Prepaid Wireless Interest Explodes at Virgin Mobile, TracFone, MetroPCS, Cricket, BoostMobile and Net10

Online visitors to six leading prepaid wireless sites grew 37 percent in the first quarter, compared to the first quarter of 2008, says comScore. The nearly eight million visitors represent more than four percent of the total U.S. Internet audience.

The six prepaid wireless sites include VirginMobileUSA.com, TracFone.com (América Móvil), MetroPCS.com, MyCricket.com (Leap Wireless), BoostMobile.com and Net10.com (América Móvil). 

Growth in the category was driven primarily by MyCricket.com, whose traffic was up 107 percent) and Boostmobile.com (up 105 percent), both of which more than doubled their traffic.

MetroPCS.com and Net10.com also experienced strong gains, growing 63 percent and 37 percent, respectively.

Although the marketing messages of most prepaid wireless providers target the youth market, prepaid wireless site visitation data suggest considerable interest in the plans among 35 to 64 year olds. In fact, the majority of visitors to Net10.com (60.3 percent) and TracFone.com (58.7 percent) were from this older age segment. 

Even for sites where the majority of visitors were under 35 years of age, such as Boostmobile.com and MetroPCS.com, visitors between 35 and 64 years old still comprised at least 40 percent of visitors to the site. 

While it is likely that some of this older skew can be attributed to parents purchasing phones on behalf of their children, the data nevertheless underscore the appeal of prepaid wireless beyond the youth market, comScore speculates.

Another key marketing inference can be made, though: sometimes having a clear "niche" message can rebound to a brand's overall sales. The perhaps-classic example is what Pepsi discovered several decades ago. Suffering in its market share battle with Coca Cola, Pepsi decided to rebrand as a cola for the younger generation.

You might think this "niche" strategy would lead to a limitation of market share. It didn't. Pepsi pulled even with Coca Cola. The implication is that a strong "niche" brand can pull other user segments along. 

That likely is the explanation here, as "youth" brands pull other demographics along on the strength of the value pitch.

In order to understand the marketing factors driving traffic to prepaid wireless sites, comScore also conducted an analysis of search referral activity. The results showed that while both paid and organic search are driving increased referral activity, organic search is substantially outpacing paid search referrals on the whole. 

This dynamic suggests that the underlying consumer demand for prepaid wireless services is not just being driven by paid search marketing expenditures.

A few of the sites performed particularly well in obtaining growth from organic search referrals compared to paid search referrals. 

Organic clicks to BoostMobile.com grew 310 percent, while paid clicks grew 119 percent; organic clicks to MyCricket.com grew 123 percent compared to 63 percent growth in paid clicks; and organic clicks to MetroPCS.com grew 148 percent compared to 17 percent growth in paid clicks.

http://www.comscore.com/Press_Events/Press_Releases/2009/6/Prepaid_Wireless_Services_Attract_Increased_Online_Interest_During_Economic_Downturn

Mobile Handset Market Bifurcates: Smart Phones and Low Cost Phones are Key

Annual sales of low-cost mobile handsets aimed primarily at consumers in emerging markets, with with possible implications for the prepaid segment, will grow 22 percent between 2009 and 2014, to over 700 million units, say researchers at Juniper Research.

In some ways the handset market is bifurcating, with interest focused both at the high end smart phone segment and the low end segment.

Efforts by industry players to lower the total cost of ownership for devices and services to below $5 are already reaping benefits in markets such as Bangladesh, Pakistan and India, Juniper Research says.

Meanwhile, players such as Nokia are developing invaluable content-driven services that will encourage first-time mobile users to keep on using their devices and improving their standards of living.

“With around 80 percent of new mobile users set to come from emerging markets over the next six years, it is essential that operators and vendors work together to dilute the price barriers associated with mobile technology and to provide ongoing support through the development of specific social and personal services, such as Nokia’s Life Tools suite," says Andrew Kitson, Juniper Research analyst.

The Africa and Middle East region will account for the largest annual shipment volume by 2014, with its 166 million low-cost handsets representing 24 percent of all sales that year and up by 54 percent between 2009 and 2014.

With smart phones projected to account for 27 percent of mobile device shipments in 2014 (up from 13 percent in 2008), the market is effectively polarising into two groupings: entry-level and high-end devices.

At some point, the broad trend should result in new options for lower-price smart phones, and that could open up new mobile broadband segments, including both postpaid and prepaid.

http://www.juniperresearch.com/shop/viewpressrelease.php?pr=143

134 Million Mobile Internet Users in 2013

There will be 134 million mobile Internet users in 2013, eMarketer now projects. Despite the global slowdown in new mobile phone sales, smart phone shipments will grow by 3.4 percent in 2009, International Data Corporation researchers project.

In fact, smart phone sales will grow three times faster than will sales of feature phones in 2010, IDC projects.

By 2013, Informa predicts smartphones will make up 38 percent of all handset sales worldwide, more than double their share in 2009.

“It is increasingly evident that for many marketers, mobile applications constitute a necessary avenue for reaching and engaging with their customers, either by building and marketing a proprietary application or sponsoring a third-party app,” says Noah Elkin, eMarketer senior analyst.

http://www.emarketer.com/Article.aspx?R=1007124

Shift from "Push Marketing" to "Pull Marketing" is Well Underway

It would be hard to name just one single reason traditional media are in trouble. In fact, there are several forces at work. Users are shifting attention to newer formats: getting news online rather than from newspapers, for example.

Then there is the shift of revenue: with classifieds now cannibalized by online sources, newspaper economics no longer are viable, as display ads and subscriptions always fall short of what is needed to product the product if classified revenue is pressured.

