News
Issue #2003 - 14 (April 2003)
(Updated Apr. 23, 2003)

MARKET OUTLOOK

Strategy Analytics - Adult Entertainment Won't Sell Much Wireless

Strategy Analytics, the wireless market research and consulting company, today released "Wireless Porn Opportunity Limited to $1 Billion in 2008." This report from the Strategy Analytics Wireless Internet Applications (WIA) Service, notes that adult community services, such as those recently announced by AT&T Wireless and Match.com, will ramp up quickly, boosted by the growth of the camera and videophone markets. Although skeptical of the revenue potential that streamed or downloaded adult services offers to wireless clients, the report further recommends that carriers must move swiftly to capitalize on their core messaging strengths by bundling branded dating applications into their service portfolios.

Senior Analyst Philip Taylor notes, "We believe the advantages of the mobile phone as a personal and discrete device for viewing pornography are overstated. The value of the mobile channel to the porn industry will be greater as a CRM-tool than as a distribution medium."

Speculation as to the potential offered by wireless adult services is often based on the premise that fixed Internet pornography providers are raking it in. Strategy Analytics disputes the often cited figure for global adult entertainment revenues of US$20B, and believes this figure is actually closer to the $4 billion mark, of which only around $500 million will be generated on-line.

David Kerr, Vice President of the Strategy Analytics Global Wireless Practice, adds, "This is less than half of the value of the ring tones market in Western Europe in 2002. We believe that, with so much pornography available for free on the fixed Internet, demand for adult material will continue to be largely met by fixed Internet services." Kerr further states, "Carriers must not allow themselves to get sidetracked, and must focus on implementing applications infrastructure platforms and business models that will open up mobile to media and entertainment industries, including adult entertainment, as swiftly as possible."

MobileInfo Comments and Advisory: Strategy Analytics is right in dissuading wireless carriers going in the direction of adult entertainment business for economic reasons. We support that thinking on both economic and moral grounds. When the industry has few discretionary CAPEX dollars, it should not go there. 

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