4iP Blog

M:metrics published a report earlier this year about how people use content on their mobile phones. It made for some interesting reading.

The excellent SMS Text News blog (http://www.smstextnews.com) reported it thus: “M:Metrics has an interesting report recently on mobile music, stating that 83% of mobile music is sideloaded onto the device. M:Metrics ran the survey all over the world and found that in all cases, users preferred sideloading to downloading directly from their carrier, with the exception of the U.S. and Spain. It’s also interesting that the U.S. has the smallest percentage of the population actually listening to music on their mobiles, a mere 5.7%.

M:Metrics tracked more than just music, however. Here’s a few other interesting comparisons of the U.S. vs the EU:

- Accessed News/Info via Browser: US 12.6 percent, EU 9.1 percent
- Played, Downloaded Mobile Game: US 9.1 percent, EU 8.7 percent
- Watched video: US 4.2 percent, EU 5.1 percent
- Accessed Downloaded Application: US 4.2 percent, EU 2.6 percent
- Sent/Received Photos or Videos: US 20.5 percent, EU 27.5 percent
- Received SMS Ads: US 20.6 percent, EU 53.3 percent

The usage numbers are shockingly low - less than 10% of mobile users have downloaded a game for example, despite all of the marketing efforts of the mobile operators and mobile content industry over the last 8 years. The comment that 83% of all music on mobile phones is sideloaded (i.e. moved directly from a PC to the phone through USB cable, Bluetooth etc) was, for me, even more interesting - it shows firstly that consumers are getting used to the idea of transferring content between devices (thank you Apple iPods), but also that content increasingly ends up being used on devices other than the one you originally thought it was destined for.

One of the defining characteristics of the digital age is that great ideas often morph from something completely different. For example, Flickr originally being developed out of tools for a online role playing game or VideoEgg going from a way to allow people to manage video on the web into a leading online video advertising network.

For me part of the excitement of being involved in 4iP is that we are going to be backing some really interesting ideas at the start of their journey, but we don’t really know where that journey will end - the 4iP funded content will end up on different devices and used in ways we can’t yet imagine, and some of the businesses we back will end up with completely different (but hopefully exciting and sustainable) business models!

What is the best way to fund digital innovation?  That is one of the key questions that 4iP needs to test over the next couple of years.  We are setting up 4iP with a broad remit: able to fund anything from small development grants through project funding / digital “commissions” and even equity funding in the form of seed capital.

I should declare my background at this point.  I work in Channel 4’s Corporate Development group, which focuses primarily on investment and acquisitions.  I’ve been working with “new media” businesses for about 15 years as a consultant, entrepreneur, banker and in development roles in media companies (so I’m not sure this stuff is so “new” anymore!).  All of this means that I have to admit to a bit of a “commercial” bias.

Back in 2000 the answer to funding was simple – go out, raise some VC funding, and build a business.  Of course, not all of us succeeded at that!  Even so, the basic concept of taking an idea, creating a management team, developing a business plan and taking in investment for equity is a sound idea: with a company established and a good management team, equity type financing gives the flexibility to change and adapt the business as it develops. 

In comparison, a commissioning type structure (as an example “go away and develop/deliver this particular project/piece of content”) does not give that flexibility (unless you have a very understanding project sponsor) but can act as a catalyst for a business: delivering one piece of successful content can lead to further “commissions” – think of the growth of the independent TV production sector.

With 4iP we are going to be able to experiment with many different types of funding – the critical output is that we not only deliver some great digital content and services that inspire change in people’s lives, but also that we create some innovative businesses that will go on to grow, create jobs and sustain the UK’s position in what is an increasingly global digital economy.