PODCAST: FoneStarz Talks Business Models, Monetization & Mobile Search; But Where’s The Real Money?
In-Brief: FoneStarz, a leading provider of licensing, hosting and management of image content for mobile is on a roll, It counts 130 major content brands (Disney, Turner, Warner Bros.) and major mobile operators (Vodafone, T-Mobile, 3) among its clients, and recently launched a D2C destination called kazzip. However, with strong IP in both search and recommendation engines, FoneStarz also covers the bases to cross over into some exciting new territory. Will the company “plug in” with search giants? Dave Moreau, FoneStarz CEO, gives us his perspective on the content space and where his company fits it.
From our first meeting at a mobile content panel I chaired I recognized Dave was more than an industry practitioner with valuable industry insights to share; he is a fair critic with firm views we should consider carefully. With this in mind I contacted Dave for a podcast to discuss the current state of the content industry, the content-selling value chain, mobile search and (in his own words) the “cut throat old business using Google AdWords to try and get people onto your site.”
In addition, Dave let me in on his own mobile search ambitions and impressive results since creating and implementing his own recommendation engine. A simple content-to-content recommender added a whopping 12 percent to sales (!) (Suggesting content based on peer preferences is a way away for FoneStarz, but this “simple and remarkably effective feature” has more than paid off.)
Listen to the podcast here. [11:00]
Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.
By way of background, FoneStarz have evolved from a media company to a mobile service specialized in image-based download services (image, video, animation, infotainment) managing content across 25 networks in 22 countries. The company, which sees itself as a content retailer, handles the licensing, aggregation, distribution and real time management of mobile content.
FoneStarz at a glance:
- • licenses and aggregates content from over 130 companies – including many globally recognized brands;
- • specializes in personalization products, mobile entertainment and information services;
- • has a global relationship with Vodafone and works extensively with other mobile operators including T-Mobile and 3;
- • hosts, manages and publishes multiple content formats for over 2,300 different handset types;
- • analyses real-time usage data to help drive revenue from content sales and advertising by maximizing traffic on its sites;
Traditionally, FoneStarz does the heavy-lifting for content providers/brands and mobile operators. However, the rise of off-portal and the rousing success of FoneStarz’ own D2C offer, kazzip, creates a new dynamic: “Some of the new operators that we’re talking to [who are interested in the WAP portal] are thinking about moving from solely on-portal models to a sort of hybrid on- and off-portal [approach].
STATS & CHALLENGES: On-portal (across the sites managed worldwide) FoneStarz sees “around 500,000 downloads a month” of wallpapers, animations and videos. “That’s from about a million unique visitors and we generate around 50 million page impressions on all our sites. That obviously plays into a very interesting advertising play as more and more operators look to put ad banners, sell ad banners on those pages.” On the D2C destination kazzip, Dave sees a “steady conversion of between 25 and 50 percent of people, who come onto our site every day, buy something. The average purchase is 1.5 pieces of content, so it’s a great business model.” But it has its challenges. “Basically, if people give us the traffic or we find the traffic, we can convert them into customers. But, buying the customers off-portal at the moment is very difficult. It’s a cut throat old business using Google AdWords to try and get people onto your site. There really isn’t much of a future in that.” The real revenues come when content off-portal can be more easily discovered. Make it a no-brainier and customer volume will increase as well.
MOBILE SEARCH: Is it the silver-bullet solution? Maybe – but right now it’s more like work in progress. Dave gives high marks to Google and Yahoo, but adds they aren’t there yet. “Unfortunately, the basic mobile search products that are out there off-portal tend to give and be dominated by Web results. So, we have the unfortunate situation where you get the people [content companies] paying on Ad Words or the equivalent products to get the three sponsored links that do appear on the page, and that’s cut throat. But apart from that, you’re then very quickly dropping down into just standard Web pages. They are either not transcoded at all for the mobile or very poorly transcoded, and it’s just an awful experience.”
MOBILE ADVERTISING: It’s early days for banner ads. However, a few sites have launched them and the results are encouraging. “We’re seeing a pretty good uptake on the banner ads. There’s around a 3.5 percent click-thru rate … that is quite good in terms of what the market was expecting.”
PERSONALIZATION: “What we don’t do yet – [although] we could – is target individuals or males versus females with different portal design. We do allow people to customize the portal themselves, so that we retain the user agent….But I think the most important piece of the data for us is actually knowing what the general user behavior and the conversion rates are at different times of the day so that we can actually improve the results for everybody.”
VERTICAL SEARCH AMBITIONS: “If the statistics are true and 25 percent of all mobile search terms – in one way or the other – are content based, then any search company that properly integrates content companies into their search products so that users who are looking can find content that they like and that is appropriate, then that’s going to be (A) a huge step forward for the industry and (B) a huge winner both for the content companies and for the search firm.” Sensing a business opportunity FoneStarz has developed it own search engine (based on its own IP) that lets uses search all the content on its WAP site, for example. “But we are working with the big search companies to plug in our content.” Such cooperation would boost the ability of Google & Co to deliver mobile content results rather than Web pages.
Will FoneStarz become a vertical mobile search provider for indexed image-related mobile content? It’s on the radar. As Dave put it: “It’s quite possible that we will try to plug in a vertical search product into other places because it’s another way of funneling traffic through.”
