The adult mobile content market will nearly triple over the next several years, reaching $4.6 billion by 2012, according to a recent forecast from Juniper Research. But don’t expect much of that money to come from North American consumers anytime soon.
Juniper predicted video chat services will help fuel uptake, accounting for one-third of revenues within five years, as carriers continue to build out 3G networks and video-capable handsets become mainstream. Text-based services and downloaded offerings are also expected to play a substantial role in the next few years.
“Those video chat services already deployed are showing quite remarkable levels both in terms of customer retention and average usage, with users regularly returning to chat to the same hostess and developing a virtual relationship with her,” author Dr. Windsor Holden said in a prepared statement. “With 3G penetration expected to exceed 25% in many developed markets by the end of 2008, there is a significant opportunity for mobile adult services to launch and monetize live chat services.”
Western Europe leading market
Western Europe, which currently accounts for 45% of worldwide adult mobile revenues, will continue to be the prime market. North America is poised to see a “marked increase” in uptake: revenues will explode from $25 million to $575 million by 2012 as the continent’s market share grows from a mere 1% to 12%.
For now, though, North American consumption of prurient mobile stuff is only slightly ahead of, say, Antarctica’s. Carriers have effectively kept all but the most innocuous content at arm’s length, fearing bad public relations and a consumer backlash. And those fears are well-founded — the Canadian operator Telus Mobility last year quietly dumped its racy offerings after receiving hundreds of customer complaints about the stuff, which had come online just two weeks earlier. A Catholic archdiocese in Vancouver, British Columbia, led the charge against the operator.
And it’s not like Telus Mobility was pushing the envelope by throwing a bunch of hardcore footage on the deck for any consumer to access. The operator had registered and age-verified several thousand customers willing to pay $3 to download nude images or $4 for video files of nude or partial nude offerings; nothing edgier was offered.
Nothing wild and crazy going on in North America
So how much have things changed in North America in the past year?
“As far as changes go, there really aren’t any. I wish I had some wild and crazy things to tell you, but I don’t,” said Clint Fayling, president of Brickhouse Mobile, a Denver-based purveyor of wireless adult content. “North America is still in the same state it was before; no lines have moved. No age verification policies have been put in play that would predicate offering adult content to the (mobile) consumer.”
CTIA in early 2004 began working with tier-one carriers to create guidelines for mature content on operator decks in an effort to stave off potential federal intervention. While that effort accomplished little — creating a system that essentially labeled content either G (acceptable) or NC-17 (unacceptable) — carriers have timidly begun to experiment with PG-13-style offerings such as HBO’s “The Sopranos” and “Sex in the City.” And they’ve covered themselves by allowing users to block access to such content from anyone on the account.
But it’s too simple, of course, to think the lack of age-verification systems and similar policies is to blame for the stalled U.S. market for mobile adult content. Given the backlash to Telus Mobility’s foray into adult content, it seems carriers haven’t installed such systems because they have no intention of offering such edgy stuff anytime soon.
The off-deck play
The lines continue to blur between mobile and the Web, though, and network operators will be forced to address those issues — soon. Even marginally tech-savvy types can use basic Web-enabled phones to visit any number of Internet sites that offer free, unrestricted access to a host of adult content, from scantily clad models to hardcore video. And while many of those sites may be unusable with a phone, they’re sure to become mobile-friendly as uptake increases on the wireless Web.
So just as off-deck activity is already seeing increased revenues from traditional types of mobile content, it is sure to spur uptake of adult content. The challenge for carriers will be how to monetize the controversial stuff while at the same time assuaging the fears of customers – and legislators. Because while mobile may not be the most, um, porn-friendly platform available, users will increasingly check out everything from text-based chat services to X-rated video clips as those offerings become more accessible. Operators will have to embrace regulations more proactively or lose out on adult content revenues to third parties who custom-fit their offerings for wireless.
“I pay more attention to what the individual carrier is telling me than CTIA,” Fayling said. “Ultimately, I’m catering to that carrier, and even to each carrier there’s a certain amount of confusion.”
And how’s it going so far?
“Those rules can go from ultra-conservative to fairly conservative, but nobody is getting terribly liberal at this point,” Fayling said of North American operators. “It’s beyond frustrating. It’s almost comical.”
