Internet business model

Business models are perhaps the most discussed and least understood aspect of the web. There is so much talk about how the web changes traditional business models. But there is little clear-cut evidence of exactly what this means.In the most basic sense, a business model is the method of doing business by which a company can sustain itself — that is, generate revenue. The business model spells-out how a company makes money by specifying where it is positioned in the value chain.

Some models are quite simple. A company produces a good or service and sells it to customers. If all goes well, the revenues from sales exceed the cost of operation and the company realizes a profit. Other models can be more intricately woven. Broadcasting is a good example. Radio and later television programming has been broadcasted over the airwaves free to anyone with a receiver for much of the past century. The broadcaster is part of a complex network of distributors, content creators, advertisers (and their agencies), and listeners or viewers. Who makes money and how much is not always clear at the outset. The bottom line depends on many competing factors.

Internet commerce will give rise to new kinds of business models. That much is certain. But the web is also likely to reinvent tried-and-true models. Auctions are a perfect example. One of the oldest forms of brokering, auctions have been widely used throughout the world to set prices for such items as agricultural commodities, financial instruments, and unique items like fine art and antiquities. The Web has popularized the auction model and broadened its applicability to a wide array of goods and services.

Business models have been defined and categorized in many different ways. This is one attempt to present a comprehensive and cogent taxonomy of business models observable on the web. The proposed taxonomy is not meant to be exhaustive or definitive. Internet business models continue to evolve. New and interesting variations can be expected in the future.

The basic categories of business models discussed in the table below include:

• Brokerage
• Advertising
• Infomediary
• Merchant
• Manufacturer (Direct)
• Affiliate
• Community
• Subscription
• Utility

The models are implemented in a variety of ways, as described below with examples. Moreover, a firm may combine several different models as part of its overall Internet business strategy. For example, it is not uncommon for content driven businesses to blend advertising with a subscription model.

Business models have taken on greater importance recently as a form of intellectual property that can be protected with a patent. Indeed, business models (or more broadly speaking, “business methods”) have fallen increasingly within the realm of patent law. A number of business method patents relevant to e-commerce have been granted. But what is new and novel as a business model is not always clear. Some of the more noteworthy patents may be challenged in the courts.

