Mobile advertising in Japan

I with Peter Vesterbacka who made the case why Japan is an exceptional country for early-adoption of video-enabled social networking service (SNS).
1. Social networking users : 7 million, estimated 2 million using mobile
2. 3G adoption : 60 million users
3. Critical mass of mobile advertising : 50% of users, 300M$
4. Mobile video usage is emerging

1. Social networks in Japan growing to 2-3 million mobile users
Online social networks membership exceeds 7 million and expected to grow to 10 million in 2007 [Japanese Ministry of Internal Affairs and Communications]. Some examples of online services going mobile described below :
- Mixi has 4.8 million users, 70% logged every 3 days, 1 million groups and and 7 billion page views /month, 3rd behind Yahoo and Google (July 2006). Mixi mobile was released in December 2006 and forecasted to reach 2 million subscribers. Mixi name refers to mixing with other, it is an invite-only network with product reviews, blogging, photo sharing, and music clone that lets you buy tracks from iTunes.. Demographics estimated 15% 17-19 (18 minimal age) and 70% 10-29. The company was founded by Kenji Kasahara, revenues around 9 million $ and IPO forecast above 1 billion$.
- S! Town on Softbank is designed like a mobile 3D virtual world where avatars walks around, chats, shares photos, shops for music and video, personalizes a room, plays games. eXplo community platform from Gemini has been adopted by SoftBank Mobile in Japan; SmarTone-Vodafone in Hong Kong; FarEasTone in Taiwan; Nextel International in Central & South America; and Sferia in Poland. Gemini was founded in 2001 by Hiroshi Ota, Michael Tso and Scott Driggers, Gemini and over 20 million $ in two rounds, it is profitable. Japanese game company Bandai did the S! design.
- http://www.gorotto.comfunctionality includes a blog, networking, personal profile, picture/media library, calendar and newsgroups. It has a mobile version, a GIS/Google maps mash-up feature, an open architecture for integration of other services. Registered users can invite contacts.
- Love-Getty . This service was deployed in 1998 and used by 1.3 million users. I list it as a comparison point and an interesting case study. Love Getty was an oval device on a key-chain programmed the to look for others in the same mode. There were 2 sexes boys and girls looking out for each other; and 3 modes : karaoke, chat and meal. A girl’s Love Getty on karaoke mode would sound when another boy’s karaoke Love Getty was around. The inventor was Takeya Takafuji currently president senior associate of IMJ Mobile. My HP colleague Nicolas Raguideau worked on that project at the time to implement a real-time database using HP OpenCall technology.

2. 3G adoption >50 million and 40% penetration by 2007
Mid-year statistics :
. DoCoMo 30 million subscribers (WCDMA)
. Softbank 5 million subscribers (WCDMA)
. KDDI 10 million subscribers (CDMA 1XRTT)
ARPU statistics : 70 $, 65% non-voice




3. Mobile advertising reaching 60% of users with revenues of 250 million $ In 2005-2006, revenues grew 50%, from 250 million $ to forecasted 300 million US$ in 2009 (or >5$ per subscriber, on operators portals only) . This amount is similar to that of internet advertising revenues in 2000, they grew to 2 billion $ in 2006. The penetration of mobile advertising is estimated at 60 % (InfoPlant survey on usage of mobile coupons and discounts : 2-3/month 27%; 1/month 25%;1/2-3 months 20%). One of leading mobile advertising agencies is D2 Communications, jointly established in 2000 by NTT DoCoMo, Dentsu and NTT Advertising for the DoCoMo i-mode service (Takayuki Hoshuyama, COO).

4. Usage of video messaging is 9%
According to Mobile marketing association the mobile usage is
Mobile internet 76%
Picture messaging 42%
Text messaging 39%
Digital music 16%
IM 15%
Video messaging 9% (this is low but probably 3 times above usage in Europe).
Mobile TV 4.4%

HP Communications World, Vienna, December 12 2006

 3G video services from HP
The theme of the conference being imagine the future and make it happen. So, I thought of a future 3 years from now, when 50% of the users have a much easier time. This future is the result of telecom evolution : in the 80's when we invented the PC and the mobile phone as a personal productivity tool - we had e-mail and a phone book. In the 90's where we got the web, every body had the phone and used SMS. And the waves of 2000 are evidently about communities and multimedia. So in 2010 there will be 800 million 3G multimedia phones WW, mostly in Asia and 100 million in Europe.

Blue Ocean Strategy
I used 3 recommendations from the book :
1. Create and capture new demand : create new 3G video user experiences combining elements from content discovery, personal messaging, marketing and branding, on-line connectivity.
2. Make the competition irrelevant : optimizing the value delivery chain, especially by attracting content creators, media industry, Web 2.0 developers and addressing separately the tasks of merchandizing and operating networks
3. Align the whole company in the pursuit of differentiation : allow permanent innovation by providing web tools to designers, a video studio in the network.

