Social networking to buoy mobile UGC

Over the next five years, social networking services are set to dominate a burgeoning market for mobile user generated content, according to a new report from Juniper Research.

Globally, end user generated revenues from social networking, dating and personal content delivery services will increase from $572m in 2007 to more than $5.7bn in 2012, with social networking accounting for around 50 per cent of the total figure.

The growth in revenues will be driven by a boom in the social networking community. The number of active users of mobile social networking sites is expected to rise from 14 million in 2007 to nearly 600 million in 2012, according to Juniper in its report ‘Mobile User Generated Content – Dating, Social Networking & Personal Content Delivery 2007-2012’.

Although dating and chatroom services currently account for 57 per cent of mobile user generated revenues, this proportion is expected to fall to 21 per cent by 2012 as other UGC services increase in popularity. Conversely, the volume of downloads from mobile personal content delivery sites such as 3’s SeeMeTV are expected to rise from less than 200 million in 2007 to more than 9 billion in 2012.

The research house also anticipates that off-portal social networking sites will increasingly opt for free-to-consumer, ad-funded business models to gain visibility and market presence.

According to Juniper analyst and report author Windsor Holden, “Even though social networking sites are in their infancy, the exponential growth experienced by a number of mobile service providers – in some cases achieved primarily through viral marketing – would seem to affirm that there is huge potential in this area. The key challenge now is for those providers to monetise that interest.”

The analyst believes that, in the medium term, the highest levels of growth could well be experienced in developing markets with limited fixed broadband access.

“In these markets, the mobile phone is becoming the predominant means by which people access the internet. Hence, the overwhelming majority of online social networking will be conducted via the handset rather than the PC,” Holden said. However, he warned that at present, high data charges remain a key hurdle to mass service adoption.