ISA 2011: Live-Blogging Growth and Monetization on Mobile Social Platforms

In our fourth panel of the day, Matthaus Krzykowski is moderating a panel on the growth and monetization of mobile platforms.

The panelists:

Martin Essl, Strategic Software Partner Management, Sony Ericsson
Anil Dharni, Co-Founder, Funzio; Founder, Storm8
Jason Oberfest, VP Social Applications, ngmoco:) (now part of DeNA)
Asokan Thiyagarajan, Dir. of Platforms & Tech. Strategy, Samsung
Matthaeus Krzykowski, Founder, Xyologic

The live transcript (paraphrased in parts and edited for brevity)

JO: The platforms are just in different stages of evolution. If there are a hundred million devices, there’s definitely a smaller footprint. We’re making a bet, long-term, that we’re at a special point in time. Unlimited data plans may be coming, localization, and the capability and usability of these devices being where we can build what we want to. Those things combining we think will create an unbelievable growth period for mobile.

AD: The more you spend, the costlier it gets. The flipside of this on the mobile side, what we noticed is, there’s so much inventory coming in, and so many free to play games coming in, that the cost of user acquisition is not scaling up, and you can have a business model to support that. Today, if I had to have a model of what it looks like on Facebook for the next six months, it’s hard to estimate that. The window on mobile is predictable right now, but it might change in the next six months to a year. I think the time right now is pretty good.

MK: Tell me about 2010. How does your job change this year?

AT: We announced two big things last year. One was social hubs. Today, you take an app-based approach. If you want to call a friend from an app, you have to go back to your contacts. What we did is, you can link in your contacts to various other apps. If a friend calls in and he posted something on Facebook about being in Dallas, it can show that. So you bring in a seamless, integrated experience. The second thing we did was bring in the media hub, where we allow users to download full-length movies on Samsung handsets. The idea is to move them across devices.

MK: That was 2010, right? How big will all this be this year, what are you working on?

AT: Last year a lot of work was done on things done from the handset, getting data in. We’re trying to see how we can best optimize data usage on the handset. Moving to a model where we’re pushing data in a very optimized way. Because of this model, let’s say you’re getting data from five networks at once. So we’re working to get 80 to 90 percent optimization of the data coming into the handset. This is good for both operators and users. For the user, it’s the battery. Last year I carried two or three batteries with me.

MK: Martin, the App Store came along and your job became obsolete, right?

ME: I don’t think obsolete, and I think the device manufacturers are underestimated in many ways. At Sony Ericsson, we’re looking at what else we can do for developers — tutorials, SDKs, we provide additional hardware features that may allow new usage features. We can promote you in different channels.. we’re not so much interested in pre-loading anymore, by the time we have a phone in the market, the apps could be obsolete.

MK: Can you elaborate on deep integration:

ME: Deep integration is something you’d see much more going forward. That doesn’t mean you’re replicating what Facebook does, but that you’re utilizing Facebook’s social graph. We want to surface features much better for the user. Another thing is that we’re doing a lot of marketing, for Foursquare for example, and integrating that..

MK: How do you feel about Android?

JO: We’re very excited about Android. We see it as a big growth opportunity — we’re happy with the devices, with the distribution, and how the content looks on the devices. There’s no doubt that you need good acquisition channels.

MK: Why do you need to connect Facebook to Android?

AD: There’s a short term take and a long term. DeNA and Ngmoco are long-term, and that makes sense. But if you’re acquiring a lot of users on Android, they may not be paying much. You may need backers. The real winners will be those that time it right, and there’s still room for new winners to come into the market. In terms of social, we actually haven’t seen much success with people who have apps on the iOS and try to force users to connect with Facebook. You can look at any of the apps that have Facebook integration and look at their reviews — people are just bitching about being connected to Facebook. People on the iPhone hate when that’s the only option. I’d say, if you’re thinking about it, fine, but it doesn’t have to be in version one of your apps.

JO: You have to enable users to source relationships and contacts from where they want to do that. There are certain games and apps that lend themselves to it. In other games, it’s much more about meeting someone for the first time in the context of the game. It’s a question of good product design.

MK: I think there’s a consensus that the most important thing Facebook has done is single sign-on. You have companies like Loopt where Facebook is giving a userbase and you innovate on top of that. How big is Facebook single sign-on for you?

AT: My take on it is that it’s still in its infancy. We don’t see mobile as just Facebook. We see it in other segments as well. There could be other social networking taking place in other parts of the world — in Korea there are other things going on. We don’t see Facebook as the single conduit for single sign-on. But we are following trends in the market pretty closely, and will make some decisions in time.