There are more subtle forces at work as well. "Push" marketing, which tends to drive display advertising, is not working as well as it used to. Other formats offer hope of better results, and most of those are Internet mediated.

Information richness now is the order of the day, so there simply are other ways to learn things, again typically mediated by Internet and mobile mechanisms. That means less "need" for traditional media.

Also, many if not most companies have discovered that the traditional media role has blurred. Companies can themselves become content creators, aggregating their own audiences. To a large extent, it now is true that "anybody can become a content creator."

That means less money will be spent on traditional advertising, and more on creation of content, which is the foundation for "pull" marketing. Instead of pushing messages at people who may be unwilling to receive them, companies are inviting users to participate by creating interesting content in various ways.

All of those forces now are at work.

Even Free PCs and Broadband Wouldn't Get People to Use It, Ofcom Finds

Some 43 percent of adults who currently do not have Internet access would remain disconnected even if they were given a free PC and broadband connection, U.K. regulator Ofcom says.

That's an important finding as it reinforces an important fact about broadband adoption: in some cases "access" might be an issue. But it is not the only issue, and might not even be the most-important issue.

If people don't want broadband, building more access facilities will not do anything to increase uptake.

The confusion is widespread. Many seem to assume there is a "broadband problem" in the United States because lots of people do not buy it. That's a bit like assuming there is a "Lexus" problem because more people do not buy them.

Product demand, not product supply, rapidly is becoming the main barrier to further gains in broadband use.

About 30 percent of U.K. residents do not use the Internet, Ofcom's survey found. About 20 percent of people without Internet access say they will start buying some form of Internet access within the next six months.

Some 42 percent of adults said that they had "no interest" or "no need" for the Internet. About 61 percent of such non-users are older or retired, and 61 percent say they never have used a computer.

For 30 percent of those currently offline the main reasons given for that choice was financial or lack of skills.

Some have proposed that subsidizing PCs and dropping prices, plus building more networks or adding more connections, would solve the "broadband" problem.

Ofcom says that may not be true.

When asked what would change their minds about going online, only nine percent said cheaper deals would be an incentive. Free training was identified by 11 percent as a behavior changer.

But the majority (58 percent) simply said they were "not interested" in having broadband or "don't know" what would entice them to buy it.

http://news.bbc.co.uk/1/hi/technology/8091398.stm

Cable Operators Should Worry About Hulu, Not YouTube

Hulu is a bigger threat to cable operators than YouTube is, argues Bernstein Research analyst Jeffrey Lindsay, who has been surveying hundreds of consumers about their internet TV viewing habits.

The reason is that most consumers typically indicate some willingness to pay for professional content, but few say they would pay for user-generated content. And that's where Hulu emerges as a strategic threat to other distribution formats, compared to YouTube, which remains a haven for the sorts of video people say they don't want to pay for. 

Hulu has rights to most of professional TV content, is getting viewer traction and most importantly has an advertising format brands understand.

The problem with YouTube is that much of the video is not the sort of fare most advertisers want their brands associated with. 

The majority of respondents polled by Lindsay said they would be willing to pay for professional content, for prices ranging from $1 for a TV show to $5 for a movie. 

But most would not pay for user-generated content. 

The Internet video seems well established, though. Some 74 percent of respondents said they watch internet TV on their computer monitors rather than connecting their PCs to the TV. 

Internet TV viewing might for that reason be viewed as ancillary to traditional TV viewing, rather than competitive. But users also watch shorter clips than on their TV, a 30-minute TV show or less in most cases.

http://www.washingtonpost.com/wp-dyn/content/article/2009/06/09/AR2009060900941.html

Video Will Be 90% of Consumer IP Traffic in 2013

By 2013, annual global IP traffic--driven principally by video--will grow more than 500 percent from current levels, Cisco now estimates. ideo. In 2013, the Internet will be nearly four times larger than it is in 2009. By year-end 2013, the equivalent of 10 billion DVDs will cross the Internet each month.

Cisco forecasts that 90 percent of consumer IP traffic, a majority of total IP traffic, will be video in 2013.

In 2013, Internet video will be nearly 700 times the U.S. Internet backbone in 2000.

Also, video communications traffic growth is accelerating. Though still a small fraction of overall Internet traffic, video over instant messaging and video calling are experiencing high growth. As a result, video communications traffic will increase tenfold from 2008 to 2013, Cisco says.

Real-time video is growing in importance. By 2013, Internet TV will be over four percent of consumer Internet traffic, and ambient video will be eight percent of consumer Internet traffic.

Live TV also has gained substantial ground in the past few years. Globally, P2P TV is now slightly over seven percent of overall P2P traffic at over 200 petabytes per month.

Video-on-demand traffic will double every two years through 2013, with consumer IPTV and CATV traffic growing at a 53 percent CAGR between 2008 and 2013, compared to a CAGR of 40 percent for consumer Internet traffic.

Cisco also predicts that mobile data traffic will also be overtaken by video, reaching 64 percent of total mobile IP traffic by 2013.

Cisco expects mobile video to grow from 33 petabytes a month in 2008 to 2,184 petabytes (or 2 exabytes) a month in 2013, which represents a 131 percent compound annual growth rate.

Peer-to-peer is growing in volume, but declining as a percentage of overall IP traffic, Cisco says. P2P file-sharing networks are now carrying 3.3 exabytes per month and will continue to grow at a moderate pace with a compound average growth rate of 18 percent from 2008 to 2013.

Other means of file sharing, such as one-click file hosting, will grow rapidly at a CAGR of 58 percent and will reach 3.2 exabytes per month in 2013.

Despite this growth, P2P as a percentage of consumer Internet traffic will drop to 20 percent of consumer Internet traffic by 2013, down from 50 percent at the end of 2008.