Type of Model: Description: Brokerage Model Brokers are market-makers: they bring buyers and sellers together and facilitate transactions. Brokers play a frequent role in business-to-business (B2B), business-to-consumer (B2C), or consumer-to-consumer (C2C) markets. Usually a broker charges a fee or commission for each transaction it enables. The formula for fees can vary. Brokerage models include:Marketplace Exchange — offers a full range of services covering the transaction process, from market assessment to negotiation and fulfillment. Exchanges operate independently or are backed by an industry consortium. [Orbitz, ChemConnect] Buy/Sell Fulfillment — takes customer orders to buy or sell a product or service, including terms like price and delivery. [CarsDirect, Respond.com] Demand Collection System — the patented “name-your-price” model pioneered by Priceline.com. Prospective buyer makes a final (binding) bid for a specified good or service, and the broker arranges fulfillment. [Priceline.com] Auction Broker — conducts auctions for sellers (individuals or merchants). Broker charges the seller a listing fee and commission scaled with the value of the transaction. Auctions vary widely in terms of the offering and bidding rules. [eBay] Transaction Broker — provides a third-party payment mechanism for buyers and sellers to settle a transaction. [PayPal, Escrow.com] Distributor — is a catalog operation that connects a large number of product manufacturers with volume and retail buyers. Broker facilitates business transactions between franchised distributors and their trading partners. Search Agent — a software agent or “robot” used to search-out the price and availability for a good or service specified by the buyer, or to locate hard to find information. Virtual Marketplace — or virtual mall, a hosting service for online merchants that charges setup, monthly listing, and/or transaction fees. May also provide automated transaction and relationship marketing services. [zShops and Merchant Services at Amazon.com] return to top Advertising Model The web advertising model is an extension of the traditional media broadcast model. The broadcaster, in this case, a web site, provides content (usually, but not necessarily, for free) and services (like email, IM, blogs) mixed with advertising messages in the form of banner ads. The banner ads may be the major or sole source of revenue for the broadcaster. The broadcaster may be a content creator or a distributor of content created elsewhere. The advertising model works best when the volume of viewer traffic is large or highly specialized.Portal — usually a search engine that may include varied content or services. A high volume of user traffic makes advertising profitable and permits further diversification of site services. A personalized portal allows customization of the interface and content to the user. A niche portal cultivates a well-defined user demographic. [Yahoo!] Classifieds — list items for sale or wanted for purchase. Listing fees are common, but there also may be a membership fee. [Monster.com, Craigslist, Match.com] User Registration — content-based sites that are free to access but require users to register and provide demographic data. Registration allows inter-session tracking of user surfing habits and thereby generates data of potential value in targeted advertising campaigns. [NYTimes Digital] Query-based Paid Placement — sells favorable link positioning (i.e., sponsored links) or advertising keyed to particular search terms in a user query, such as Overture’s trademark “pay-for-performance” model. [Google, Overture] Contextual Advertising / Behavioral Marketing — freeware developers who bundle adware with their product. For example, a browser extension that automates authentication and form fill-ins, also delivers advertising links or pop-ups as the user surfs the web. Contextual advertisers can sell targeted advertising based on an individual user’s surfing activity. [Claria] Content-Targeted Advertising — pioneered by Google, it extends the precision of search advertising to the rest of the web. Google identifies the meaning of a web page and then automatically delivers relevant ads when a user visits that page. [Google] Intromercials — animated full-screen ads placed at the entry of a site before a user reaches the intended content. [CBS MarketWatch] Ultramercials — interactive online ads that require the user to respond intermittently in order to wade through the message before reaching the intended content. [Salon in cooperation with Mercedes-Benz] return to top Infomediary Model Data about consumers and their consumption habits are valuable, especially when that information is carefully analyzed and used to target marketing campaigns. Independently collected data about producers and their products are useful to consumers when considering a purchase. Some firms function as infomediaries (information intermediaries) assisting buyers and/or sellers understand a given market. Advertising Networks — feed banner ads to a network of member sites, thereby enabling advertisers to deploy large marketing campaigns. Ad networks collect data about web users that can be used to analyze marketing effectiveness. [DoubleClick] Audience Measurement Services — online audience market research agencies. [Nielsen//Netratings] Incentive Marketing — customer loyalty program that provides incentives to customers such as redeemable points or coupons for making purchases from associated retailers. Data collected about users is sold for targeted advertising. [Coolsavings] Metamediary — facilitates transactions between buyer and sellers by providing comprehensive information and ancillary services, without being involved in the actual exchange of goods or services between the parties. [Edmunds] return to top Merchant Model Wholesalers and retailers of goods and services. Sales may be made based on list prices or through auction. Virtual Merchant –or e-tailer, is a retail merchant that operates solely over the web. [Amazon.com] Catalog Merchant — mail-order business with a web-based catalog. Combines mail, telephone and online ordering. [Lands' End] Click and Mortar — traditional brick-and-mortar retail establishment with web storefront. [Barnes & Noble] Bit Vendor — a merchant that deals strictly in digital products and services and, in its purest form, conducts both sales and distribution over the web. [Apple iTunes Music Store] return to top Manufacturer (Direct) Model The manufacturer or “direct model”, it is predicated on the power of the web to allow a manufacturer (i.e., a company that creates a product or service) to reach buyers directly and thereby compress the distribution channel. The manufacturer model can be based on efficiency, improved customer service, and a better understanding of customer preferences. [Dell Computer] Purchase — the sale of a product in which the right of ownership is transferred to the buyer. Lease — in exchange for a rental fee, the buyer receives the right to use the product under a “terms of use” agreement. The product is returned to the seller upon expiration or default of the lease agreement. One type of agreement may include a right of purchase upon expiration of the lease. License — the sale of a product that involves only the transfer of usage rights to the buyer, in accordance with a “terms of use” agreement. Ownership rights remain with the manufacturer (e.g., with software licensing). Brand Integrated Content — in contrast to the sponsored-content approach (i.e., the advertising model), brand-integrated content is created by the manufacturer itself for the sole basis of product placement. [bmwfilms]. return to top Affiliate Model In contrast to the generalized portal, which seeks to drive a high volume of traffic to one site, the affiliate model, provides purchase opportunities wherever people may be surfing. It does this by offering financial incentives (in the form of a percentage of revenue) to affiliated partner sites. The affiliates provide purchase-point click-through to the merchant. It is a pay-for-performance model — if an affiliate does not generate sales, it represents no cost to the merchant. The affiliate model is inherently well-suited to the web, which explains its popularity. Variations include, banner exchange, pay-per-click, and revenue sharing programs. [Barnes & Noble, Amazon.com]Banner Exchange — trades banner placement among a network of affiliated sites. Pay-per-click — site that pays affiliates for a user click-through. Revenue Sharing — offers a percent-of-sale commission based on a user click-through in which the user subsequently purchases a product. return to top Community Model The viability of the community model is based on user loyalty. Users have a high investment in both time and emotion. Revenue can be based on the sale of ancillary products and services or voluntary contributions; or revenue may be tied to contextual advertising and subscriptions for premium services. The Internet is inherently suited to community business models and today this is one of the more fertile areas of development, as seen in rise of social networking.Open Source — software developed collaboratively by a global community of programmers who share code openly. Instead of licensing code for a fee, open source relies on revenue generated from related services like systems integration, product support, tutorials and user documentation. [Red Hat] Open Content — openly accessible content developed collaboratively by a global community of contributors who work voluntarily. [Wikipedia] Public Broadcasting — user-supported model used by not-for-profit radio and television broadcasting extended to the web. A community of users support the site through voluntary donations. [The Classical Station (WCPE.org)] Social Networking Services — sites that provide individuals with the ability to connect to other individuals along a defined common interest (professional, hobby, romance). Social networking services can provide opportunities for contextual advertising and subscriptions for premium services. [Flickr, Friendster, Orkut] return to top Subscription Model Users are charged a periodic — daily, monthly or annual — fee to subscribe to a service. It is not uncommon for sites to combine free content with “premium” (i.e., subscriber- or member-only) content. Subscription fees are incurred irrespective of actual usage rates. Subscription and advertising models are frequently combined. Content Services — provide text, audio, or video content to users who subscribe for a fee to gain access to the service. [Listen.com, Netflix] Person-to-Person Networking Services — are conduits for the distribution of user-submitted information, such as individuals searching for former schoolmates. [Classmates] Trust Services — come in the form of membership associations that abide by an explicit code of conduct, and in which members pay a subscription fee. [Truste] Internet Services Providers — offer network connectivity and related services on a monthly subscription. [America Online] return to top Utility Model The utility or “on-demand” model is based on metering usage, or a “pay as you go” approach. Unlike subscriber services, metered services are based on actual usage rates. Traditionally, metering has been used for essential services (e.g., electricity water, long-distance telephone services). Internet service providers (ISPs) in some parts of the world operate as utilities, charging customers for connection minutes, as opposed to the subscriber model common in the U.S. [IBM]Metered Usage — measures and bills users based on actual usage of a service. Metered Subscriptions — allows subscribers to purchase access to content in metered portions (e.g., numbers of pages viewed). [Slashdot] return to top

