Low-end, mainstream and female: the bigger addressable market for Orange UK mobile media?

Posted by Philippa Hobbs Friday, April 30th, 2010

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Orange UK released their sixth Digital Media Index earlier this month, revealing some intriguing mobile content consumption trends during 4Q09. By the end of 2009 the operator had grown its 3G user base of handsets and dongles to 5.34 million – accounting for almost a third of the operator’s total subscriber base and representing a 40% increase compared to the last Digital Media Index, which reported end-March 2009 data. But despite this growth, mobile data usage during the period averaged a monthly total of 436 million MB, up only 13% from the last Index. This discrepancy in growth is perhaps surprising, considering that during 4Q09 Orange launched the iPhone, selling 222,000 units – representing just over a third of its 3G net additions – and that it reported growth of 122% in sales of dongles.

The operator reports that the average iPhone user consumes 165MB per month, while other smartphones average 115MB per month. That’s not to say that the 90% of data traffic that isn’t attributable to iPhone users is attributable to the remaining 5.2 million 3G users. According to the report, of the top five devices driving traffic to the Orange World portal, only two support data protocols faster than GPRS/EDGE and three of them were first launched as far back as 2008. And despite the walled garden being assigned to the history books, the portal user base is hardly niche – compared to social networking sites, the darling of digital content, the Orange Portal receives almost double the number of visitors in an average month.

Of course, higher-tier-device users often change their default homepage settings to avoid the portal altogether, or users bypass the portal completely by using bookmarks. But those who don’t or can’t are, according to the report, spending longer on it: in December 2009 the average session lasted 17 minutes and 6 seconds, up from 14 minutes and 9 seconds in March 2009. The portal user base has grown only marginally, by 5% to 3.41 million, but it represents a significant chunk of the operator’s total subscriber base. These users are receptive to easily-accessible mobile content, likely on devices with limited capabilities, and are typically lower-value users: 57% of visitors to the portal are prepaid customers. Orange is evidently managing to increase the stickiness of its portal by publishing content that is relevant to a wide market.

Although less popular in terms of total visitors, Orange subscribers visiting social-networking sites on the mobile Web outside the Orange portal almost doubled, a trend that is hardly surprising given the steep growth in fixed-line social-networking traffic. Nor is it surprising that users made an average of 535 page impressions per month on off-portal social-networking sites, much higher than the average of 55 per month on-portal. That’s because, assuming that Facebook makes up the greatest share of this activity, a typical Facebook session usually involves engaging in a rapid click-stream to navigate through newly posted content.

The success of other mobile data services such as video, TV, music and games appears to be less clear. Orange did not report updated mobile-video-usage figures, the service category widely believed to be the biggest contributor to data traffic, saying only that “mobile TV and video continue to be popular” and revealing the top-ranking TV channels. The report highlights the usage of TV streaming applications and podcast downloads, as well as YouTube clips, which it says have “become hugely popular” – but of course contribute no revenue to the operator if viewed using a flat-rate data plan.

Additionally, no new information is given about the volume of mobile-music downloads, which in the last Index had grown 8% to only 771,278 downloads in the reported period of December 2008-February 2009. But the launch of a prepaid-tariff music service, Orange Monkey, has reportedly driven music track consumption by prepaid users to a level comparable with postpaid users, while ring-back tone purchases increased 25% quarter-on-quarter in 4Q09.

Mobile-game downloads are reported to have declined by 17% since the last Index to 639,948 downloads during 4Q09. Despite this, Orange claims an increase in market share to 34% of the “UK mobile gaming market”, although whether this is a share of downloads or revenues is not known. It does reveal that 30% of gaming revenues comes from users choosing to purchase full games after using a free, pre-loaded demo. Orange states that as many as 40% of users of free game demos decide to buy.

The Digital Media Index also reveals some interesting insights into gender behaviour. The statistics presented show that men have downloaded most videos, purchased most TV clips and comprise the majority accessing the Orange portal and social networking sites.

But only a cursory glance is needed to see that the top content being searched for, watched and listened to via Orange mobile services is overwhelmingly dominated by mainstream popular culture references much more closely associated with young females (references such as singer Cheryl Cole, actor Robert Pattinson and TV talent show X Factor). But a user would presumably only download a given song once, for example. Perhaps it is therefore the case that many young females are consuming fewer items each of lesser variety – the “short tail” of content consumption – while fewer males are downloading many items of far wider variety – the “long tail” of content consumption. Indeed, it’s worth noting that women send more SMS and “significantly” more MMS than men, according to the report.