MMS Redux: Betting Against the Telcos
I was reading an article the other day about MMS pricing and it suddenly dawned on me how little idea the operators have about how they are pricing multimedia messaging. It's not based on any real profit model (i.e. "it costs x to send a message and we will then add y profit and get a result of z to charge the consumer"). These guys are just half ass guessing.
And that's when the feeling came to me. The business model surrounding MMS is *just* like those dot-com business models back in the late 90s. The one where step three is a question mark, just before profit. I'm getting that same back-of-the-neck tingling sensation when I read about MMS: Part of me is thinking "it's crap" but being convinced otherwise by fervent followers and businesses that "know what they're doing." But in fact, MMS as it's currently envisioned may indeed be a pipe dream.
I'm not saying that "Picture Messaging" is bad - that is going to be an unqualified hit, as shown already in Japan where more than 6 million subscribers use J-phone's sha-mail on daily basis. I'm saying that the implementation of multimedia messaging which is MMS may have serious problems.
Now claiming MMS is crap - and I'm not 100% sure that's what I'm saying, because there's so much "momentum" towards MMS right now - is completely in contrast to a lot of billion dollar companies out there backing the spec. Telcos like Vodafone and manufacturers like Nokia have all conjoined to make MMS the next "big thing." We have to give these guys some credit that they're not complete bozos, but then we have to take a look at the reality of what MMS is and try to decide for ourselves.
Here's the question: Is MMS a lame brained and ultimately doomed scheme by the telcos to replace SMS or is it pure marketing genius - a well planned and executed packaging of services for the non-techies - that will take the mobile world by storm?
It's easy to be a skeptic and say "it's baloney" and it's easy to be a follower and think that the billion dollar companies have to be right. What's not easy is to look at the big picture and figure out what's really going on.
The thing is that MMS meets a real need. SMS is great, but very soon people are going to want to send more than just the now famous 160 characters - and MMS was designed to do just that. However, that's sort of the first strike at MMS, that it was "designed." SMS wasn't designed for anything more than short updates about voicemail or other operator messages, it was the teens who converted it into the phenomenon it is now.
My thoughts are that other technologies that also weren't designed with mobiles in mind that will meet the need of replacing SMS in a better way than MMS, namely mobile email and chat. Handsets are getting more powerful and connections getting faster, it only makes sense.
What is MMS replacing, exactly?
First, I think its important to note that fact that SMS is used by some people as email: "how are you, we haven't chatted in a while, let's meet for lunch next week" "Sounds great! I'll call you." and by others (read: teens) as chat: "Hey Juan, we're going to the movie at 10, want to go?" "Yeah, what's playing" "I'm not sureï¿½ What have you seen lately?" "Nothing good - Where are you now?" etc. Some phones have even made chat-like UIs so you can follow the thread of conversation like that, and you can include multiple people in the message as well.
So another point is that MMS works on one level, the Email level, but does not work on the chat level because it's too slow (uploading to the MMSC server takes longer than just sending a quick SMS) and it's also too expensive.
Now, the thing about MMS is that it's included on every newer model color phone. But I've yet to see an MMS phone that also didn't have some sort of email client as well, though I'm sure there are a few out there.
A walk through
Let's look at how MMS works. At the very base, MMS is 3 or 4 different technologies smashed together and packaged together for consumer use. It combines SMS, WAP, SMIL and SMTP in a simple to use application for sending multimedia messages from your phone.
Here's a walk through of MMS from a consumer perspective: I snap a picture on my Nokia 3650, and choose the option "Send", I immediately am given 4 options: via Multimedia, Email, Bluetooth or Infrared. I decide to use multimedia (MMS) and am presented with what looks like an email form without a subject line - or maybe it looks like a suped-up SMS form if you're used to that context better. I then can enter a phone number (or as I recently learned, an email address as well, but that's carrier specific) or choose names from my address book. I can also add text and other attachments such as audio. As long as the total size of the message does not go above 100k (this is important), I'm good to go.
I then send the message. What really happens here is that my phone opens up a WAP connection to a special WAP server called an MMSC. It then sends the message via a WAP post - in a special package that's essentially a SMIL document with routing headers and footers. The MMSC then decides where the message should go. If the recipient does not share the same MMSC server, it will actually send the message via our old friend SMTP (simple mail transport protocol) to the appropriate MMSC for delivery. Once the message is on the appropriate MMSC server, it will send a special SMS message to the recipient's phone alerting it that it has a message waiting. This SMS message is called a "WAP Push" message and is supported via WAP v1.2.1 which is why all Multimedia phones must support that protocol. This is the same spec that allows operators to send your phone setup instructions and links to WAP pages. So, the phone gets the SMS message, and depending on the settings (at least on my 3650) it will then open up a WAP connection over GPRS to download the XML document to my phone in the background (this is a key point as well). When it arrives, it alerts the user that they have a message and then they can open it up the message and see the picture, sound, text etc.