About the author: Michael Rappa is the Alan T. Dickson Distinguished University Professor of Technology Management at North Carolina State University in Raleigh, North Carolina.

China Mobile’s WVAS vision

China Mobile’s WVAS Vision

On August 18, China Mobile held a meeting with 20 of its leading SPs and several handset markers to discuss its future plans for Wireless Value Added Services (WVAS). The meeting succeeds the regulations China Mobile issued to SPs in July including the double-confirmation policy. The purpose of the meeting was to introduce new services and discuss strategic changes for WVAS, as the company endeavors to keep revenues up amid the unfavorable regulations. Mobile music, mobile video, mobile games, mobile IM, 2D barcode, mobile search and mobile blog have all been tagged as key applications for China Mobile as the company embarks on the 3G era. China Mobile also announced that it intends to work more closely with handset vendors and content providers to gain better control over the WVAS value chain.

Mobile Music and Video as Core Services

China Mobile has identified mobile music and mobile video as its 3G core services.  Given its ability to demonstrate substantially higher revenues than mobile video, mobile music is China Mobile’s highest priority WVAS this year.

Color Ring-Back Tone (CRBT), currently China Mobile’s greatest mobile music driver, has become one of the biggest revenue sources in terms of the company’s non-SMS data business.  CRBT revenue was RMB 2.6 billion (USD 325 million) in 1H 2006, accounting for 10.9% of China Mobile’s total WVAS revenues.  CRBT users rocketed to 128.4 million by June 2006, up from 57.9 million in June 2005.  Mobile music is also an important content source for other applications such as WAP and IVR.  As demonstrated by successful application in the 3G markets of Japan and South Korea, mobile music will become increasingly crucial for mobile operators as applications such as full-track music downloads are enabled in China.[...]

Mobile Games

China Mobile’s mobile game business has yet to achieve growth momentum because of limited user interaction and poor marketing.  China Mobile plans to create a game community channel under its mobile Java portal Baibaoxiang.  The operator will enable users of the game community channel to purchase items like avatars using virtual money. [...]

Mobile IM

China Mobile recently began trials for ‘Femoo’, its IM solution developed jointly with Huawei.  China Mobile aims to dominate the mobile IM market by integrating other WVAS applications into its IM platform.  The company is requiring handset makers to replace other SPs’ mobile IM software such as MSN and Tencent’s QQ with Femoo IM in their customized handsets.[...]

2D Barcode

China Mobile launched 2D barcode trials in 9 provinces testing both Data Matrix (DM) code and Quick Response (QR) code technologies.  China Mobile is currently focused on promoting DM code services to propel its WAP and mobile marketing business, since DM codes are mainly used to tag WAP websites.  The operator currently markets DM codes exclusively through Beijing-based Gmedia, and directs their services towards corporate users such as advertisers and SPs.[...]

Control over Free WAP Portals

By the end of 2005, free WAP websites generated over 80% of China Mobile’s GPRS traffic, according to sources close to China Mobile.  Free WAP portals are building up their brand names as rivals of China Mobile’s Monternet portal.  In response, China Mobile is reinforcing its leading role in the WVAS value chain by cracking down on free WAP portals.[...]

China Mobile: More Dominant in 3G?

