Tools of Change Keynote 2: Andrew Bud - Mobile Content and Commerce: A Global Commerce

In the second keynote session at the Frankfurt Tools of Change conference, Andrew Bud from MEF - the global community for mobile content and commerce - presented early results of their global research.

It is a study of 10,000 mobile media users across ten countries - they tend to be mobile first economies - providing insight into the state of the market and how it is evolving. What makes mobile special?

• Consumer's relationship to device
• Ability to engage the consumer
• 100% payment reach
• Multiple, fragmented centres of commercial power
• Technical fragmentation and constant change

The consumer relationship is key: the mobile is always there, is instantly accessible for immediate gratification. It's becoming the first screen due to it's immediacy and personal and that is becoming the case everywhere.

When consuming content on the phone, there is a significant long tail of genres catering for different segments of the market. Games are primary form of content with 59%. They are followed by social networks (49%), music (47%),  photos (41%), news (31%),  weather (25%), sport (21%), navigation (20%) and books are further down the ranking (17%).

The mobile is the ultimate engagement engine. It has the ability to drive the cycle - through SMS and push. It has known content using location, network and behaviour. There are accessible calls to action such as opening an app and you are only three clicks from desire to purchase: a feature that has driven the $30bn mobile content market.

88% of mobile media users are now using mobile commerce and it is ubiquitous in the first mobile markets. The reason? Proximity, convenience and immediacy of having that particular device so you can go from desire to gratification in the shortest possible time.

Mobile carrier billing provides a retailer with the ability to charge consumer up to c.$15 immediately without any needing verification. The price is steep - mobile operators in the value chain take 20-30% in charges - but it helps establish new retail channels.

There are multiple and fragmented shifting centres of power:

1. mobile operators (banks coming in to this)
2. handset vendors (social networks)
3. O/S controllers
4. online retailers (local providers)

Purchase location is shifting, consumers no longer buy via mobile web, but from places and brands they know and trust including 29% from app stores, 27% in app/game purchase, 26% on the mobile web and increasingly retailer mobile storefront (15%).

Technical fragmentation is key. Not all smartphones are equal. What is also interesting to note, despite the lower use of books on mobile, the kind of people who buy smartphones are the type of people who are likely to buy books.

Mobile is fast becoming the central ecosystem for digital content everywhere. There are opportunities to create new retail channels, powered by engagement and mobile billing, powered by its fluidity. Books are a small part of what is happening on mobile media and the mobile ecosystem is a small part of books today, but that is temporary and presents a big opportunity.

Tools of Change Frankfurt Key Note 1: Jo Henry on Consumer eBook Monitor Data

The (ebook) world according to Bowker

For the first session at Tools of Change conference on the eve of the Frankfurt Book Fair, Jo Henry from Bowker presented an overview of their Consumer eBook Monitor data.

Who are downloading ebooks? In general, they are male and a third to a half are under 35. The majority live in urban/surburban areas and half to three quarters are in work. A third have a degree (although this rises to 90% in India).

Future trends include i) moving towards more even male/female split; ii) becoming older with more 35+ in most markets; and iii) increasingly suburban. India is a massive market however the US is still the biggest market. There is a long tail across to New Zealand, with a small population and low growth.

Other interesting trends include:

• engagement in ebooks is not slowing print purchases
• heavy book buyers are usually promiscuous and buy/borrow from all channels
• 10% of people who were not buying print books are buying ebooks

What is the role of free in the digital world? Free is driving engagement with paid digital content. If you are a free downloader you are two and a half times more likely to buy print while still downloading, unless you are in India or South Africa. In this survey they also asked about piracy. India and Canada are low in the 'never would download illegally'. Some consumers are conflicted and might consider downloading illegally if they couldn't get a legitimate copy.

Where there is a young market, the device most used for e-reading is a PC. The markets who've adopted e-reading devices most enthusiastically are Canada and the UK. There is also a significant number who read using mobile. Amazon has the strongest market share in the UK, US and New Zealand while Canada have a higher proportion from Kobo.

Attitudes to pricing are fairly consistent: consumers say they should be cheaper than print books. In most markets they think the ebook should be 50% of hardback and c.70% of paperback for adult fiction except in India where value is perceived to be more than print. For debut author prices need to be cheaper.

She concluded with the following observations:

• growth rates are fast - particularly in emerging markets
• engagement with ebooks doesn't always reduce print spend
• free is driving the ebook market
• the biggest players don't always dominate the market
• 'E' is regarded as less valuable than 'P'.