Chapter 14

Mobile Media

The digital and mobile revolutions continue to present the entertainment industries with opportunities and challenges. Whereas the Internet and desktop computers have dominated the paradigm shift in the past, the future belongs to wireless mobile technology. The growth of cell phone adoption outstrips Internet adoption. The basic mobile phone, which has been around for nearly 30 years, has evolved from a voice-only form of communication to a multimedia device capable not only of communication but of delivering information and entertainment. Cell phone penetration has reached over 100% in many developed countries and has continued to increase in emerging countries.

FROM CELL PHONE TO MOBILE COMMUNICATION DEVICE: ADOPTION

The wireless handset, which has morphed into a multimedia personal communication device, continues to grow in popularity around the world. Beginning with the third-generation (3G) handsets a few years ago, mobile data networks and increasingly sophisticated handsets have been providing users a variety of offerings. The first generation of mobile phones was introduced in the 1970s, and the period lasted through the 1980s. These devices worked on an analog signal much like those used by two-way radios. The second generation began in the 1990s, used digital voice encoding, and included the geographically compatible Global System for Mobile (GSM). The third generation, or 3G technology, allowed for enhanced multimedia, broad bandwidth and high speeds, and usability for a wide variety of communication tasks.

Table 14.1 Global penetration of cell phone adoption

Source: The Mobile Divide Across Nations Online Marketing Trends, 2011

Figure 14.1 Top 10 countries by active mobile broadband subscriptions per 100 inhabitants

The 3G handsets, which are now widely in use in parts of the globe, were first to offer users a new data network with sufficient bandwidth compared to the original analog and first-generation digital cellular phone service. The wireless data services continue to evolve with 4G. As prices drop on handsets and service plans, adoption of web-based mobile handsets continues to outpace adoption of computer-based Internet devices. For developing countries, it is easier to install the infrastructure for wireless systems than to string coaxial cable from home to home. In 2012, Susan Huynh, Forecast Analyst for Forrester Research stated “In emerging markets, where the penetration of landline phone connections has been low, the adoption of mobile phones has soared over the past five years. Mobile handsets are able to provide a cheaper and more convenient means of telecommunications access.” Also, the proliferation of Wi-Fi “hotspots” is fueling the growth of mobile-based browsing. Global Wi-Fi hotspots were predicted to increase from 1.3 million in 2011 to 5.8 million by 2015—an increase of 350% (Rasmussen, 2011).

As of the end of 2011, there were 5.9 billion mobile subscriptions—equivalent to 87% of the world population (The International Telecommunication Union, 2012). Growth is led by China and India, which now account for nearly 1 billion subscribers each (MobiThinking, 2012). The Pew Internet and American Life Project reported in 2011 that over 83% of Americans own a cell phone, and by early 2012, 46% of Americans had smartphones—an increase of 11% in less than one year.

Figure 14.2 U.S. smartphone adoption over time

(source: Pew Internet Project, 2012)

CONSUMER USAGE OF MOBILE COMMUNICATION DEVICES

In 2008, the Pew Internet and American Life Project reported that 62% of Americans had some experience with mobile access for activities other than voice communication, either through mobile phones or wireless laptops. In the first decade of this century, the most popular alternative use for cell phones was text messaging, with 58% of cell phone users stating they have used their device for text messaging. Equally, 58% had used their cell phones to take a picture, whereas only 17% had used their handheld device to play music and only 10% to watch a video. Of interest to the Pew researchers, nonwhites, specifically African Americans and English-speaking Hispanics, were more likely to engage in media activities other than voice phone service. That trend continued with their 2011 study that found 44% of Hispanics and African-Americans owning a smartphone and only 30% of Whites.

Mobile device usage also varies by age, with younger adults much more likely to use these devices for text messaging and all other non-voice activities. In all categories, usage decreases with age, thus underscoring the vast generational differences that exist between a generation that has grown up around computers and an older generation whose computer experience is limited to adulthood.