China Mobile is tightening control over its WVAS value chain, copying the walled-garden approach in Korea and building up the Monternet brand name in preparation for 3G.  The operator has issued a series of strict rules to SPs to reduce customer complaints and purge smaller SPs from the market.  China Mobile is also deploying its own new applications, including mobile IM and mobile search, as well as playing a dominant role in 2D barcode and mobile blog.  Closer cooperation between China Mobile and CPs on mobile video and mobile music services is intended to continue in exchange for the increased 50% revenue share that China Mobile will take for these services.   [...]

OMA DRM from Wikipedia

OMA DRM

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OMA DRM is a Digital Rights Management (DRM) system invented by the Open Mobile Alliance whose members represent the entire value chain, including mobile phone manufacturers (e.g. Nokia, Motorola, Samsung, Sony-Ericsson, BenQ-Siemens), mobile system manufacturers (e.g. Ericsson, Siemens, Openwave), operators (e.g. Vodafone, O2, Cingular, Deutsche Telekom, Orange) and IT companies (e.g. Microsoft, IBM, SUN). In order to ensure interoperability across all implementations the OMA provides in addition to the specifications also test tools for OMA DRM. The OMA DL DRM group is chaired by Jan van der Meer (Philips) and Willms Buhse (CoreMedia).

The scheme is implemented on many recent phones and is intended to be used by mobile content providers to add Digital Rights Management to their products. To this date two versions of OMA DRM have been released: OMA DRM 1.0 and OMA DRM 2.0.

• OMA DRM 1.0 – Started in November 2002 and approved in June 2004: Basic DRM standard without strong protection. Specifies three main methods: Forward Lock, Combined Delivery (combined rights object / media object), and Separate Delivery (separated rights object + encrypted media object). Forward lock prevents the user from forwarding content such as ringtones and wallpapers on their phone. The content can be distributed using e.g. HTTP or MMS.
• OMA DRM 2.0 – Started in July 2004 and approved in March 2006: Extension of the DRM 1.0 separate delivery mechanism. Each participating device in OMA DRM 2.0 has an individual DRM PKI certificate with a public key, and the corresponding private key. Each Rights Object (RO) is individually protected for one receiving device by encrypting it with the device public key. The RO in turn contains the key that is used to decrypt the media object. Delivery of Rights Objects requires a registration with the Rights Issuer (RI, the entitiy distributing Rights Objects). During this registration, the device certificate is usually validated against a device blacklist by means of an Online Certificate Status Protocol (OCSP) verification. Thus, devices known to be hacked can be excluded once they try to register with an RI and receive new ROs for content access.

[edit]

Implementations and Usage

OMA DRM 1.0 has been implemented in over 400 phone models. Many mobile operators (e.g. Vodafone, SFR, Turkcell, Vivo) use OMA DRM for their content services. The first OMA DRM 2.0 implementations in mobile phones were released early 2006 (e.g. the Nokia N91 and Sony Ericsson W850i). Software implementations for PC and PDA clients are also available. Most of the ringtones pre-installed on Nokia phones have implemented DRM.

OMA DRM providers include:

• NDS
• Beepscience
• CoreMedia DRM
• SafeNet
• Philips

[edit]

Symptoms

A ringtone that includes OMA DRM usually has a “.asp” file extension. This file could potentially be viewed before downloading the actual file as kind of a confirmation request on downloading data. However, with most of today’s implementations at this point it is usually too late for denial and the user would already have been billed for the ringtone. The file extension does not matter for Nokia phones, so it is possible that they may use an extension other than .asp.

On Nokia Series 40 phones an installed file with DRM will not have its “Send” option greyed out in its options menu. If the user attempts to send this via MMS a message “The file is copyright protected” will appear. A Bluetooth file transfer will fail if the user tries to extract the file using Bluetooth, yet the file will still appear as present and will still be deletable via Bluetooth.

[edit]

External links

• DRM 1.0 specification from www.openmobilealliance.org
• DRM 2.0 specification from www.openmobilealliance.org

A korean company’s P2P implementation using JXTA

PeerCom.

P2p Pineer in music world

This is a pioneer. Although their technology is still based on blue tooth, the business revenue model is very good and possible for impoementation.

Melodeo Unveils Peer-to-Peer Music Sharing Functionality; Users Can Now Pay for and Share Full-Track Downloads Legally and Securely from Mobile Phone to Mobile Phone

SEATTLE — Melodeo, Inc. today announced new peer-to-peer music sharing functionality with its Melodeo Mobile Music Solution. Available during the first quarter in Europe, mobile phone users will be able to securely send full tracks that they have purchased, from one mobile phone to another mobile phone via Bluetooth wireless technology. Melodeo, a Seattle-based company, provides music to wireless subscribers through its Mobile Music Solution. The Mobile Music Solution resides directly on the user’s wireless phone, allowing consumers to quickly and easily shop, preview, purchase/download over the air, and play and store full-length music tracks.

“We’re thrilled about Melodeo’s peer-to-peer functionality, because it is secure and all parties are compensated when music is shared. This makes it a huge win for artists, music publishers, record labels, operators and mobile phone users,” said Don Davidge, senior vice president, Melodeo. “We expect that as the service grows it will not only be a significant source of revenue for artists, publishers and labels, but will also bring music to new audiences. Ultimately, we anticipate that sending a song will soon be as common as sending a text message or making a call.”

