We entered our 4th year of running Mobile Breakfast Series and hosted 2012’s first Mobile Breakfast Series on March 28th. The topic of discussion was “How Mobile is Impacting Media, Commerce, and Consumer Behavior.”

First of all my thanks to our series partner: OpenMarket and Synchronoss Technologies. Both of them have been great partner to this series and I very much appreciate their support.

Before I get into the details of the panel discussion, a few announcements about the upcoming events. We are planning on hosting MBS events in Atlanta and London this summer and need your assistance in getting the word out. On June 22nd, we will be in Atlanta to host a fireside chat with David Christopher, CMO, AT&T Mobility. The following week, we will be in London and in partnership with O2 UK, we will have some great discussion about the future of the Operator/OTT tussle in the ecosystem.

Our fall summit – Mobile Future Forward is scheduled for Sept 10^th later this year and we are making good progress in setting up the agenda and the topics of discussion, already have some terrific speakers lined up. The theme is to connected universe, monetizing opportunities. We will open up the registration late April, so, keep an eye for that.

We released our yearly update on the US market earlier this month and you might have noted that 40% of the service revenues are now coming from mobile data. In Japan, this figure is getting close to 60%.

If you look at the consumer IT spend – mobile now occupies 50% of that budget and it is increasing. More than 35% households in the US are mobile only. More than 90% of the devices sold last quarter in the US were smartphones. Mobile influences 30-50% of our commerce transactions. In 2009, ESPN noted that their mobile web traffic is exceeding desktop traffic, now most brands have noted that they are already there or within the next 12-18 months mobile will be the majority traffic owner.

The impact of mobile is even more profound in developing countries. The first billion mobile subs took 250 months, the last billion took only 15 months to 6 billion and we will reach 7 billion in 12 months. Mpesa, kenya’s mobile payment now drives 20% of the country’s GDP. In Bhutan, where I spent some last quarter, mobile is the only way to deliver health care to remote areas. Earlier this month, China surpassed a billion subscribers. The opportunities are literally endless. In 2002, I had the good fortune of writing a book with then CTO of NTT DoCoMo, Dr. Yasuhisa Nakamura and he used to say – mobile networks need become omnipresent like air – clearly he didn’t have to pay for roaming data charges. Mark Weiser, from XEROX PARC, one of my heroes, considered the godfather of pervasive computing who first articulated the concept of everywhere, anytime computing back in the eighties and early nineties would have been proud to see the progress we have made.

Mobile is disrupting many industries – two of the most prominent being media and commerce and it is all driven by how consumers perceive the value of mobility, how they interact with content and devices, and how their consumer behavior is shaped over time. To discuss all of that, we had a great panel.

Michael Bayle, Senior Vice President and General Manager, ESPN Mobile. Michael Bayle is Senior Vice President and General Manager of ESPN Mobile. A former Yahoo! and Microsoft executive, Bayle develops and manages all aspects of ESPN’s mobile strategy and execution, including content production, programming and publishing on every ESPN Mobile platform.  He reports to John Kosner, Senior Vice President and General Manager of ESPN Digital and Print Media. Before ESPN, he did stints at Amobee, Yahoo, and Microsoft.

Len Jordan, Managing Director, Madrona. Len joined Madrona in January 2010 and is actively pursuing opportunities to lead new investments.  He currently serves on the boards of Cedexis, MaxPoint Interactive, and Zapd on behalf of Madrona. Len has served on the boards of ten early-stage companies and on behalf of Frazier Technology Ventures currently serves on the boards of Control4, DSIQ, Medio, and Wetpaint. Prior to joining Frazier Technology Ventures as a General Partner in 2004 Len spent 16 years in the software industry.  He most recently served as a senior vice president at RealNetworks.

Megan Tweed, VP, Media, Razorfish. Megan brings bleeding-edge media strategy and planning innovation to clients like Best Buy, Weight Watchers, and Nike. She is a leading agency and industry voice on the benefits of holistic, platform-agnostic planning and measurement across all viable platforms. Before Razorfish, Megan spent time at Carat and UniversalMcCann working on key global accounts.

