appConfigEntityId

bodyType

customContents

entityId

entityUuid

isVideo

articlePageQuery

article

articleSchemaContent

content

hooksArticlePageAdvertisementConfigArticle

appConfig

filter

json

liveArticle

Sex, which fostered internet innovation, may drive 3G uptake

Sex, perhaps the best money maker on the internet, could help ensure the success of its mobile off-shoot this year.

Consider for a moment a few of the innovations pornography has brought to the internet: high-resolution photographs, streaming video, online payment systems. It takes little stretch of the imagination to envision a similar role for adult content as Hong Kong mobile-phone players begin to offer third-generation (3G) services.

'Sex and gambling could just be the killer applications in Hong Kong,' one manager at a mobile firm said.

Juniper Research senior analyst Paul Skeldon  said: 'Adult content for mobile phones is widely tipped to be the catalyst that drives the acceptance of mobile entertainment on mobile devices. After all, adult content has driven the mass market uptake of video, the internet and DVD.'

Indeed, 3G players are already betting sex will be just the thing to get sales up quickly. Hutchison Telecom, which is expected to launch its 3G services this month, has teamed up with Playboy Enterprises to offer adult content.

The global deal gives Hutchison 3G subscribers access to more than 13 million photographs and 2,000 hours of video from Playboy.

Non-Hutchison subscribers do not have to wait for the company to roll out 3G services. The website 3Gsexclub.com allows 3G users in addition to GSM and GPRS customers to download hard-core fare to their handsets.

There is little doubt sex will be a big business for 3G. According to Strategy Analytics, the market for mobile adult content could be worth US$1 billion by 2008. Another estimate from Visiongain was more optimistic, putting the market at $4 billion by 2006.

This will help ensure the transformation of the mobile phone from a communications tool to a new entertainment medium.

And like the internet, much of the initial innovation could be driven by purveyors of porn and other vices. According to reports last year, Hong Kong brothel managers were exploring the possibility of using 3G technology to send videos of prostitutes to prospective clients.

The availability of truly mobile, high-speed data downloads is also likely to create new businesses, and like the internet, some of the most profitable ones will at first be sex related. Think phone sex. Now think video-phone sex.

'If people pay for interactive voice sex services, they would be more willing to pay to see it,' the mobile firm manager said.

Mr Skeldon expected many consumers of adult services would be 'habitual' users, presenting opportunities to capture recurring revenue streams.

Already the growing popularity of camera phones is leading amateurs to produce do-it-yourself content, like in the early days of the internet, he said. While this does not make money for 3G carriers, transmission of the data does.

The use of 3G handsets by amateur producers should also lead to the rise of third-party content providers. Should the trend develop in Hong Kong, this would help drive up data usage in a market where about 95 per cent of industry revenue presently comes from voice traffic.

'It is a short leap before this becomes commercialised as it has on the internet,' Mr Skeldon said.

But sex is not the only vice on offer. Gambling could be another major source of revenue. Hutchison will provide English Premier League video clips, enabling local football gamblers to access highlights on matches.

Juniper Research forecasts casino style games, lotteries and sports betting could generate as much as US$16 billion in global revenue by 2008.

A large chunk of this is expected to come from Asia due to its demographics, especially when it comes to lottery games, which rely on huge pools of players to succeed.

'There is, however, a caveat,' Mr Skeldon said. 'All this is dependent on regulatory frameworks in the various regions.'

RUDE AWAKENING

Types of adult mobile services

Text based: Simply sending rude and suggestive text messages to someone who has paid to receive them is the most basic form of service.

Image based: While there is a lot of early money to be made in the delivery of erotic texting, flirting and chatting, the addition of pictures can only be of benefit.

Video based: The Holy Grail of the industry has to be the sending and receiving of moving images, and this is not too far away, thanks to 3G.

Types of mobile gambling services:

Casino-style games: With colourful graphics, the games allow users to play poker, roulette, craps and black jack on their mobile handset.

Lotteries: Juniper believes that lottery-type services will explode across all regions of the world within the next five years and generate vast revenues.

Sports betting: The final strand of the gambling tether is that of sports betting, whereby players bet on the outcome of sporting events such as football or horse racing.



Porn and profit make cosy bedfellows