Wireless Operator Support

Wireless operators are deploying Melodeo technology on their networks to offer their subscribers access to Melodeo’s extensive music library. With the service, consumers can easily purchase and download full-length songs directly from their handsets, over the air, to their wireless phone. Music tracks that have been downloaded via the carrier’s network can then be “super-distributed” via Bluetooth. Tracks sent via Bluetooth technology do not use the operator’s network bandwidth, and therefore represent a highly efficient distribution mechanism for digital music. Melodeo’s DRM solution fully protects the tracks in both download and peer-to-peer activities.

Many industry analysts see the mobile music market growing exponentially in the coming years. Jonathan Coham, analyst with the Radicati Group, believes that “wireless music delivery is the next logical step. For music labels and artists, the appeal of wireless music delivery is that DRM ensures they will be compensated for their work. Melodeo’s distribution model makes for a quick go-to-market strategy, which, combined with an innovative peer-to-peer approach, looks set to stimulate a strong level of interest in the industry.”

Using the Peer-to-Peer Feature

To use the peer-to-peer feature, users simply select a song from the play list of tracks on their mobile phone. They then send the full track to another user with a Melodeo-enabled mobile phone located within Bluetooth range. The song file, which is DRM protected, pops up on the recipient’s mobile phone and he or she can listen to a 30-second preview of the song. If the person likes it, he or she can easily choose to purchase it and the Melodeo server then sends a decryption key via the carrier’s network to unlock the song, and bill the purchase to the recipient’s account. The Melodeo peer-to-peer system will also be used to send music as a gift, with the charges billed to the sender’s account.

A sender who shares music with a friend may also be eligible to receive a reward from the operator after the friend purchases a certain number of tracks. For instance, after the friend purchases four songs, the user who recommended them or gifted them may be given a complimentary track of a song from the operator.

Quick, Easy-To-Use Solution

Melodeo’s Mobile Music Solution includes an extensive music catalog provided by Warner Music Group and other record labels. Finding songs or an artist in this catalog is easy with a patented “power-search” capability. With just a few keystrokes, users can quickly and easily access the music they want.

The Mobile Music Solution includes personalization of a user’s music catalog based on the user’s preferences. Intelligence capabilities enable the solution to discover an individual’s unique music preferences and offer customized recommendations to the subscriber.

Melodeo’s software incorporates the most advanced audio codec, aacPlus from Coding Technologies, which produces music files in the 500 to 750K range, significantly smaller than a typical MP3 file, in a solution that is downloaded, not streamed, saving valuable bandwidth. While phone memory varies by brand, users can expect to store roughly 75 to 125 tracks with 64MB of memory.

About Melodeo

Melodeo is entirely focused on the music mobile phone market. Melodeo, Inc. is a privately held company in Seattle, Washington, dedicated to creating software and services to bring music to mobile phones. The Melodeo Mobile Music Solution provides wireless operators and phone handset manufacturers the means to provide secure digital music to wireless subscribers in an easy-to-use, dynamic user interface. Recognizing the growing market for wireless content, Melodeo offers its easy-to-use distribution model that at the same time supports the Digital Rights Management initiative, securing artist and label compensation. For more information, visit the company’s website at http://www.melodeo.com, or send email to info@melodeo.com.

From business wire.

PeerBox P2P interface

PeerBox GUI.

Cascade Mobile P2p

Cascada Mobile now offers TAG referral distribution technology. Now this really isn’t P2P. They call it P2P because a user can use it to contact another user … but he has to go through their server.

Still, mobile P2P presents an interesting challenge due to the limited resources on a phone compared to a PC. Plus phones have different operating system and capabilities. Developers have to translate the display for each phone model. Designers either limit functionality so the app will work across a wide swath of phones, or more typically route the phone client into a server somewhere. This does the latter.

More on Cascada:

“Cascada Mobile, a provider of technology for peer-to-peer mobile content distribution, announced the Cascada TAG referral distribution technology. TAG provides mobile content publishers and developers with a solution to enable instantaneous referral of content between any mobile subscriber and their peers.

TAG works by providing publishers and developers with an API that is embedded into any J2ME game or application. Once a subscriber purchases and downloads the application, he can at any time refer or recommend the application to his peers by selecting the recommend menu option embedded in the application. The TAG system then takes care of notifying the intended recipients of the recommendation and determining the version and location of the application that will be compatible with the recipient’s mobile device and carrier.

The process of integrating the TAG SDK generally takes less than five hours, including testing. TAG provides flexibility on how and when a referral can be initiated, either from a game menu or as the result of an event in the application. Because the integration takes place in development, developers can match the “recommend” to a friend feature with the look and feel of the application. The SDK also includes reporting features in order to track customer referral behavior.”

