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Mobile GPS Opens Doors to Content, Commerce

This article is derived from a panel discussion at Digital Hollywood 2009. Because of its length, it will be broken into two parts.
At a Digital Hollywood session last week, panelists considered the impact of GPS and location-based services (LBS) on mobile content and commerce. Moderator

GPS-enabled phone

David Waite, director at Altman Vilandrie & Company, led a discussion with Josh Shabtai, vp of marketing at ringtone provider Vringo; Dr. Christophe Ramstein, CTO of Immersion Corporation, which OEMs tactile feedback on the handset; Jason Yim, president/executive creative director of digital marketing agency Trigger; and John Underwood, COO of Aggregate Markets.

Waite pointed out that, by 2014, there will be a 46 percent growth in GPS-enabled mobile phone shipments worldwide. “We’re seeing evidence there’s big growth here and that mobile commerce and location based services are overlapping,” he said. “It looks like there’ll be traction. Some hoped that Second Life would be a site for that, but Facebook and multi-user gaming environments bring people into a captive location where they’re available for commerce activities. Increasingly, we’re seeing a more holistic commerce experience with the overlapping of location-based services and mobile entertainment with mobile commerce.”

He asked panelists to consider what the market opportunities are. “What’s the ecosystem growing up around these converged components?” he asked. “What’s the business model? How will people make money in this space and what are the technology considerations? And, lastly, how are entertainment, LBS and content converging?”

Shabtai pointed out that “the average American user still makes 200 phone calls a month.” “The time they spend as they receive and end calls looking at their screen adds up to 30 minutes a month,” he said. “And nobody’s doing anything with that space.”

Underwood, who noted he hasn’t worked directly in the mobile space, said that, “a lot of the issues that people have addressed on the PC side are porting over to mobile via netbooks and smart phones.” “We’re starting to blur the lines with all these devices,” he said. He reported that his company works with Gidget, an entertainment content widget platform where people can virally share information. “We’re embedding commerce opportunities and the transaction can be completed within the unit,” he said. “Why is that important to mobile? Because the same issues of reducing friction are even more important to mobile where the interface is more constrained.” He added that the commerce application will be rolled out to mobile.

The ubiquity of LBS is inevitable, Underwood also noted. “A few years ago, location-based services were dominated by unique providers,” he said. “As we move forward, it’ll just be another feature, another component, used by everyone where appropriate. As long as you provide value to the end users, as long as you provide some sort of privacy settings and annoyance settings, adoption and acceptance won’t be a problem.”

Ramstein pointed out that “the key driver of this is the technology platform itself.” “It’s an ‘if you build it, they will come’ scenario,” he said. “These devices are more powerful and connected, they’re a blank slate upon which different marketing and commerce models can be built.”

Shabbtai reminded listeners that, “the mobile device is primarily about connection.” “Most panels here are about, oh my god how are we going to monetize this platform?,” he said. “Paid search and social recommendations are king in terms of guiding behavior and purchase decisions, so naturally location-based services will turn mobile devices to make your experience more contextual. Advertisers will serve up more appropriate information.”

Yim reminded everyone that the market isn’t yet mature, since the first iPhone apps from Hollywood studios came out about six months ago. “What we’ll start to see is apps where there’s a fun game for a movie, so when you go to, say McDonalds, and play the cartoon game, you’ll win a coupon,” he said. “And as soon as you leave the location, that feature will turn off.” LBS may initially be annoying to consumers but it will also become a “neat feature” for them. “Another thing we’re looking at is augmented reality and image recognition,” he said. “With your phone, you can take a photo of a print magazine ad and overlay it with animations and it almost looks like a hologram. Or you can take a photo of a movie poster and image recognition unlocks a coupon.”

Shabbtai said the most interesting recent application he’s seen is the one Trent Reznor launched for Nine Inch Nails. “He gives all his content away for free,” he said. “He put out an app that basically connects you to other Nine Inch Nails fans wherever you are, like a mini-Twitter feed. The application is free. Nine Inch Nails is now touring, so if they get enough people to their shows, interesting things will happen. It’s using LBS and rich media streaming to bring people together in new ways.  It’s selling a live experience.”

Yim pointed out that “one thing we’ve learned is that although this technology is available on the phone, you have to keep the user experience very simple.” “Geeks and nerds get caught up trying to create something amazing, but if 90 percent of your users can figure it out, it’s failed,” he said.

Waite asked the panelists who the primary participants in the ecosystem are for mobile entertainment, LBS and commerce?

“Fundamentally, the primary one is the consumer,” answered Shabbtai. “They’re using these technologies in ways that fit their lives. That’s where it all begins. That said, you’ve got all these other players. All these different players are trying to do some of the same things. The economics might not be there for everyone.”

In the Hollywood studio system, said Yim, the different departments have different agendas. “Theatrical guys wants butts in seats, and they want [these applications] out for free. Other departments, like licensing, their mandate is to make money with these film licenses they have. Theatrical marketing people have a bit more clout; there are studios where every single movie that comes out will have an iPhone app.”

Tags: Altman Vilandrie & Company, augmented reality, Digital Holllywood 2009, GPS-enabled phones, Hollywood studios, image recognition, Immersion Corporation, iPhone app, LBS, location-based services, make money with mobile, mobile commerce, mobile devices, mobile entertainment, mobile GPS, mobile marketing, monetize mobile, netbooks, Nine Inch Nails, rich streaming media, smart phones, Trent Reznor, Trigger, Twitter feed, Vringo, widgets

This entry was posted on Tuesday, May 12th, 2009 at 8:54 am and is filed under Advertising/Marketing, Content, Devices, Home Feature, Monetizing Mobile.