From a commercial standpoint, the sending process is very similar, say if you wanted to publish comics or other multimedia content to be sent to subscribers. I downloaded the Nokia MMS SDK, for example, which will allow me to create the SMIL document which can contain multiple slides of images and audio, and also the various types of WAP messages that can be prompt the phone to download the message.
I actually have a lot of blank spaces in the commercial bit above because it's very carrier specific exactly *how* you provide MMS services. For example, Vodafone has created a generic SOAP based interface to all their mobile services. Once you become a partner with them, you use their API to send SMS or MMS messages, and they handle all the WAP alerts, etc. Other carriers are more "do it yourself" and others are very exclusive, walling off MMS as their own proprietary service.
Comparing MMS to mobile email and chat
Let me say that first, it's not a hands down winner for either side. It'd be nice it was, but it's more difficult than that. In fact, at first blush, it looks like it's obvious that MMS is going to be a huge success with consumers because of its integration and ease of use.
MMS has the incredible advantage of being installed everywhere and working more or less seamlessly out of the box (and if not, being able to have WAP configuration messages sent to your phone via the operator to get it working ASAP). Using email or chat as a substitute for MMS will require a lot more work on the part of the user. However, the advantages they offer may induce many people to go through that effort. The problem with this is that whereas SMS is the only game in town, if too many people are not using MMS for other more powerful or cheaper alternatives, this will *seriously* negate any model for MMS success in the future.
Another issue with mobile email and chat is that they are "pull" solutions, whereas MMS is "push." In other words, MMS messages can more or less arrive automatically on your phone as soon as you have an MMS phone in your hand, however email and chat sessions on most current phones needs to be initiated by the user. More on this in a bit, but it's a point where the integration advantages of MMS shine.
Email and chat are also completely non-standard. Some phones like the 3650 include a built-in POP3 and IMAP email client. Others don't have anything and a user would be forced to use some custom Java app and server solution. Chat, as well, is non-standard, and on many phones essentially impossible to implement because of the lack of the ability to install native apps, or the lack of proper sockets support in Java (if the phone even has Java). The reality is that these technologies will never be as ubiquitous as MMS until the telcos push the manufacturers to standardize as they did in the case of MMS (hmm, or was it the other way around? I'm not sureï¿½ I'll have to look this point up.).
Where there's a will...
Despite these shortcomings, newer generation phones make email and chat possible. And it's these phones that have the ability to undercut MMS. It would only take one really popular phone with email and chat capabilities to throw the future of MMS way off course.
For example, email and chat work on Series 60 phones very similarly to your computer. The email is installed already and integrated into the unified inbox. The other day on the way to drop off my boy at daycare, I decided to take a snap of Alex and send it to my wife. Instead of choosing MMS and sending the message to her phone, I decided to email it to her office email account instead. While I was at it, I quickly added a couple more addresses to my contacts lists of my parents and my brother and included those addresses in the message as well. The picture was sent around the world using the same exact time and effort as it would've taken me to send an MMS, *and* it didn't cost me any extra money. If Ana's phone had email set up on it (and an extra app to poll the POP3 serverï¿½ Series60 phones don't do this by default, again, as a concession to the telcos I'm sure) then the effect for her would have been as good as MMS. Maybe better, because should could retrieve the email in various places for easier archiving - especially on her Nokia 7650 where storage space is always at a premium.
There are several chat options available on the Series 60 phones and others as well. The one that I'm using most lately is Mobilways WirelessIRC for Symbian phones. However, TipicME is an incredible J2ME-based Jabber app with server-side connections to all the popular Instant Messaging systems. Using these apps to entertain while stuck somewhere on a train or waiting inline is as good or better than any mobile game available yet. Having experienced it first hand, I can guarantee that mobile chatting will be a massive hit with consumers. It's already a massive hit on the desktop and it translates seamlessly to mobile devices. Yes - using T9 (predictive text) it's quite possible to have an ongoing conversation via your phone for hours. And the Telcos aren't charging for each chunk of 160 characters (per se, GPRS charges, obviously do apply).
The problem, again, is notification. If I have my TipicME app running and I know Jim is commuting via train and has TipicME on his phone, there's no way to alert him with the app unless it's running 24/7. And the reality is that GPRS is *not* an "always on" technology. It's fast, it works, but it cuts out for a variety of reasons. Some apps like FastMobile's FastChat are very intelligent and can reconnect if there's a loss of service (and integrates with SMS). However the vast majority of phones and apps aren't at that level of sophistication yet, so you're forced to back track to SMS for that initial conversation. However, "soon" chat apps will be installed by default on phones and standards will arise to solve this problem, I'm sure.