Mobo P2p discussion

Mobile P2P
Related Topics: Mobile Music, Mobile Video, Search, DRM — Permalink – Comments (2) [by james] I haven’t heard of any mobile p2p services currently in operation, although some services are coming close. “Verizon Wireless customers with a select number of Get It Now phones will be able to create, and then distribute their content for others to download. So, now you get to be your own producer and publisher. Other users will be able to search through an organized system that will allow users to find what they’re looking for, creating by fellow users. Now, why does this say “P2P” in the title, you ask? Well, this is exactly how other services on the PC have started.”
The question that’s on everybody’s lips — or at least was posed by Rafat last week — is what the effect of the recent Grokster decision will have on mobile content?
Well, there’s been no commentary here or on the web about that (at least that I could find) so I thought I’d have a crack at it myself. I don’t think the decision will affect mobile phone content at all, because the general consensus around the web is that the court came down against Grokster and StreamCast because they actively promoted copyright infringing activity. The record labels wanted a “primary use” definition for a technology to be declared copyright infringing, but they didn’t get (which is a good thing for Apple — there’s a strong argument that the majority of songs on iPods are pirated). There’s no reason for anyone to induce copyright infringement on mobile phones because there’s no way to get paid for it — except by charging for bandwidth, and the carriers are too eager to get friendly with record labels to start promoting copyright infringing activity, even without the desire to benefit by charging for song downloads. For the forseeable future bandwidth charges will keep illicit filesharing prohibitively expensive over mobile networks…
Of course, there are some programs that promote sharing using bluetooth or another shortrange wireless technology, bypassing the carriers altogether. Nokia Sensor allows users to create folios on their device, view the folios of other nearby Sensor users, and exchange messages and files. Since this is intended and promoted as a social networking tool it is safe under the Grokster decision.
While copyright infringing activity is likely to occur on mobile phones, it’s most likely to be people MMSing or e-mailing the files directly to their friends, rather than any piece of specific software.
Related stories:
–Is Content Sharing On Mobile An Issue?
–Mobile Anti-Piracy Royalties Cut After Complaints
–RIM out to eradicate ‘truetone’ piracy disease

 

© 2002-2006 Dis*Content Media LLC

2 Responses to “Mobile P2P”

2005 Wireless Trend

Global mobile trend update 2005     META Group Press Release on ITWeb   Posted: 5 May 2005

