Wednesday, September 23, 2009

I Wanna Party Like It's 1999: Let's Celebrate i-mode

I suspect that I'm gaining a reputation as a mobile cynic... as a curmudgeon, if you will. But guess what bitches my friends, I love me some mobile and I love me some mobile entertainment even more. OK, I'm a little bitter that it's almost impossible to generate a meaningful profit deploying a content service in mobile. Like, weren't we entitled to make bags of money in this medium post-dotcom? C'mon, with an intrinsic business model and a ubiquitous install-base... we were going to be printing it baby!... *Xanax kicks in*. Well that never happened. Anyway, CTIA is fast approaching and you know what?'s time to forget about practical concerns and celebrate! Let's celebrate 10 years of mobile entertainment and the service that launched this madness!

In February 1999 our Japanese friends at NTT DoCoMo, after spending half a decade and a shitload of cash ($10bil) on data infrastructure, launched a proprietary mobile internet service called i-mode and (stroke of genius) rapidly enabled all the handsets on its network to access it. It was, and still is, a very closed, controlled ecosystem... the AOL of mobile. But, like AOL did online in the US, i-mode did an amazing job of introducing a lot of Japanese consumers (who typically didn't have connected PCs at home), very rapidly, to the mobile internet. Perhaps, more importantly, it got them comfortable with the concept of paying for digital content like ringtones, emoji (graphics) & DecoMail (email animations). DoCoMo persuaded content owners to jump on board and make the service compelling by promising ubiquity and generously sharing content (not data) revenue (90%) with those IP owners. For those of us outside Japan, who were exposed to this, it seemed like the Holy Grail... and it was.

In six months i-mode had over 1mil subscribers, by August 2000 they had 10mil. Then, to make the service even super-sexier, in 2001 DoCoMo blessed users with the world's first 3G service (FOMA). By 2006 almost 50mil Japanese were using the mobile internet through i-mode and paying $2 or $3 each in monthly subscriptions for access to each of their favorites from a choice of 12k official, or 100k unofficial, sites. With an average i-mode ARPU of around $17 per month (including data fees)... that meant DoCoMo grossed over $10bil in 2006 from the service (it's over $15bil now) and paid content owners almost $2bil. Most of the content being consumed was local, but western companies like Disney, which was already a consumer products powerhouse in Japan, saw the opportunity early (mid-2000) and created a couple of character-based i-mode sites that quickly became very popular and, as mobile legend has it, Disney Mobile Japan was generating $150mil in annual revenue by 2005.

Frankly, it was the story of Disney's mobile success on i-mode, augmented with some European monophonic ringtone hyperbole, that got a cadre of the brightest young minds outside Japan (who'd been tumbling in the whitewash of the dotcom bust) super-excited about the business potential of content services on mobile phones. These individuals would go on to become the pioneers who created many of the companies, or their antecedents, that I write about on this blog. So thank you NTT DoCoMo, thank you i-mode, thank you Mari Matsunaga (inventor), thank you Disney for creating this frenzy and this fine mess. It's the funnest thing I've ever done.

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