The last comparison is setup. Setting up Email is a nightmare, especially if you're anyone who's not technical. First you have to know your POP3/IMAP username and password, your server name and your SMTP server. You need to navigate through a variety of menus to add the email and then you may not realize that your phone doesn't do automatic polling or you may have made a mistake typing all that info in and have to start from scratch (Series 60 does thisï¿½ ugh). Chat is somewhat better, depending on the system you use, usually all you need to do is remember your username. But still, both of these systems require a third party server of some sort (POP3 or Chat) and usually a sign up online, etc. Not particularly user friendly at all.
In my mind, the most important point about which type of service will become most popular is the costs involved. The fact is that the MMS plans don't seem to take into account any sort of competition! Neither with other operators (collusion, most likely) nor with competing technologies. MMS is just being priced as if it's the only way people will be able to communicate via their mobile phones, and it's just wrong.
How much does it cost to send an MMS message? Well that article I mentioned earlier talked about rating the cost of MMS based on perceived benefits as compared to SMS. Thus if your SMS messages cost 10 cents apiece to send, and your customers perceive MMS as being 4 times as useful, then you should charge 40 cents a message. Like I said before, complete half ass guessing.
Currently here in Spain, I'm paying 75 cents per multimedia message without a plan, and if I buy a 20MB GPRS credit for 30ï¿½, the rate drops to 25 cents a message. Unlike when I'm using my pre-pay phone to talk, I don't get a message that tells me how much it cost to send an MMS message. I've heard that up to 1ï¿½ being charged in other places and can guarantee those prices are way overrated. In order to compensate for these prices, Telefonica has made sure to keep the non-plan prices for GPRS waaaay up there so that in comparison, MMS seems cheap. This won't be able to play in the U.S. where the Americans are used to their $30 a month all-you-can-eat AOL accounts. In fact T-Mobile has already introduced a monthly data plan already. Look for that to spread (across the Atlantic, I don't knowï¿½ but it could happen).
But remember, these prices are per message, which really means you are paying per "recipient". For each person you send your MMS to, you get charged an additional message fee. That gets expensive really fast. Many phones are even designed to best charge the consumer - if you get a photo in your Nokia 3650 via MMS, for instance, and respond to it to say just "thanks", you are given a more expensive MMS message to send instead of an SMS, and are charged appropriately. Though I shouldn't attribute to malice what I can more easily attribute to incompetence, in this case I think it was a designed flaw. Like the inability to poll for emails, it's a nod to the telcos by Nokia. (I wasn't this much of a conspiracy theorist before I started getting into mobile stuff, I swear).
Also, here in Europe, receiving an MMS message is free, that's only if it comes from your carrier's MMSC. If you receive a WAP Push message to download a message from an alternative MMSC, you may have to pay the same as if you had sent the message yourself. This *could* open up a host of problems in the future for security and mobile SPAM.
My last comment is that it's important to remember the operators are gatekeepers for MMS in every way. If you want to send or receive an MMS, you need to have (and pay for) a phone number. If you want to commercially send MMS messages (by subscription, I'm thinking, not spam) you'll practically have to have a deal with every telco that your customers use. Right now interop between MMS is a joke - I can't even send an SMS from Vodafone Spain to Movistar and vice versa. The reason for this is because of the insanely tight grip the telcos have on MMS.
Email and chat, by comparison are completely open. Email may be too open, actually, which is why we get so much spam. But if I want to create a service that sends email updates, all I need is my own SMTP server, register a domain name and I'm done. In contrast, if I want to create a service that sends or receives MMS, then I need to deal with the telcos. To receive an MMS, you need to have a phone number which to receive it. To send an MMS, you need to make a deal with the carriers. There is hardly anything open about the process, and absolutely nothing for free.
The Final Analysis
I think in the end the carriers are going to realize that the good old days of SMS are over, that they are going to have to base their business plans on data rates from now on and not artificially created products called "messages." Manufacturers are going to get the message from consumers and start bundling more robust email clients and chat apps. Carriers in a tight market will start offering better data plans and even "free MMS" messages to compete. Small businesses have an opportunity to take advantage of the gap between this future reality and the current situation by creating easy to use, easy to set up email and chat services for mobile devices (integrating SMS push notifications will be key to these services)
Pros and Cons
So let's recap the pros and cons
- Integrated out of the box
- Just works (WAP Push setup from carriers)
- Simple to use
- Push Notification
- Cost (from 50 cents to more than 1 Euro per *recipient*)
- Size Limit (100k max for most MMSCs)
- Slow (compared to SMS or Chat)
- Closed (you need to pay to play)
- Interop issues (between carriers and countries)
Mobile Email and Chat
- Familiar Concepts (interfaces and ideas close to desktop apps)
- Open (services using these functions could be set up for free)
- Relatively cheap (only data rates apply)
- Multi-user (CC: emails and group chats)
- Setup is Difficult
- Apps are non standard, and many times not available
- Must "Pull" all data or try to stay connected 24/7
- Mobile Spam (pulling spam to your mobile is a waste of time and money)
- Inertia (newbies will use MMS because it's there. Like the IE icon on a windows desktop)
Comments and corrections welcome on this bad boy.