The mobile market is maturing and struggling to find a growth area. Basic infrastructure has been deployed in most markets, with some high-speed data capabilities in major markets. Mobile operator consolidation will continue in most markets, and users must scrutinise operators and negotiate contracts with great care.META trend: Packet-switched mobile networks based on 2.5G (GPRS and CDMA 1xRTT) are available worldwide, and most industrialised countries will have 3G (W-CDMA and CDMA 1xEV-DO) built out by 2006/07. However, coverage, reliability and roaming remain challenges, with latency a problem for 2.5G networks, addressed somewhat in 3G services.In 2005, WiMAX (IEEE 802.16) wireless metropolitan-area networks will be adopted by service providers for backhaul and wireless broadband delivery, dramatically increasing local-loop competition and driving down access prices 10% to 20% per year (starting in 2006), while providing an alternative for enterprises interconnecting campus buildings. WiMAX will evolve to support mobility by 2008 and complement WiFi in multimode handsets, increasing available bandwidth to the megabit range; multi-megabit cellular service will emerge in 2008.Technology trends Voice is the most compelling application for mobile carrier networks, and carriers are attempting to grow the market via data services. The trend to leverage mobile voice as the principal voice line is growing among knowledge-worker-intensive organisations. Enterprise adoption of 3G data services (ie, offering capacities of between 200Kbps and 2Mbps) will remain limited until at least 2007. Voice will remain the dominant application in mobile networks until 2010 by volume, and 2008 by revenue. This trend will not change when packetised voice (eg, VOIP) will be introduced in future versions of 3G/4G networks. Even though the business case is unclear, operators have continued their 3G roll-outs in most markets. Competition from other wireless data alternatives will limit the potential for 3G – especially WiFi (2005+) and WiMAX (2007+). 3G services are starting to receive some market acceptance beyond Japan and South Korea, and the vendor hype for a next set of services has begun. Market buzz has already started around High-Speed Downlink Packet Access (HSDPA), “Super 3G” and 4G. While the demand for additional capacity is unclear – users are not buying what is already offered – what is needed is better integration between wireless services. Fortunately, 4G is mostly a collection of services combining existing technologies (including 3G and WiFi) with other kinds of wireless technologies like WiMAX and future evolutions of 3G/UMTS. As a result, 4G will be less disruptive and more widely accepted if the promise is delivered upon. 3G’s remaining problems are more focused on the business case and less about technology. The previous technical issues that slowed 3G’s roll-out (eg, lack of appropriate handsets, poor battery life, problems with handoffs to/from legacy networks) have been addressed. The remaining challenges are mainly commercial (eg, the structure of compelling and profitable offerings such as regional or global pricing plans and flat-rate versus usage-based billing). Vendors are centring on fewer wireless standards. In the 2007/08 time frame, networks will be almost exclusively based on either the GSM evolution or the CDMA evolution (see below). As mobile-operator consolidation continues, remaining entities will have to standardise on one of the two established standards to stay competitive. For example, Sprint Nextel is left with two competing technologies (ie, CDMA and iDen); we expect only CDMA to be supported beyond 2008. By YE05, enterprise-class handsets will generally be dual-mode 2G/3G, with specific variants by country and technology. For the GSM evolution (available in all countries in the world except eight; used by all operators in EMEA, some in the Americas and most in Asia Pacific, but not Japan and South Korea), handsets will support GSM, GPRS, EDGE and WCDMA, operating in five bands (850/900/1 800/1 900/2 100MHz). For the CDMA evolution (used by some operators in Japan, the Americas, China, India and Australia, as well as all operators in South Korea), handsets will support CDMA, CDMA 1xRTT and CDMA 1xEV-DO, operating in three bands (850/1 900/2 100MHz). In addition, META Group expects to see the introduction of multimode phones in various forms, with some versions combining GSM with CDMA, and some combining GSM with voice over WiFi. The GSM/CDMA combo will remain very niche and low volume, as it caters to a very small user population. Likewise, the GSM/WiFi combo will be niche until at least 2006 due to high price, technology challenges regarding roaming between the technologies, and the lack of a compelling revenue model for operators. Early integrated offerings (eg, NTT DoCoMo) are a difficult sell, due to both the upfront and the ongoing costs (ie, handsets not subsidised by the carrier, as well as high tariffs for off-net services). To combat the WiFi threat, carriers will adopt aggressive price plans with the goal of drastically reducing the potential savings with the dual-mode WiFi variant. Legacy data networks such as CDPD, Mobitex and paging are fading, and users need to plan for a migration to SMS, CDMA 1.x, or GPRS/EDGE by mid-2005 to avoid being trapped in an expensive solution with deteriorating service levels. Commercial and pricing trends META Group expects a continued 10% to 20% annual price decline throughout 2007 for voice calls, and 20% to 40% for data services. We expect mobile voice charges to be comparable to wireline voice by 2010. Coverage and technology are declining as differentiators, as there are only very small differences in coverage in the EMEA and Asia regions. Quality in the Americas and Australia will become less of a differentiator by 2006, as industry consolidation and network build-outs continue. Operators are changing their messaging to compete on service levels and price. The new 3G-only entrants are competing only on price initially, which drives down the price for services in 2/2.5G networks as well. Mobile data roaming (predominantly GPRS) has improved significantly during the past 12 months, but still has a way to go before becoming nearly as ubiquitous as voice roaming. Jump-starting wireless data is a paradox for the operators – pricing will remain expensive through 2006 (and beyond) due to low levels of enterprise adoption and low traffic volumes, even though data pricing is the principal barrier to increased traffic. International organisations are hurting from expensive roaming charges (2.5x-3x more expensive than in-country-of-subscription use) for both voice and data services. Multinational enterprises should exploit pan-regional pricing plans and aggregate their total buying power across the region (including wired voice and data networks) to get the best deals. META Group estimates that 80% of large international organisations will have centralised the procurement of mobile services and made the ITO (IT organisation) responsible for managing all aspects of mobility by 2006. Although the unit charges for mobile services will continue to decrease, the overall cost for mobile services will continue to increase, as consumption rises faster than the prices decline. Carrier offerings and new equipment make the move to wireless service as the only voice line for business users attractive. This is fuelled by vendors like Ericsson, Nokia, Alcatel and Siemens, concomitant with attractive rate plans being offered by mobile operators for companies that move a substantial portion of their voice minutes over to mobile voice. Most G2000 enterprises will continue to have focused efforts during 2005/06 to contain cost and refine usage patterns of mobile services. The primary vehicle is a well-balanced mobile policy, which is becoming mandatory during 2005. The mobile policy needs to be complemented with solid processes backed up with appropriate tools to monitor and enforce the policy. Bottom line: Competition for wireless customers will drive pricing down 10% to 20% per year through 2007. Users should centralise mobile-service procurement, understand usage patterns, control usage and aggressively negotiate mobile contracts. Business impact: Improved and less expensive mobile data networks enhance the return on investment of extending applications to an increasingly mobile workforce.

Wireless Market Research

1) Introduction to the Wireless Industry.

Mobile communications and entertainment remains one of the hottest sectors in the InfoTech market. More 800 million cell phones will sell worldwide during 2006—making the cellular phone the fastest-selling single item of consumer electronics by far. Most new cell phones carry numerous advanced features. More MP3-capable cell phones are sold than stand-alone MP3 players. More digital camera-equipped cell phones are sold than stand-alone digital cameras. In addition, new cell phones are likely to be Internet-capable, and increasingly able to take advantage 3G (third generation) high speed access. In fact, by 2007, there will be nearly 1 billion consumers accessing the Internet via some type of wireless access worldwide.