 BBC’s 3G video for participation TV
Chris Yanda, Executive Producer at BBC Mobile presented some projects :
- Olympics 2004 : video highlights trial partnering with Orange and O2, 2500 video downloads and 2.01 million page impressions
- Grand National 2005 : Live Video Streaming to mobile
Doctor Who Tardisodes Spring 2006 : thirteen 60 second mini episodes about next episode characters and adventures
- SpringWatch 2006 : Live WAP cam, streams of animals in the wild
- BT Movio : broadcast digital TV trial using DAB-IP

BBC match of the day
 

The presenter trails topical question inviting 3G video messaging commentary from fans. Comments shown on air. Users record video message on a 3G phone by dialing a short code and send it to the program.
BBC findings

The response is immediate
You need to tell people about it
Ask good questions
People like to be on TV
Keep it simple

Telecom World, Hong Kong, December 4-8 2006

 ITU TW is moving
This year the show landed in Hong-Kong but with a low attendance. The next edition comes back in my hometown in Geneva. Our HP team was there to present the alfa-version of our Instant Communication solution over an IMS networks.
 TD-SCDMA starts slowly
I went to the anticipated press announcement of 3G trials with China Mobile, China Netcom, China Telecom with 10,000 users., Datang announced trials in Hong Kong, and ZTE in Romania. Alcatel Shanghai Bell confirmed their collaboration with Datang Mobile, and in parallel to ZTE released TD-SDMA supporting HSDPA. By 2008, TD-SCDMA will support the same 3GPP's evolution roadmap as W-CDMA. In the short term the terminal supply may be limited.
 PCCW 3G Video
PCCW mobile demonstrated their Easy Watch 3G video monitoring service. Unique pan-tilt and zoom functions give more control than usual fixed services. Video-calls are charged $1-2/min for on/off-net calls. PCCW also offers a video conferencing services. In parallel PCCW has a DVB-H trial with Motorola.
 Video devices
Huawei demonstrated video with the Viewpoint familly. A number of 3G-TDSCDMA video devices were also anounced.

Orange partner's Camp, Cadiz, October 2006

 Orange network evolution to 3.75G
3G video content is a success :
Orange TV has 40 K active subscribers to 50 linear channels (news, video dramas,…) usage reaching 5 million mobile video sessions. The Prosumers (producers and consumers) will have a strong impact on the business models.
 (A refresher for my HP colleague Lam Nguyen who teaches at ENST)
2G = GPRS : 20kb/s-300kbps 120-700ms-120ms latency, 300ms-10s jitter,
2.75G = EDGE : 384kbps-1000kbps
3G = WCDMA 386kbps 175ms-250ms latency, 50ms jitter
3.5G = HSDPA 1.8 Mb/s (2006)- 3.6Mb/s (some countries) 120ms (down to 20ms) latency.
3.75G = HSUPA (in 2008) 1.2 -5.8 Mb/s
 Social networks (Galina Guyot, another HP collague kept her good smile during parties, despites rainy days in Spain).

Brands and recommendations are key in word-of-mouth marketing. Power is moving from institutions to communities, to social leaders, trendsetters. David Nahimini, Orange

Social Networks
[month/month retention rate; Nielsen May 2006]
67% Myspace (120 M users)
57% MSN groups
51% Facebook (12M users)
49% Xanga
47% MSN space

Top on-line brands
[audience, usage/month]
105M Yahoo! 3:00
95M Myspace 0:45
92M MSN 1:38
92M Google 0:52
70M AOl 6:11
53M Ebay 1:53
40M Mapquest 0:10
38M Realnetworks 0:47
37M Amazon 0:19

Symbian S60 usage patterns, Nokia
Functions
35%,messaging
22% voice calls,
16% multimedia,
14%PIM
3% configuration,
3% browsing
2% games,

Usage of applications
64% have 1 application
23% have 5 add-ons

36% games,
25% utilities,
16% multimedia,
9% messaging,
5% browsing,
3% productivity,
3% PIM,
2% infotainment

Presentation at Mobile Monday Global Summit, 8-9 May 2006, Helsinki

I attended MoMo Global Summit
and presented some ideas about fun mobile video services.

Anssi Vanjoki ,Nokia
In one of the pannels, he was a great advocate of mobile multimedia. He stressed simplicity of user experience and the user content generation :

"Everything is converging to the internet, it does not matter if we connect thru fiber, copper, vibrating air, broadband, whatever breadth of band. It is about simple services, personal content personal I created myself or I received from someone I am are related to. And this is why telephony was invented; to communicate messages from one to another, like with email, It is also about commercial content to inform, entertain, kick emotions. It's music content from LPs,CDs, MP3, digitized feelings delivered over any networks broadband.

