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MySpace puts faith in mobile video  MOBILE ENTERTAINMENT 2009: MySpace recently took its online videos mobile via a deal with technology firm RipCode, which soon after secured US$12.5m in new funding. Jesse Whittock spoke with MySpace Mobile chief John Faith and RipCode CEO Brendon Mills. MySpace expects half its traffic to come from mobile devices in just a few years time, so the race is on to ensure users enjoy the same experience whether they are out and about or at home viewing on their desktop PCs. The social networking site, which along with its Fox Interactive Media siblings has come under increased scrutiny as parent News Corp attempts to weather the tough economy, has seen explosive growth in mobile. Delivering a keynote at the recent World Mobile Congress in Spain, MySpace CEO Chris DeWolfe said that of the company's total 139 million global user base, around 20 million were of the mobile variety. While this figure currently means around 15% of visitors to MySpace are via its mobile site, this represents a leap of 400% from a year ago, and the firm expects the steep upward trajectory to continue. DeWolfe was speaking days after MySpace announced a revamp of its mobile presence plus deals with Palm and Nokia - moves that it claimed made it the first social network to support every major smartphone in the market. John Faith, VP and general manager of MySpace Mobile, says that smartphones are driving some of the site's heaviest usage on the move, so it makes sense to make accessibility for such devices a priority. "Smartphones and pocket PC-type devices have higher computer power, better screens and full QWERTY keyboards. As a result of that we're seeing a trend that the average consumer of a mobile device expects more out of it. They're no longer saying 'We want something with just SMS and voice.' They want a richer, deeper experience," says Faith. Hence the deal MySpace brokered with Texas-based transcoding company RipCode in December, a move that will potentially allow for the entirety of the social network's web content to be accessed by mobile phones. "Where we are at the moment with MySpace on mobile is completing our 1.0 phase. We grabbed all the core components of our social network and put them on to the mobile experience. The introduction of RipCode and what we're doing with them really is embarking on the next phase," says Faith. "Phase 2.0 is about creating a richer experience through rich media, whether that’s music, TV or video broadcasts or enablement of geospatial web via location-based services. Those are all things that we're looking to have adopted in our product roadmap in 2009." RipCode CEO Brendon Mills is proud of the partnership. "MySpace is the second largest server of video on the internet right now. We take all their current files available on the web and make them available on mobile phones. It's a very large deployment and shows the scale of our system," he says. This scale was further highlighted when, a month after the MySpace tie-up was unveiled, RipCode raised a cool US$12.5m to fund its expansion, this second round following an initial US$10.5m injection. Mills says the firm has around 50 other customers that it is yet to announce. "Video is such a massive component of what's being pushed across the wire today. We think an enormous amount of opportunity surrounds that," he says. "MySpace probably has 25 million pieces of content available on mobile video right now and YouTube probably has 125 million. That's just an amazing amount of content. The arrival of mobile video has been a fast-moving development, and it will continue to get better." But the perennial question of where the revenue comes from is evermore pressing in the current economic climate, particularly for MySpace, as News Corp looks to address the US$6.4bn quarterly loss it reported in February. "We have not yet monetised our video streams," admits Faith. "We are in a beta phase with it but we are looking to get into that this calendar year. The barrier that we perceive on a mobile device is you're really looking for snack-sized information, and if you have that and user-generated content, what is the end-users going to think about you putting ads in there?" It's a problem cited by many within the industry. A 10-second video clip that's preceded by a 10-second commercial is a model that's unlikely to appeal, particularly in the UGC space. Add to this the fact that mobile advertising is still in its infancy and the prospects for MySpace to make cold cash out of video on the move looks slim. Even Mills admits it's a tough nut to crack. "The highest revenue is definitely coming from premium content services like iTunes displayed on mobile but the majority of video out there, especially on VoD, is UGC, and that's content that's really difficult to monetise," says Mills. "Luckily for us, people are still very interested in deploying mobile video, whether or not it's monetised." So which areas of mobile entertainment are generating returns for MySpace and how is this likely to change? "It's still in the balance," says Faith. "All of our products that we want to deliver are free and ad-supported. The ad-support mechanism can be a variety of things, not just banner ads. "We have had subscription-based models that have actually done very well in the past but it's just not in tune with where we want to go as a company in the future. We offer some of our branded channels that have more premium content and I think that’s the more natural place to start inserting ads on mobile, just as we do on MySpace Video." But despite the uncertainty around the monetisation of mobile video - indeed mobile advertising as a whole - and the added impact of the recession, Faith still has plenty of hope. "The mobile industry, unlike some of the others, is going to pull through this economic downturn," he says. "A mobile device is seen as probably the second most personal device, behind keeping a purse or wallet. It's something you have to have at all times. It's a necessity and people are willing to pay for it. We're going to have to tighten our belts a little bit, but as an industry, mobile will certainly prevail." Additional reporting by Jonathan Webdale. Jesse Whittock 4 Mar 2009 © C21 Media 2009 
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