J’son & Partners has released Russian Wireless Content Market Watch (PDF) which has some interesting stats on the rebound of the Russian mobile content market after a fall-off after Xmas 2004. This cyclical nature of mobile content has been noted previously, but J&P point out some other reasons it thinks attributed to the fall in the first half of this year: “Decrease in demand for low-end services (logos, melodies, ringtones); Lack of innovative and interactive services, spurring demand; Strong decline in television advertisement efficiency; Much more free content offered, negatively affecting overall sales; Overspending on advertisement in 4Q 2004 and spill-over effect into 1H 2005; Young market segment becoming more picky and sophisticated when selecting content.” Most of this was expected, especially the decline in TV advertising efficiency (I mean, who was really surprised that Jamster had a high churn rate?).
In the accompanying news release J&P write: “We warned our clients that this rebound translates into a stronger pressure on all players to produce new and more innovative content. Existing players need to invest more in interactive and high-end services as margins are decreasing for mass market content such as logos and ringtones. Two out of the Top 10 players from 2004 are no longer listed in J&P’s 2005 Top 10 list“.
Even as the overall market is growing some companies are being left behind because they’re focussing on the wrong sector. Java Games, Entertainment and Business Information segments are increasing while Logos and Melodies, Chat and Print Media segments are going down.
The segments will be different in varying markets, but I think the lesson is the same — when the tide comes in all the boats rise, except the ones which are anchored in the wrong way, get swamped and sink.
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