Adult education for cellcos

21 Mar 2006

The mobile adult content market could be worth up to $2.1 billion globally by 2009. However, assuming that security and legal issues can be managed, the real money for cellcos may not be in hosting porn, but in letting the content providers help them generate data traffic

One of the telecoms/IT industry's worst-kept secrets is that end-user adoption of media-driven technologies can almost always be credited to adult content. Which is to say pornography. Pick a category: VHS, DVD, pay-per-view TV, CD-ROM, PC games, BBSs, the Web. All of them were significantly driven in the early days by porn. Even in voice telephony, sex was generating serious dollars via phone sex lines where callers pay by the minute.

Then there's mobile. Somehow, the cellular industry has managed to grow into a multibillion dollar global business with over two billion subscribers with virtually no assistance from the porn industry. Voice, SMS and roaming have been the killer apps for mobile, and still dominate the books in terms of revenue generation. Even as cellcos add mobile data to their service portfolios, the hot download items have been ringtones, logos, wallpapers and games, few of which could be reasonably considered sexy.

The reasons for this aren't too hard to work out, as it happens. Porn comes in all forms - images, text, audio and full motion video - but modern porn is primarily a visual medium, and mobile technology wasn't optimized for visuals until recently, says Tim Clausen, director of wireless technologies at Private Media Group.

'We tried the mobile space a few years ago, but no one was really serious about it,' he says. 'Most handsets had black-and-white screens, and there were a lot of serious technical challenges to doing things like streaming video. We were a bit ahead of the times.'

Now that color screens are the norm and video streaming has advanced enough to run comfortably (if not always smoothly) even on 2.5G systems, the times appear to be changing. By many accounts (albeit mostly from adult content providers), 2005 was a watermark year for mobile porn. Big name media brands like Playboy, Penthouse, Hustler and Private Media all have mobile divisions now. Content has evolved from wallpapers and SMS to richer content like interactive apps, Java downloads and video clips.

The arrival of 3G and more feature-rich handsets is creating other new possibilities. One example is 3OOOH Mobile Entertainment, which launched a two-way video chat service last month that is essentially video phone sex (where not only does the customer see the woman he's calling, but she also sees him) billed per minute at premium rates.

Indeed, video is the Holy Grail of adult content, and evidence arrived last year in the form of the video iPod, along with the subsequent flurry of interest from adult content providers. For many players, the video iPod is viewed as a proof-of-concept that given enough disk space and bandwidth (and an iconic design team), mobile video has a paying audience and a lucrative future - and porn will lead the way.

Even so, hype and real money are two different things in the mobile business, and for all the buzz on adult content, its success is by no means a sure thing just yet. There are still a few barriers to be overcome, and they have nothing to do with the size of the screen.

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