The results of the Pew Internet and American Life Project indicate that Americans have indeed become dependent on the use of mobile communication devices for activities other than voice phone, especially text messaging. That study and others have shown that mobile data and communication activities are especially important for user groups who do not also have landline Internet service, whether it’s in developing countries who have bypassed landlines or demographic groups in the United States and other countries who had opted for wireless communication only and are less likely to have ever adopted landline communications.

Figure 14.3 U.S. smartphone ownership by ethnicity

(source: Pew Internet, 2011)

Figure 14.4 U.S. smartphone ownership by age

(source: Pew Internet, 2011)

Figure 14.5 How people use mobile phones

(source: Mobile Marketing Statistics)

The Pew study also indicates that mobile web adoption is still in the early stages among most demographic groups, with the 18 to 29 age group showing the most usage at 31% of cell phone users. This group is also the most inclined to be heavy users of social networking sites. With smartphone adoption reaching the tipping point, and with the proliferation of high-speed data networks and hotspots, consumers are turning away from desktop computer systems and relying more on mobile devices to conduct many online activities—including music purchase and consumption. And as mobile Internet becomes more popular, marketers are looking at ways to provide popular content to this age group, and social networking looks very attractive.

MOBILE E-COMMERCE

Mobile commerce is on the rise. Smartphone users have gotten comfortable using their mobile devices for shopping, comparing prices, looking up product reviews, banking, and making purchases. U.S. mobile commerce sales are expected to rise from $3 billion in 2010 to $31 billion in 2016—increasing to 7% of web sales (Mulpuru, 2011). In the United States, banks are beginning to offer banking services via cell phone, including checking on account balances, paying bills and transferring funds, and concert promoters are beginning to use cell phones for ticket sales and delivery (see Chapter 15).

In the article “5 Big trends in mobile commerce,” author Lauren Indvik (2011) reports the results of a survey of smartphone owners, and presents these findings:

Forbes magazine declared 2012 as the year for mobile commerce: convergence and context (Caron, 2012). Caron makes the point that mobile e-commerce is not the same as mobile commerce. He states that mobile commerce is using your mobile device within a store to make a purchase, and thus bypassing the store’s point of sale system. Mobile e-commerce involves using the device to shop at an online store such as Amazon. Caron describes the convergence as “When bricks and mobile finally integrate to provide a holistic shopping experience whereby each shopper has a unique experience with the physical store.” Context involves personalizing couponing, features, discounts, and location-based information for each customer. Caron concludes by stating:

One technology that is making this possible is near field communication (NFC), defined as a short-range wireless transmitting technology that connects a smartphone with a receiver to transfer data. It works much like a toll booth EasyPass. NFC is cheap and easy, and while it is already available in other countries, neither Apple nor Android was offering NFC in early 2012. Despite security risks and the debate over who should control the transaction process (the phone service provider or the store), Lauren Brousell of CIO (2012) says adoption is inevitable.

MOBILE SOCIAL NETWORKING

As social networks rollout more sophisticated apps for mobile devices, mobile social networking continues to grow. As indicated in Figure 14.5, nearly half of all smartphone users engage in social networking via their mobile device. Growth in usage is up 41% from 2011. ComScore (2012) reports that more than half of smartphone owners who engage in mobile social networking do so on a daily basis.

In the U.S., 64 million smartphone owners accessed social networking or blog destinations via their mobile device in December 2011, an increase of 77 percent from the previous year, while 48.4 million consumers accessed social media in Europe, an increase of 76 percent.

ComScore (2012) and Kharif (2006) believe that mobile customers are likely to use social networking services when they are stuck somewhere outside the home, for example, waiting for public transportation.