The wireless world incorporates a great deal more than cell phones, ranging from satellite-based services and Wi-Fi hotspots to vast wireless networks on corporate and college campuses. The ubiquitous BlackBerry device, with its wireless email capabilities, has seen subscriptions pass the 5 million mark in 2006. Whether it’s through Bluetooth (with about 600 million Bluetooth-enabled devices sold worldwide in 2006), the much faster data transfer speeds of upstart ultrawideband (UWB), satellite, cell phone or Wi-Fi, consumers and business users alike are becoming more and more reliant on wireless-based services and devices in their daily tasks. There is no end in sight to the rapid acceleration of wireless.

There are certain things you can count on when considering the wireless market over the mid-term:

a) Cell phones will continue to morph into ever more complex, multi-purpose personal communication devices (including the growing use of the cell phone as a financial transaction device). Cell phone circuitry will become much more powerful, piggybacking off of the revolution in screaming-fast, multi-processor power in handheld game machines. Additionally, tiny high-density hard drives are now being manufactured specifically for use in cell phones. Batteries for wireless devices will become much longer lasting.

b) Although cell phone markets are relatively established in the U.S. and in major developed nations everywhere, the number of subscribers continues to grow in these countries nonetheless. In the U.S., new subscribers tend to be those on lower-cost plans and accounts set up by parents for their children. Already, more than 40% of 12- to 14-year-old Americans carry cell phones. The rest of them will soon follow.

c) Meanwhile, hundreds of millions of cell phone subscribers will be added in short order within less developed nations worldwide. More than 5 million new cell phone subscriptions are opened in India every month.

d) There is no end to the ways you can make money out of wireless trends. For example, look at the multi-billion yearly global market in downloadable cell phone ring tones.

e) Ever better, higher-speed, longer-distance standards will continue to emerge and be fully developed for Wi-Fi and other wireless network access systems.

f) Security issues such as eavesdropping on Bluetooth conversations, hacking into Wi-Fi networks and viruses spread among cell phones will require more attention and investment from the technology and telecommunications sectors. (Analysts at IDC estimate that the global market for mobile phone security software will reach $1 billion by 2008.)g) RFID (radio frequency ID tags used to track inventory) will continue rapid adoption by manufacturers, logistics centers, shippers and retailers, thanks largely to an early initiative by Wal-Mart to require its largest suppliers to use RFID to wirelessly transmit data from cases of merchandise. Second-generation RFID will eliminate most of the disappointments of earlier RFID implementations.

h) By 2007, about 8% of U.S. homes will have cancelled landline service entirely, relying on their cell phones instead.

Over the mid-term, emerging markets in lesser-developed nations will add about 1 billion new subscribers to today’s global base of more than 2 billion. While cell phone market penetration is at 100% in some nations, including Sweden, the U.K. and the Netherlands, it is only about 70% in America. Sales and subscriber growth will continue to boom in nations with rapidly-growing economies like China and India.

Accessing and transferring data and entertainment via cell phone is growing at a rapid clip. Worldwide, more than $2 billion is spent on accessing games via wireless handsets. In the U.S., there are more than 210 million cell phone subscribers (as of 2006), taking advantage of more than 180,000 cell phone towers that seamlessly pass along calls as users move from one place to another. Built-in cameras are extremely popular with Verizon’s customers. In total, they use data services to e-mail about 300 million digital photos yearly.

Meanwhile, the rapid development of Wi-Fi, the potential spread of longer-range WiMAX and the eager adoption of VoIP all threaten to turn the cell phone and landline industries upside down. Already, the leading cell phone provider in Japan, NTT DoCoMo, is marketing a cell phone manufactured by NEC that works on standard cell phone circuits and, when it senses the presence of Wi-Fi, can switch over to VoIP, wirelessly making calls over the Internet via the Wi-Fi connection. Motorola has developed a comparable phone, and BT recently launched similar features in the U.K. market.

Consider this: Wi-Fi is only good for a range of a few feet. WiMAX, on the other hand, may be good for up to 30 miles. When WiMAX gets rolling, the eventual effects on cell phone service and markets could be profound. What firms will be leaders in providing Wi-Fi and WiMAX access? What revenue streams will be generated? How will cell phone subscription use and revenue be affected? The answers are not yet clear. AT&T and other leading telecommunications sector companies are testing, or plan to test, Wi-Fi offerings. As a result, the competition for wireless customers will become much more intense. Hold onto your hats—it’s going to be wild, wireless ride!

A 2006 survey of cell phone users in America conducted by the Pew Internet & American Life Project found that there is still plenty of room in the U.S. market for the sale of advanced cell phone services. Their survey showed that only 4% of cell phone users had employed their phones to access mobile maps, while 47% said they would like to do so. Likewise, only 8% said they had used cell phones to send and receive email (24% would like to do so), and only 14% had used them to access the Internet (16% would like to do so.)