JupiterResearch: Vodafone-MBlox agreement

Thomas Husson posts at the Jupiter Research Weblogs about a recent announcement that mBlox has "signed a deal with Vodafone to agree on wholesale data tariffs. Those already exists on voice and SMS, but it is the first agreement of this kind that will enable Mega Bytes to be sold to third parties. This will enable record labels and content providers to sell content directly to consumers." Husson notes:

• so far, data tariffs to be paid on top of the content itself were too high
• many record labels complain that mobile operators do not exploit their back-catalogue and only sell their Top 20 songs. Here they have kind of a "long tail" opportunity.

Husson points out that "other off-portal players have announced their interest to distribute music content such as Monstermob or Jamba. This is a first step to lower the barriers to entry for new players. Fnac, one of the main music retailers in France, has just launched its Fnac Music portal on i-mode. It only includes ringtones but music will follow soon. The wider the ecosystem, the better the growth for the overall market."

Husson believes that:

this agreement goes beyond music and will have an impact on off-portal content distribution and on mobile business models in general. Why not include VoIP, e-mail, IM in such an agreement...? So far, it has been limited to music and will then open to "rich-media". Vodafone relied on m-Blox because it trusted the company to enable the service in the UK, excluding those potential threats from the contract. I think such an agreement will enable operators to foster off-portal business (generating revenues for them) since media companies are to take a chunk of the pie anyway.

After a chat with mBlox's executive chairman, Husson concludes that:

carriers could also have more freedom to implement complex tariff structure through wholesale deal that would be impossible to explain to consumers. It could also help them to avoid the launch of "all you can eat" packages, which could be dangerous for them. Interesting point of view from a player which is specializing in the value chain, trying to reach scale and scope in a business where volumes are increasingly important. Exactly the opposite strategy from that of Verisign, which recently acquired M-Qube (main competitor of mBlox in the US) to offer a full turnkey solution (content creation, aggregation, delivery, billing, reporting,...).