Bite-Size Entertainment

By Arun Natarajan, Guest Author, reporting on the Venture Intelligence Internet & Mobile Connect conference in Mumbai.

The second panel on “Mobile VAS: Time to look beyond Ring Tones and Wallpapers?” was moderated by Sandeep Singhal, Managing Director of Nexus India Capital. Rajesh Sawhney, President of Reliance Entertainment, emphasized how entertainment outshone all other applications on the mobile platform. “Entertainment accounts for 80-90% of the value in the Mobile VAS ecosystem,” he said. It is important for companies to take cognizance of the shortening of attention spans among consumer and hence deliver entertainment and other services in “bite sizes”.

Pointing out how “ring back” tones has been the biggest innovation in the Mobile VAS segment (accounting for 35-40% of the market), Arvind Rao of OnMobile said that there was a lot of scope for entrepreneurs to come up with services that leveraged the convergence of the mobile with other media like the Internet, print and television. “(Unlike on the Internet), mobile applications have a built-in revenue model – it’s called airtime.” The user-interface is as important as the content being delivered on the mobile platform and it is important for companies to make the process of locating their VAS applications speedy and at the lowest possible cost, Rao added.

Sanjay Swamy, CEO of mChek, emphasized that the existing Mobile VAS services were just the “tip of the iceberg” and we can expected to tremendous number of services being launched as GPRS is rolled out. However, it is important for mobile start-ups to deliver applications that leverage existing infrastructure, rather than those that require operators and consumers to upgrade their equipments. “As an entrepreneur, you should try and focus on factors you can control,” Swamy advised.

Shailesh Varudkar, Associate VP of Hutch, pointed out that revenues from Ringtones and Wallpapers was clearly stagnating (and even declining in some pockets) both due to market saturation as well as piracy. He encouraged start-ups to come up with “community building” services (like blogging, social networking, etc.) for the mobile platform. Operators will continue to emphasize voice-based services since, in India, the scope for English-language based applications was limited beyond a certain point. On the question of VAS companies trying to circumvent operators, Varudkar said it would be a difficult proposition in India since penetration of other media like the Internet and credit cards was limited and it was too expensive to set up a retail network covering the entire country.