There are many tools to create personal content and it does not matter wether it is blogs published on the web, or content agregated from RSS feeds. Theswe tools are all part of modern publishing environment, limited only by our mind's creativity. According to Technorati, a new blog is born every second. One thousand one, one thousand two... That’s more than 85,000 a day. one thousand six, one thousand seven... Or 600,000 a week, 2.6 million a month or 35.5 million a year. A blog for every man, woman and child in Canada. Or in Greece, Belgium and Portugal combined.

Fun mobile video services
The key points were of my presentations were :
1) the business opportunities from the convergence of video communications and content across technologies, platforms and industries (mobile and broadcast or music)
2) How 3G video can bring a new way to share emotions, feelings and participate to event. Deployments of mobile video in interactive television and community messaging with HP and Voxsurf.ww.voxsurf.com
3) The experienced and what we observed at this early stage in a 4 domains :
. Mobile music and video : how 3G video supports the launch of new albums or tours, and strengthen fan clubs; success of 3G video in TV shows.
. Football and mobile video : how new TV formats include live audience participation. How customized interactions allow delivery of personalised mobile TV content
. Video bloging and push to video adoption for inter-personal messaging in communities; use of dynamically animated interfaces to create recurrent appeal.. Consumer marketing using 3G video outbound call campaigns



vpod.tv
I was very impressed by the founders of vpod.tv who were shortlisted for the MoMO award. Rodrigo Sepulveda Schulz,is the CEO of vpod.tv and mostly a dedicated vlogger evangelist. Ivan Communod, is the COO and could have been a colleague while at Digital/HP in Geneva a few years ago. They are really a great bund and it is great to see European companies succeeding in the blogosphere. Rodrigo was kind to post a part of my presentation on his blog

And you will find their great demo on my own video.

VON, Stockholm, May 2006

VON Europe Spring 2006, Session 362 : It's all about Apps, Stockholm 18 May 2006, chaired by Christine Perey, PEREY Research & Consulting
One debate topic at the VON Sessions was the IMS (the bad) versus the Web (the good) . We were tasked to take the neutral application view on this. The pannel took 4 point of views :

Impacts on service providers
On-line service providers and ASPs are better placed than the network providers because services are at the edge, economics to manage service launches with few subscribers and no regulations. But the service provider mission can evolve : they can monetize the knowledge gained from access to existing user base, market bundles of mobile data and services with highest cost efficiency and open their networks to business partners. The Open vs. Walled Gardens debate is about trade-offs but all open markets ultimately win.

Open service development infrastructure
Web 2.0 and SOA technologies supported by application servers at the edge are proven. On the other hand the MNOs closed-garden have protected subscriber authentication and are resulting from 15 years of re-regulations on licensed spectrum. In that context IMS can be implemented as an in-between infrastructure that keeps some of closed subscriber management benefits while offering standard-based open IP interface to services that span multiple networks. For this APIs to IMS networks and devices should be made available to web developers, beyond SIP.

Applications from convergence
What are the services, after 10 years of VoIP? Is it only about migrating old voice/text services to cheaper IP infrastructures (IP Centrex/PBX, SMS/IM). The focus on IMS/CSCF and IMS/MRF/GW is a narrow view on the past. Rather we should we enable really new services, like mobile video, content sharing , group communications etc..

Identity management
With new services, the focus is moving from media transport to added-value with identity management including presence, group/buddy lists, location, authentication. How to integrate overlapping systems and privacy. In that context IMS/HSS becomes a useful component.. Who should be the ID service provider ? .


I contributed the following slides to the debate. Taking the view of 3G video services I found that we could use both Web service creation and some IMS/MRF streaming infrastructures.



The VON experience is also to get to meet up with old friends such as Christer Granberg and Dominique Sjögren formerly at Pipebeach and now with HP. However I failed to sense the excitement of some previous VON Europe events.

CTIA, Las Vegas, April 2006

 Conversa video service
One featured demo was Conversa, a mobile video conversation system created by HP Labs (Susie Wee, similing is the lab director) and HP OpenCall software. The system is designed for use with 3G mobile videophone handsets or with a client for Microsoft Windows Mobile 5.0 smartphones. It’s a hybrid of a Web 2.0 web site and 3G streaming mobile video service where users  can browse conversations and record responses from any phone or PC. The web site has typical RSS video podcast support, video playback in a web browser, and an open HTTP API to support developers.
Conversations with the HP Labs team are time well spent : April Slayden Mitchell, Alex Vorbau (blog), John Apostolopoulos is enriching. Check their paper from ACM's Computer Human Interaction (CHI) proceedings: Consuming video on mobile devices
 OpenCall Media Platform
HP introduced a version of OCMP for IMS, keeping the Java and VXML APIs. It can really bridge Web 2.0 open service creation approaches with IMS service control infrastructure. (Left : my colleagues and Wade Haynes and Joe Crispo are looking at an ATCA implementation of OCMP MRF).
 H.264 adoption
The NVIDIA® GoForce graphics processing units that can power mobile phones such as Motorola C, MOTORAZR V, Samsung, Sony Ericsson W900 etc,… They are supporting H.264/MPEG-4 QVGA encoding/decoding at 30 fps. A competitor is TI's OMAP chip driving two display (one for mobile TV and one for telephony control). [TI's estimate is 20% penetration of videophones]. OpenCall SoftDSP performs similar video processing on Intel and AMD processors.
 
