Operators feel the pinch

We kicked off our networking events for 2007 last week with a dialog about Mobile Operators’ walled gardens. Sorry for not posting before now, no excuses, just too busy with other stuff.

Thanks to Lbi, we didn’t have to worry about sore bums on hard seats. The room was nice and relaxed with big comfy two-seater sofas, helping to set the informal tone for the evening. The sofas reminded me of the good ole days of going to the cinema with a new girlfriend.

Mirage Islam, Head of Development Programme, BSkyB (and BIMA Executive) did a brilliant job at facilitating the debate, providing his own thoughts intermittently throughout the evening.

I can only give very small sound bites as BIMA dialogs and dinners are ‘off the record’, providing speakers and members of the audience, an opportunity to have a discussion in an open forum, without worrying about being quoted in the press. So, what happens on tour stays on tour.

Firstly, I’ll explain what a walled garden is in case it’s a term you’re not familiar with. Walled garden refers to the premium content that Operators sell to consumers. The content is either created by the Operator or supplied by a list of preferred suppliers who are obliged to give a cut of profits to the Operator.

According to some of the vocal attendees, this approach has made it extremely difficult for innovative content and application providers to sell direct to the consumer because it generally means they have to spend a lot of money on marketing. Some would argue that it’s not healthy for the consumer either, as it limits their choice; hence one of the reasons mobile content is so expensive.

Could you imagine BT (broadband provider) only permitting consumers to access its content and thereby restricting access to the Web? So, as you can imagine, it’s a sore spot for most providers and it’s a no-go for most investors who feel there are too many obstacles for innovative companies to break into the mobile space.

The theme lived up to my expectations with an interesting evening of direct questions being fired at our esteemed guest speakers, who I may add, provided decent answers under the pressure.

Our 3 speakers gave succinct introductions, leading them nicely into the lion’s den where numerous hungry content providers awaited to pounce. It’s very easy to take a shot at Operators for their control over consumer choice, but as our speakers demonstrated, this is, to a degree, done with good reason. Personally, I think Operators’ control was in the consumers’ best interest, but perhaps it’s now time to share the honey with the rest of the value chain.

The first of our speakers to stand up to the mark was Stephen Wolak, Web Technologies Manager, Vodafone Group R&D UK. Stephen’s main focus was on the user experience. He opened up with a quote from a book he read recently (sorry didn’t catch the name!)

When a person walks into a DIY shop to buy a drill, they don’t buy one because they need a drill, they buy one because they need holes.

This is very appropriate as I believe we sometimes forget what customers actually want and need. We tend to give them what we think they want and importantly, without asking for feedback so we can make further improvements.

In the Operators’ defence, Stephen came out with a great argument that demonstrated why he thinks Operators were (are?) right to control access to content.

We needed portals like AOL in the early days of the desktop Web. It helped to ensure users could easily find the content they were looking for in a user friendly environment. I feel the same can be said for mobile, WAP provided a user friendly environment for users in the early days. Now we can look to providing access to non-listed content.

Next up was Andrew McGrath, Director, Design and Usability, Orange. Andrew talked about Orange’s position in the market as a media owner and not just an Operator. According to Andrew

We simply want to give customers want they want. We believe Orange is in a position to do this as we have a trusted brand.

Last but by no means least, Peter Ford, Alliances Director, EMEA, ATG was under the spotlight. Peter, like the previous speakers, was very articulate with his answers. He was probably the most vocal (and to the point) of the 3 but perhaps that’s because Peter doesn’t work for an Operator. He came across as a very honest guy, so I’m confident he wasn’t there to agree with his peers for the sake of it.

Peter was also focused on the user experience. I don’t think I’ve been to an event where the customer is centre of attention for everyone. Is the customer at the centre of attention in reality though?

One of Peter’s comments which stuck out in my mind was

I don’t want to watch TV on my phone, I just want to do simple things.

This is almost ironic as Ken Blakeslee demonstrated to Adrian McMahon how he accesses his sky box using a pair of glasses and a mobile phone.

I’m sure there are lots of people who don’t want to do anything other than make voice calls. However, there’s huge chunks of revenue to be gained through data and users do consume massive amounts of it through music and video downloads, amongst other services.

Amongst the audience was Jeremy Flynn, CEO, D2SEE. Jeremy was vocal throughout the evening making some excellent comments and raising tough questions. One of Jeremy’s points was

Standards and standardisation are two different things. I don’t care about standards as long as we have access to standardised APIs. At present [company x] makes it virtually impossible for us to provide content to their customers. They don’t provide standardised APIs and their age verification system is virtually impossible to work with.

We need all Operators to work together.

There were other members of the audience asking plenty of questions but as I’ve said, I can only provide a few sound bites.

The networking afterwards was relaxed and informal. Hooking up with pal and veteran mobile expert Ken Blakeslee from WebMobility, was of course great. Ken never ceases to amaze me with the gadgets he pulls out of his pocket. I thoroughly enjoyed meeting the rest of the attendees and hope to see them at future events.

You can see all the photographs on Flickr.