About $256.6m of these sales came from text-based content and the remaining $407.5m from rich media, but the total equated to about 6.4 percent of the total mobile entertainment market. By 2005, however, revenues are expected to pass the $1bn mark and hit $2.1bn by 2009.
Strategy Analytics, meanwhile, is more bullish. It upgraded its growth forecast in March this year to predict that the market would rise in value from $400m in 2004 to $5bn in 2010. In its original calculation, it had valued the sector at $1bn by the end of 2008, but indicated that usage levels over the last 24 months were higher than expected.
Thin film transistor
Industry analyst Nitesh Patel, attributes this growth to four
factors. The first is the increasing use of multimedia-capable handsets
with high-quality Thin Film Transistor displays. Such devices are
expected to account for 82 percent of all sales in 2010 compared with
55 percent in 2004 and this is "dramatically improving the credibility
of content offered over mobile".
The second issue is the fact that a growing number of established adult entertainment players such as Playboy, Private Media and New Frontier Media are starting to deliver their content to mobiles. Private, for example, is working with a raft of content aggregators to sell and update adult content on a range of mobile operators' sites or via their network portals, which provide links for customers to access content provided by third party providers.
Negative sentiment
The fact that network operators are able "to benefit from adult
services sold by third parties, while shielding their own brand from
any negative sentiment towards adult services" has acted as yet another
driver for growth, according to Patel.
Private Media has ambitious plans for mobile and is planning to
launch its own web portal at wap.private.com to enable customers to
purchase games, images and other content by credit card. A new service
in January next year will see Private "acting as the Jamster of the
adult business" according to Tim Clausen, the company's director of
wireless technologies, who joined the organisation from T-Mobile in
May. Rather than providing downloadable ringtones to mobile phones, the
organisation will offer customers access to Java games, animation and
SMS chat via its three web sites — privateclips.com, privatespeed.com
and private.com.
Another factor pushing the growth of mobile content delivery,
relates to growing legislative demands for content classification and
age verification schemes. "I was at T-Mobile when this was introduced
and I thought it would be a real barrier, but age verification in the
UK is great for us. Our revenues have exploded because it means that we
can now show more explicit stuff rather than just page three level
content," says Clausen.
Reputation for innovation
Much of the current innovation coming out of the sector is not so
much sector- as vendor-led, he says. "Maybe it seems like the adult
industry is driving innovation, but it's the vendors that drive it
because adult is a category that's in high demand. So when people have
a new product such as video or SMS chat, they offer it to the adult
world because they know they can make money from it."
According to Clausen, the adult industry's reputation for innovation
has been derived less from developing new technologies itself, but more
from "using products in a clever way and making them available".
And, as with many things, the easy things are often the best, says
Clausen. "The most money is always made with easy products because
people use them. They're not saying where is the next innovation going
to come from? They just want some excitement because they're bored or
whatever, so they'll use SMS chat or video because it's easy."
