The Middle Man In Wireless Content

When I started developing wireless content in 1999, it was easy to get a meeting with the top carriers in the US to discuss distributing my content. Granted, I was in charge of strategizing and building Disney's wireless efforts, so the carriers were fairly familiar with my brands (ESPN, ABCNews, Infoseek, Disney). But the important thing was that there was so little content available, that the carriers were asking for it.

By 2002-3, the situation had changed. The carriers were inundated with more content developer pitches than they could manage, and couldn't handle the relationship overhead, so they started looking to aggregators to reduce the number of relationships and to screen content. Thus were born players like Thumbplay, Jamdat, Infospace, Wireless Developer, etc. There were dozens of consolidations through 2006, as the larger aggregators who had carrier relationships held a huge amount of power over smaller rivals and simple developers. Essentially, these aggregators were leveraging the fact that they "owned" carrier relationships that no one else could get anymore.

Then, this year, the tables turned on them: Carriers realized the large cuts the middlemen were extracting, and started putting the squeeze on them. Meanwhile, the big brand content owners were squeezing the aggregators from the other side. Today, my friends at aggregators complain that the carriers are re-negotiating their contracts, and keeping a bigger slice. Turns out, the carriers don't want the complexity of managing hundreds of content relationships, but neither do they want to give a big chunk of money to middlemen, so according to Wireless Week, they are growing their internal content acquisition groups and bringing the work in house. This seems logical, but also scares me, because the US carriers have historically done such a bad job of screening, partnering, and aggregating content. If you're a carrier, you may disagree with me, but just lurk in the halls at any CTIA or Developer conference (hide your badge) and listen to what the developer community is saying about you behind your back: they hate working with you.

Consistent with this shift, Infospace is reeling in their wireless business, and considering re-trenching in their legacy online search business. Infospace had originally started out in wireless in the 2000s as an outsourced "WAP Portal" that managed all the decks and content for the carriers. Carriers slowly brought that role back in-house, but Infospace still managed to grow by morphing the portal role into an aggregator's role. It must be frustrating for them to have that role now taken back in house, as Cingular is rumored to do shortly. Infospace needs to re-re-invent itself in the wireless space, perhaps focusing on their strength in search. And they have the resources to do it, holding on to $400 million in cash despite laying off 40% of their workforce this month. Other aggregators will have to get out of the "middle" and either create, or go find creative talent and artists and contract to develop and market their content. They need to create, or do their own content "A&R".

Just where this leaves the mobile content developer is hard to say. Aggregators squeeze you, and are losing their valuable carrier blockade, but carriers don't truly have the resources to evaluate and add your content in an organized way. And that's just the biz dev hassle on top of the development hassle of every different platform and phone.

It's too bad the US hasn't seen the adoption of the democratic Asian model, where carriers put up just about all content available, and let the customers decide which is which is bad, which is good, and which belongs at the top of the decks. This model has worked wonders in Japan and Korea, and would work even better when joined by new emerging solutions in custom UIs, search, segmentation, and discovery.