Le marché du divertissement mobile
par CARTOON (European Association of Animation Film)
- Jacob Møller, Président de Kiloo, fournisseur danois de contenus et jeux mobile, a présenté les stratégies et les opportunités du marché du divertissement mobile à Cartoon Master (Digital) 2008. Depuis son établissement en 2002, Kiloo a produit de nombreux jeux de grande qualité.
Cet article est disponible en anglais.
Founder and chief executive officer of Kiloo
ApS, Jacob Møller created Kiloo in 2000 after working
for a number of years as a programmer.
Since then Kiloo has grown incredibly, becoming
one of Europe’s most successful publishers
of mobile games and entertainment.
Kiloo’s
«Hugo The Troll» games, based on the successful
cartoon series have sold over 2 M copies
and the company is the exclusive global partner
with LEGO™ for mobile games.
How is Kiloo’s distribution network
composed?
Kiloo’s distribution network consists of more than
80 direct distribution channels (operators, media
channels and aggregators) globally. The revenue
model is pay-per-download or revenue share. We
have several prices, according to the content. The
average pay-out per download for content is as
follows:
> Games between E UR 1.00 and 1.50
> Video between E UR 0.35 and 0.45
> Personalisation between E UR 0.25 and 0.35
> Games are the biggest earners of these three categories. Users
pay between E UR 5 to 10.
What is the development cost for a game?
The average cost is between 500,000 to 700,000
euros. We spend 15 to 20% of our budget in testing
and distribution.
Mobile content is a high-volume market. You need
to have successful content that can be sold more
than 500,000 times in its lifetime to be profitable. You need to have a significant distribution power
in order to achieve this result.
You need to develop a high quality product, but you
need to bring an appealing licensing to it. The operators
are getting more and more selective on the
products they launch and the space is quite limited.
Producers need to be prepared for a long billing
cycle before they can see return on investment. When
a consumer buys a product it may
take between 9 to 12 months before the company
receives the proportion share of that download.
Who dominates the market?
The mobile entertainment market is an operatordominated
market. The main revenue comes from
the operators. There are a handful of media channels
who are doing fairly good numbers in terms of
downloads and revenues.
Which is the distribution model you use?
The typical distribution model is as follows:
On the left side we have media channels, operators
and handset manufacturers. A bove Kiloo we have
a content aggregator who is in contact with the
same channels. You can say that we are competing
with the same costumers, but it is a volume market
and you can’t really consider them as competitors.
What you have to avoid when establishing a distribution
network is to make sure that the aggregator
is not aggregating content to other aggregators,
because at the end of the day you get a split
which is not a significant amount of money.
There are no systems in place to track where your
content has been placed. It is a system which is
based on trust between aggregators and content
providers… It is important for content providers to
be selective about who they are working with.
Which are the key territories?
In Europe the main territories are UK, Spain,
Germany, Poland and France. It is a very fragmented
distribution market with more than 40
major operators, media channels. Fragmentation
means that they tend to have certain requirements
in terms of how they want the content to
be delivered.
In the US there are four major operators (Verizon,
T-Mobile, AT &T, S print). The operators are working
with different technologies and have their own
walled garden.
In Asia the main markets are China, Australia,
Indonesia, Philippines, Thailand, Korea and Japan. The last two countries represent significant markets,
but extremely difficult to address because
they have their own way of thinking content.
In which direction is the market going?
Juniper Research, a market research firm, estimates
in its June 2006 «Mobile Games: Subscription &
Download, 2006-2011» report that the worldwide
market for mobile games will grow from $3.1 billion
in 2006 to $10.5 billion in 2009, a compound
annual growth rate of 50.2%. PWC predicts in a
recent report average annual market growth rates
of approximately 15% up to 2011.
Personally I do not see 50% of growth… What you
hear from the market operators is that the growth
is closer to 10-15%.
Another factor is that we have an extreme amount
of consolidation in the market. Lots of companies
are closing, others are merging… the market is very
turbulent. From our perspective, we have been following
the organic growth route since day 1. We do
not feel the same turbulence of the market.
I think there is a need for more consolidation to
get out of the turbulence.
Do you think that the model
can be ad-sponsored?
Yes, I believe that the operators are not the right
commercial partners for distributing content in
the long term. Operators are technological facilitators,
they know nothing about content. We need
new commercial models in order to monetise
the content. Ad-funded can be a good model to
exploit content on mobile phones. You could have
an ad at the beginning of your video and have a
broader market, as the content would be delivered
for free. Research shows that people are interested
in content, but they are not really ready to pay for
it. A lot of people play games on the phones, but
ultimately they do not pay.
What are the technological challenges?
There is a battle between Flash and Java formats,
like the one we experienced ten years ago between
the same two formats. The advantage of Flash is
that it is easier to develop and the budgets are
smaller. I believe Flash will have a good position in
the market in the next years.
What is the consequence
of the handset fragmentation?
We have more than 500 devices, different displays
and ways of navigation. When developing a game,
we have to take this into consideration from the
early stage of development. We face a real challenge
to get the games on all handsets.
For content providers, do you need to have
massive hits to have a profit?
Not necessarily. What you need to consider is the
cost of having your content distributed on mobile
phone. The most important thing is to have a feeling
of the industry.
What is the profile of the users
downloading the content?
Our audience is the younger generation, the ones
that are using the phones. For a football game
developed with SEGA, our audience is between 6
to 16. The industry lacks information on precisely
who the audience is. It is a problem because you
cannot tell potential advertisers who you are
targeting. The big companies do have this kind of
information, but this is not open to the public…
Cartoon Master Murcia, Spain, April 2008
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