Versaly Entertainment

You have heard it all before.  Gas prices over $4.00 per gallon.  Bread, milk, eggs and flour prices are surging in the past year at double-digit rates, according to the Labor Department. Milk is over $3.25 per gallon.  Escalating food costs present a greater problem than soaring oil prices for the national economy because the average household spends 2-3 times as much for food as for gasoline.

Where does that leave “entertainment” in the household budget?  Entertainment can include a night out at the movies, buying a DVD or CD, buying a ringtone or subscribing to a mobile video service.

Buying a DVD or going to the movies is a psychologically separate expense.  Money is taken out of one’s pocket and the event is mentally recorded.

Buying a ringtone, wallpaper or subscribing to a mobile video service is an incremental cost, not a separate transaction.  Psychologically, its part of one’s mobile phone bill.

Personally, my mobile phone bill runs between $93 and $98 per month.  It all depends on how many text messages I send and receive, if I call internationally or if I buy a new ringtone (yes, I do buy ringtones on occasion).  The monthly bill varies, but I feel it’s all the same…one bill with a bunch of details I rarely examine.

A few years back, I felt that ringtone purchases competed with CD and iTunes sales, but I feel differently now.  The incremental cost of a ringtone to the overall mobile phone bill has made ringtone (and other mobile content) purchases insensitive to the economy. One or two ringtone (or wallpaper) purchases do not substantially affect a phone bill.

Perhaps the economy is affecting a slump in entertainment spending.  I feel it’s a different reason.  I feel consumers are looking more closely at value received for a purchase…especially a purchase for entertainment.

I am hearing from Versaly’s distribution partners how sales have been down across the board.  Is this due to the economy?  I feel not.  I feel consumers are getting fed-up with poor purchase experiences, misleading “free” offers and bored with the same old content choices.  The mobile marketplace is maturing, the mobile consumer is getting more savvy and the electronic retailers are not keeping pace.  I am seeing the same content, the same shopping experience, the same marketing and the same pricing models.

Mobile video is an exciting new product…but most electronic retailers are not providing the right buying experience for that either.  It’s difficult to find, difficult to shop (browse content) and clunky to purchase and watch.  Artificially inflated monthly subscription fees…large enough to make one notice the increase on their mobile bill…is also stalling consumer adoption.  However, I feel consumers seek value.  A $15 monthly subscription fee is acceptable if the mobile video channel offers a lot of great content with frequent refreshes.  A $15 monthly subscription fee is unacceptable if availability is limited to TV reruns, news and weather.

The core mobile video user has grown up in the age of the Internet and is much more aligned to the Internet video audience, and not the TV prime time audience.  As such, mobile video services should take notice of the kind of videos offered on the web, how they are presented, how they are marketed and how they are sold…and offer more content and a user experience like that on mobile video services.  With that, the mobile video user will see value and continue to purchase the monthly subscriptions.