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'Off portal,' but not off radar

Smaller companies must be creative to get around portal sites set up by the major wireless carriers.

By ASSOCIATED PRESS
Published April 17, 2006

LAS VEGAS - As commerce quickly goes mobile, some companies are finding the best way to sell ring tones, games and other entertainment on the move is to market straight to consumers.

Smaller companies are doing an end-run around carriers like Verizon Wireless or Cingular Wireless LLC by turning to bricks-and-mortar stores or offline promotions, thus avoiding the fees associated with placement on mainstream mobile portal sites.

For PlayPhone Inc., that means selling $5 to $20 prepaid cards for buying ring tones, games, wallpaper and music videos. The cards are sold at stores like Kmart, EB Games, Rite Aid drugstores and Sam Goody.

"It's actually a convenient way, because if you walk out of the store and you bought one of the cards, you can walk right out, type "goplayp.com,' it'll connect to the browser," said Darryl Williams, PlayPhone's director of operations, explaining the company's display at the CTIA Wireless 2006 convention.

By logging on to a Web site from a mobile phone or computer and entering the code number on the card, buyers can use credits to send content to their phones or a friend's.

For major carriers, such "off-portal" activity can mean serious lost income in revenue-sharing or fee deals. Nearly $1.4-billion globally, or about one-third of digital content sales, went off-portal in 2005, according to Qpass Inc., which provides billing services for mobile commerce. And the off-portal share is growing, Qpass said.

Mobile carriers defend the deals, saying they can ensure the ring tones and games will work on their various phone models.

"Our first suggestion to customers is to search our site, because it'll work the way you're expecting it to work," Ritch Blasi of Cingular Wireless. "If you go outside and that game doesn't play right on your phone, that's not something I'm going to guarantee."

Analysts said such deals have helped carriers prevent sales of pornography.

At this month's wireless show, Cingular announced tools for unsigned artists and bands on the popular social networking site MySpace to turn their music into ring tones that can be sold through Cingular, a joint venture between AT&T Inc. and BellSouth Corp.

Verizon Wireless, a joint venture between Verizon Communications Inc. and Vodafone Group PLC, announced content from Cartoon Network and Turner Classic Movies for its VCast subscribers.

Although having products listed on a cellular carrier's home portal can mean vastly better exposure and higher revenues, analysts said consumers may have a tough time navigating through a jungle of clicks to get what they want.

That's where off-portal mechanisms can shine.

Tuong Nguyen, a Gartner Group analyst, said more companies are finding ways to deliver mobile content without making consumers sift through cumbersome menus.

"There's a lot of content out there that's really hard to find unless you're the promotion of the month," he said.

So instead of going through operators, he said, "you see a lot of players in the market doing their own marketing in magazines or online or whatnot."

Most off-portal activity comes through so-called Short Message System aggregators, companies that pool content and deliver it in response to text messages sent from phones to five-digit numbers. The method of texting was popularized as a way of voting for the smash-hit TV show American Idol .

But the mechanism has one hitch: Content providers must advertise which product they will send in response to which text message and code.

"It's up to them to go and advertise that code, and you can do that via Web sites, through print media, through television," said Rick Saunders of Simplewire Inc., a Southfield, Mich., company that has expanded use of such services.

Ki-Bi Media Technologies Ltd. of Tel Aviv wants to help consumers find exactly what they want with a music-playing electronic card.

Dialing a special number and then pressing one of several buttons on the card releases a series of harmonic beeps that directs a server to send back a direct link to a song, image or game download.

Ki-Bi CEO Roni Raviv said the physical card format can help consumers see the brand they want for otherwise virtual items.

"I like Madonna. Normally, I don't see it. I don't even know I want it," he said. "With this card, I see it, I want it and I buy it."

The company plans to launch its service in the United States soon, expanding it beyond Israel, Britain, Singapore and Canada, he said.

Lexington, Mass., startup company Mobot Inc. said it is developing image-recognition software that will, in response to a camera-phone image sent of a CD cover, return a link for downloading those songs for a fee.

"It's an easy way for those off-portal guys to get their content to a consumer," said Mobot vice president Mark Brees.

Simplewire's Saunders predicted commerce delivered via text message will hit the big time when it's used not just by teenagers looking for images of Britney Spears, but by businesses to widely distribute documents.

One Simplewire display even showed a vending machine spitting out a soda can in response to the word "Coke" messaged to number 10958.

"It's where the future is," Saunders said. "It shows where it could go."

[Last modified April 17, 2006, 07:43:52]