The increasing adoption of streamed video and video chat services, fuelled by a sharp rise in the adoption of 3G services, will push revenues derived from mobile adult services to nearly $3.5 billion by 2010, according to a new report by Juniper Research.
The report also found that a significant proportion of new revenues were expected to hail from the relatively underdeveloped North American markets, despite the existing restrictions on on-portal content.
According to report author Dr Windsor Holden, "While operators in the US and Canada are still very reluctant to introduce age-verification systems and offer adult content, it is a completely different story off-portal with a number of service providers now offering D2C content and services aimed at those markets. Furthermore, as mobile subscribers become more comfortable and familiar with the off-portal environment, then the traffic to these sites is likely to mushroom."
The report also found that while new legislation in markets such as China and South Korea would depress growth in Asia, adoption in Eastern European markets was rising at a higher rate than previously anticipated, in part thanks to the greater willingness of operators in the region to offer a wide variety of explicit, white-label content on-portal.
"While in most forms of mobile entertainment, the brand is king. That truism does not apply in mobile adult content," said Holden. "The most popular genre amongst consumers is graphic, amateur content. If operators truly wish to maximise their revenues from adult content, then they should provide consumers with a mix of genres, in which white-label content is given equal prominence to that of major brands."
Other findings from the Juniper report include:
* Western Europe will remain the largest regional market for mobile adult services throughout the period covered by the report, with revenues rising from $775m in 2007 to $1.5bn by 2012.
* Global revenues from video chat services will rise from just $138m in 2007 to more than $1.5bn by 2012.
* While users of adult services are far less price sensitive than consumers of other mobile entertainment services, service providers should be careful not to overprice content.