IP video phones
There were a number of demos featuring fixed/mobile video calls. Here the devices from Samsung. Huawei has the Viewpoint 8x IP video phones. IP Unity was demonstrating their Mereon Video mail using IP video phones. The target are business customers but I don't know what the market reaction will be to these devices.

Millia-MipTV, Cannes, 3-7 April 2006

 
We shared a booth at Milia's first Mobile Village in Cannes with the team : Peter Vesterbacka (HP Bazaar junior conultant), Tomi Hietavuo (DJ) and Joonatan Henriksson.
 
We demonstrated personalized 3G video portals, our ideas for TV participation and organized a photo-blogging service with Shrek using those nice little bluetooth-enabled HP printers. We wanted to illustrate how personal communications can integrate user-generated or artist's video and pictures. And how this can interact with traditional TV formats.
Mobile TV is there
Our neighbours in the village focused on mobile content distribution. Nokia were presenting their DVB-H mobile video broadcasting receivers, Alcatel was showing it's platform for 3G Mobile TV, Ericsson offered consulting and products in the same field and finally Qualcom was anouncing MediaFlo. Within a few square meters, Milia visitors could explore all the emerging mobile video technologies from interactive unicasting to broadcasting on mobile. Milia/MipTV is a trade show for content, with over 12'000 professionals busy acquiring or selling next year's TV program [3 billion $ business during the show reported by Reed midem]. My estimate is that 1'000 of them found a few minutes in their busy schedule to look at what may change their business, impacting both audiences and advertising revenues.

3G video in California, March 2006

MobiTV
I visited MobiTV, Emeryville, CA (formerly Idetic). MobiTV is a mobile TV/Radio ASP prvoiding both content aggregation and managed technology to MNOs such as Sprint, Cingular, Alltel 3UK and Orange UK. We met the VP sales Kevin Grant and the CTO Kay Johansson. Their focus is content distribution but they see some value in user generated content or personal video communications if user acceptance develops. We discussed technologies such as H.324M (not deployed in North America) , DTMF-driven video navigation, expanding to community sharing services for photos/videos etc...The long term vision could evolve towards IMS/group applications offered as a managed service.

Verizon Wireless
I visited their 3G lab, Walnut Creek, CA at the invitation of 3G network planning Sergei Karpov who described the activities of VZW Advanced technology lab (the video specialists were out of town so another visit will be needed). They were running the CDMA 2000 EV-D0 Rev A trials (the capacities are 550Kbps uplink / 1.8Mbps uplink, low latency all IP - the wireless profiles are described in IS-835D-C) to prepare roll-out in 2007. The services include video telephony, video instant messaging, push to talk/video and streaming (evolution of VCAST). Trial handsets likely to include Audivox, Motorola, LG, Samsung with (H.263 / EVRC - EBRCb - EVRC-wb codecs, Brew IM clients needed). We also discussed the success of Amp'd Mobile, Los Angeles CA, who is an MVNO on VZW EV-DO aimed at 18-35 year olds wth services featuring video. They work with Break.com, a viral video web site. AMP'D investors include, MTV, Universal Music, and other VCs, rumored to be in the region of $120 million. Amp’d . They sell 3 handsets from Motorola and Kyocera (MPEG4-VGA video).

Tokyo, January 2006

 
My HP colleagues Hatnaka-san and Tsugane-san were great hosts during this visit to several operators, including Docomo, Japan telecom and NEC. We reviewed the evolution of 3G video and community services.
  At DoCoMo I asked their ideas about new services. My host answered with a smile that Japan had contributed so many ideas with their early 3G launch that instead he would now more interrested in hearing from me about our developments in Western Europe that could be transposed in Japan. I thought this was fair.
3G video take-up is slow
Most operators report that 3G personal video communications was slow. For instance video conferencing was disapointing. But content delivery is progressing well. And there is interrest for service-oriented applications, such as mobile dating and social networks between internet and mobile. My HP Japan colleagues have developped a demonstration with OpenCall softare showing video call to browse the web.