Vik Pavate, VP of Business Development, Kovio. Vikram Pavate joined Kovio in 2002 with extensive experience in business development, product management and strategic planning. As vice president of business development, he is responsible for Kovio’s corporate strategy, business development, product management and marketing, OEM relationships and strategic joint development and technology alliances.

We touched upon a range of topics, players, issues, and opportunities. Below is the summary of the discussion:

• ESPN is one of the leading mobile properties – 20M mobile uniques, 9B alerts, active across all screens, 4th largest network. 55 different networks.
• Texting growth have declined but still very important for media and commerce.
• NFC is going to be more successful for other things besides payments. 30M NFC phones shipped in 2011, will more than triple in 2012.
• Many of the European operators like O2 investing heavily in NFC and related services.
• The four major players at the center of mobile commerce evolution are: Google, Apple, Amazon, and Paypal. Apple because they massive number of iTunes accounts, Amazon because of their scale and tenacity in doing things at low margins, Paypal is the most dominant mobile payments player in the market today, and Google because, they are the only major player doing something with NFC and learning.
• I might add Square and Starbucks to the mix. Both are doing some interesting stuff that has scale already.
• Financial institutions have wrestled away the 3% transaction share opportunity from the operators. The opportunities for the rest of the ecosystem are in going to be built on top of that payment platform like couponing, advertising, marketing, loyalty programs, etc.
• US retailers are some of the most inefficient in the world and we are in a for a big reset in the next 2-5 years.
• Tablets are a brand new category and eating away from the PC transactions. Expedia already seeing significant commerce traction on tablets.
• Tablets are becoming substitute for catalogue for many brands like Best Buy.
• 50% of the time, consumers have a second device while watching TV. Tablet usage occurs mostly in front of the TV so companies are looking to engage the users on both the platforms at the same time.
• Android devices are out shipping iOS 3:1 but revenue for developers is lacking. iOS is taking away 75% of the developer projects. HTML5 is also starting to have an impact.Android development is expensive due to fragmentation, roughly 2 to 3 times more.
• Windows, Microsoft, and Nokia likely to make a strong comeback. Nokia is weak in the US but very strong in over 40+ countries. Brands want reach, are likely to gravitate towards Nokia for fulfilling some of their goals. Everyone has
• 12% of the media spend is digital. Mobile takes a significant share of attention but only a tiny fraction of the advertising spend. Reasons – maturity, disconnect between impression and commerce, lack of quantifiable metrics. Millennial Media’s blockbuster IPO at almost $2B is however a good indicator for the segment as it became the first company in the space to be vetted by the public markets.
• There are huge opportunities in local advertising.
• Media consumption and commerce are shifting away from desktop to tablets and smartphones. will create new winners and losers.
• Mobile operators role is likely to be that of the enabler vs. the creator of new services.
• Mobile video consumption and advertising are on the upswing. However, the tiered data plans is starting to give a pause to the advertisers. There are ways operators and content owners/advertisers can work together in the interest of the consumer.
• The integration of social with mobile and location is creating new companies and opportunities.

Always, great to moderate a panel with terrific speakers. MBS audience is top-notch as well. Great questions and follow-up. That’s why it is so much fun putting these together. The next MBS event in Seattle will be on June 7th. Hope to see you there.

Until then, do good work and keep in touch.

thanks

Chetan

Bonus: Some ESPN stats that will rattle your mind

ESPN Mobile enjoyed a record-setting month in March, with new highs for mobile web and app usage, as well as video content and alerts.  ESPN mobile web and apps served an average minute audience of 103,000 in March, with an average of 5.1 million daily unique visitors (an increase of 22 percent over March 2011) and 3.1 billion total minutes for the month. ESPN apps in March had 3.6 million average daily uniques (up 125 percent over March 2011) and 1.5 billion minutes (up from 595 million in March 2011).

ESPN Mobile delivered 45 million video starts in March, including 24.6 million from mobile web and 19 million from the ESPN ScoreCenter handset and table apps, both record highs for a single month.  In addition, ESPN delivered 1.5 billion alerts in March, also a record high for any month.

(Source: ESPN)