Mobile social networks are attempting to exploit the geographic benefits of mobile networking by providing location information of friends via global positioning information—called “location-based services” (LBS). This added dimension to social networking allows users to physically meet one another using mobile devices. In 2011, Facebook acquired the LBS Gowalla. Facebook had experimented with its own location-based service “Places” but had given up on the project. In 2012, FourSquare was the top location-based networking service with over 15 million users. Much controversy surrounds the use of proximity alerts, mostly concerning personal security. However, this feature could be beneficial to concert-goers who attempt to meet up with friends at a venue that may be filled with thousands of other fans (see Chapter 15 on cell phone usage at concerts).

As mobile phone users continue to find new ways to use phones for staying connected and for social networking functions, opportunities are developed to promote music, much the way computer-based social networking sites have found numerous ways to incorporate music into the social activities of their sites. Chapter 15 will explore ways to use mobile communication devices to promote music and music-related social events with the help of text-messaging, viral marketing, and mobile Internet features.

TABLETS: THE BEST OF MOBILE AND IN-HOME ENTERTAINMENT CONSUMPTION

The latest generation of mobile devices is the tablet, which combines the features of a laptop with those of a smartphone, in a mid-size device. Some tablets are set up for Wi-Fi only while others include a subscription service to a 3G or 4G mobile network. Advantages of tablets include the convenience and quick startup time of a smartphone combined with a larger screen and work area. The concept of a tablet-size computer is not new, but the iPad, first introduced in 2010, was the first to be successfully adopted by consumers on a large scale. Other tablets were introduced about the same time, although some, such as Amazon’s Kindle and Barnes and Noble’s “Nook” had limited functions. In late 2011, Amazon introduced the Kindle Fire, their response to the industry leader, the iPad. As of early 2012, Apple continued to dominate the market, but the Kindle Fire had quickly made a dent in Apple’s market share.

Figure 14.6 Tablet market share

(source: Kahn, 2012)

OTHER NEW MEDIA DEVICES: IN-HOME STREAMING MEDIA DEVICES

One other class of new media devices that should be addressed because of their effect on music consumption is that of TV set-top streaming devices such as Roku and Apple TV. These units connect to the television set and use the Internet to stream entertainment content to the television. They are commonly used with Wi-Fi and can serve as a conduit for other computer devices in the home, streaming music and other content from the desktop computer, or from a mobile device. They are worth mentioning here because their presence allows music consumers to take full advantage of streaming music services like Pandora and Spotify. This has the potential to alter music consumption and thus music purchase behavior. In 2011, more than 200 indie labels pulled their songs from streaming services, believing that it was killing music sales. However, in early 2012, Sony Music’s president of global digital business and U.S. sales Dennis Kooker did not believe the streaming services were having an effect on Sony’s music sales (Chacksfield, 2012). And the RIAA reported in 2012:"Revenue generated by subscription services like Spotify, Rhapsody, Rdio, and others was up 13.5 percent (from $212.4 million to $241 million), according to the Recording Industry Association of America’s (RIAA) year-end music shipment statistics for 2011”(Cheredar, 2012).

CONCLUSION

Mobile media continue to evolve, from simple cell phones, to texting, to smartphones, and now tablets. Each wave has forever altered the way people communicate and access entertainment. As this shift occurs, the music business must reinvent how it monetizes entertainment content in a way that will keep music consumers involved. Much of that shift is being facilitated by ubiquitous access to high-speed wireless Internet access, cloud computing that allows for storage of personal entertainment collections, and the plethora of interconnecting devices that allow for music access and consumption in a variety of settings. The MP3 player, or iPod, is no longer considered a new technology.

Notes

Bibliography

Brousell, Lauren (2012, March 28). Five things you need to know about near-field communications. CIO. http://www.cio.com/article/702631/Five_Things_You_Need_to_Know_About_Near_Field_Communications

Caron, John (2012). For mobile commerce: the year of convergence and context. Forbes. http://www.forbes.com/sites/ciocentral/2012/01/16/for-mobile-commerce-the-year-of-convergence-andcontext/

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