JO: Facebook has done a good job of providing the platform in a more granular way. Facebook may be a good source of contact information, and free-to-play game is an ongoing relationship with the user and having the ability to contact them is important. In some cases it may make sense to use Facebook as that channel.

AD: All I’d add is the game perspective. For games, I think the analogy is very similar to why real-time interactions on Facebook don’t work, they’re not online at the same time and probably don’t want to play the same games you do. I’ve got a million people available, but how many have an iPhone and Facebook at the same time? Suddenly the userbase shrinks. It’s just an add-on.

ME: We understand that Facebook isn’t strong in every market, but we do see in Sony Ericsson’s markets that Facebook is usually the primary network. To me, it’s not a question of who is the social network, Facebook is the social layer that’s on top of everything. For our devices, they’ll all come with Facebook single-sign on pre-loaded. In the next couple months you’ll see it coming.

MK: Let’s talk about why that’s relevant.

ME: We encourage developers by promoting Facebook single sign on so when a user authorizes it, they don’t have to enter a username and password anymore.

MK: [What about the Playstation phone?]

ME: I can’t comment on that.

MK: Give me some examples of what you’re working on and the coolest use-cases you see.

AT: There are multiple touch-points in a connected home, so we’re looking at use cases. Let’s assume you’re driving your kids and they’re watching a movie. You reach home, turn off the movie, and turn on your TV to watch it there. You bring your tablet with you, and say, here you go — it’s streaming from the tablet to the TV. Getting a bit more social, let’s say you’re landing in an airport and want to tell your wife you’re coming home. So you can say you want to share your location for the next hour, and she can turn on the TV and see exactly where you are. (Audience laughter.) I know there are a lot of discussions around privacy, but these are the use cases. Let’s say you’re watching TV and the washer finishes its cycle, it could tell the TV. And social dating applications, based on your profile, where you are and what you’re doing, location-based dating is possible. What we’ve been trying to see is to make sure this integration becomes seamless.

Audience question: You see a lot of companies going from Facebook to mobile — when do the mobile companies take their apps to Facebook?

JO: All of the new game tech we’re building is on the idea that you build a single codebase for multiple distributions. We’re ready for that today.

Audience question: We’ll have all these access points — what are the opportunities or risks based on designing your game for a particular access point? Not just that it’s a bigger screen, as with a computer or iPad over the mobile device.

AT: The first thing is, I deal with a lot of developers on a day to day basis. Data has become very big in 2010 in the US. If you’re building a data-intensive app and take it to the Asian market, it’s not going to work. You need to be careful to make sure you’re targeting the right audience. If you don’t do that, you might make a good solution without any takers.

ME: Basically you need to understand the market you’re going into — demographics, context and the device you’re targeting.

Audience question: Do the lack of in-app payments in Android account for its lack of success?

JO: Yes, it does…

MK: I think that 98.4 percent of all downloads on Android are free now, so everyone is waiting for in-app purchases.

Audience question: You said it seemed like common sense that user acquisition would run into a barrier in six months, what will make that happen?

AD: I think as more and more advertisers come into the space, there’s only so much of a pool on these devices. There will be a place where Android will start slowing. It’s exactly what has happened on Google Ads and Facebook — when that happens, the economics will change, and I think that’s six months to a year away.

Audience question: I don’t think Flash will work on mobile, so what path should Facebook developers take to mobile devices?

JO: We’ve addressed that by focusing entirely on Javascript as a development environment. We were unsatisfied with where HTML5 is today, it’s not comparable to the experience in native UIs, so we’ve built a framework that plugs into the native UI.

AD: Don’t let that slow you down. There are enough genres that you can succeed with just HTML and Javascript, and there are companies that have been successful with that. You can look at with the space and figure out where you need to go native, and where you can do HTML / Javascript.

Audience question: Have you seen any example of a title that has crossed over between mobile and Facebook?

AD: I don’t think anyone has proved that it works. They’ll be successful on just one platform. The audience is different, the play style is different and usage patterns, the genres that succeed on Facebook might not on mobile and vice versa. That’s why we started Funzio, to prove that it can work.

Audience question: What kind of technology can you recommend for mobile to make a social experience less intrusive?

JO: I think it just depends on asking for the right amount of information that’s in context of what the user’s expectation is. Facebook, for example, gives you a lot of flexibility in how you use their platform. A lot of people don’t think about that as much as they could, and optimize for it. A lot of it is about compulsion loops and the user understanding why you want them to do things.

Audience question: Will the Facebook app itself be pre-loaded on Sony Ericsson devices?

ME: Yes, that’s what it means, and we’ll incentivize users to sign in with things you’ll see coming later this year.

Audience question: How many devices have you sold?

ME: I think we sold nine million Android devices last year. Sony Ericsson isn’t that big in the US yet, so it’s something we’ll have to fight for.