leading cross-market and cross-cultural consultancy in Asia. – We provide local expertise & global perspective on mobile and Internet innovation from China, Japan and South Korea to add value to and accelerate the development of our clients’ businesses. • Our services – Analysis of proven best practices and business models from Asia – Other services: executive study trips, market entry strategy, M&A advisory, partners identification, negotiation support. • Founder & CEO: Benjamin Joffe – 9 years experience with mobile & Internet in Asia – Selected among “China’s Top 100 mobile industry influencers” in 2007 – Regular speaker at events on mobile and Internet in Asia – Fluent in English, Japanese, French with working knowledge of Mandarin, Korean and Spanish

Selected References • Adidas | E-commerce strategy for China, Japan & Korea • Bouygues Telecom | Cases studies of leading Asian Web 2.0 services and virtual worlds • Deutsche Telekom / T-Online | Benchmark of Korean mobile & Internet convergence strategies • Hemisphere | Analysis of mobile marketing best practices in Japan and South Korea (Hemisphere is a leading digital advertising agency), analysis of leading social platforms (SNS, virtual worlds, online games). • Microsoft | Analysis of Japan’s key players and market catalysts for mobile commerce market positioning in China • DeNA | Case studies of the best practices of leading social networks in China and South Korea (DeNA operates Mobile Game Town, Japan’s leading mobile SNS service) • China Mobile | Benchmark of Korean leading online communities • Sands Capital Management | Evaluation of China’s investment opportunities in social networks in China

Social Work • Mobile Monday – Founder of the Mobile Monday forum in Beijing since 2006 (3,000+ members, 23 events, over 80 presentations). • Media – Monthly column on Asian innovation for Asian Business Leaders (one of the leading Chinese business magazines), numerous interviews in international media. • Events – Regular keynote speaker and moderator at Internet, Telecom, Media and Investment events e.g. ITU Asia, Asia Venture Capital Forum, China Mobility International Summit, O’Reilly’s Graphing Social Patterns, Red Herring Asia, Media 08 Conference, Wireless Developer Forum, Open Web Asia, XMediaLab, Mobile Monday Global Summit, etc.)

Contact Us www.plus8star.com benjamin@plus8star.com benjamin0123 +81 | Japan +82 | Korea http://twitter.com/plus8star +86 | China Telecom & Internet www.linkedin.com/in/benjaminjoffe + Added Value * High quality www.slideshare.net/plus8star

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Mobile Invisible Revolution

by Benjamin Joffe on Nov 05, 2008

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Mobile Invisible Revolution — Presentation Transcript