Social Networking To Dominate UGC On Mobiles: Report

You’ve read the announcements about all the new service launches, and now here’s some numbers to back up the business model: user-generated content is predicted to have explosive growth in the mobile space in the coming years, according to a new report from Juniper Research, generating revenues of over $5.7 billion in 2012 from $572 million this year. Within that, social networking sites will account for 50% of the total by the end of the forecast period. The report has some other noteworthy stats on current usage, which were compiled through interviews with “some of the leading organizations in the growing mobile user-generated content industry”:

–Currently there are around 14 million people using social networks (the number will grow to 600 million by 2012).

–Downloads from these sites are pretty low right now — around 200 million this year (the claim is they will grow to over 9 billion in the next five years).

–Mobile dating and other chatroom services make up the bulk of social media services at 57 percent, but it will fall to 21 percent by 2012.

–Off-portal social networking brands will most likely run on ad-supported models rather than charges. (Several social networks currently charge for mobile usage, including MySpace, SeeMeTV’s Moko site in the U.K., and Kwick! in Germany, although these are usually served via exclusive arrangements with operators, who organise the billing.)

The report’s author, Dr. Windsor Holden, believes that some of the biggest growth might be in markets that have low fixed-Internet penetration but a very enthusiastic, large population of young mobile users — think China, Russia or India here. But in many markets, continuing high data charges are going to hold back growth. This issue is picked up in a related article in The Guardian, which reiterates the often-made point that operators’ biggest fear is that flat-rate data charges, which would increase usage of mobile Internet services, will commoditize their capacity. This is of course part of the reason why operators hope that by co-opting the social media trend through deals with the companies to charge for service, they will stay part of the value chain.

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