Wireless Adult Services to Ring Up $1B by 2008

Coming on the heels of a decision by a Japanese court ordering spammers to pay for unsolicited wireless porn messages, is a report from Strategy Analytics on wireless adult entertainment services.

Japanese mobile phone carrier, NTT DoCoMo Corp., was awarded 6.57 million yen ($54,420) in March 2003 to cover the cost of unsolicited messages from a Tokyo company that routinely flooded the network with randomly addressed advertisements for pornography or dating services.

DoCoMo estimates that more than 80 percent of the 950 million messages sent to its mobile email service each day are unsolicited – although much of that is filtered out before it reaches users – and the wireless provider claims to have spent more than 4 million yen bouncing the junk email that was sent to non-existent wireless phone numbers.

Despite the potential legal ramifications that may arise from unsolicited adult-oriented wireless messages, Strategy Analytics found that a legitimate market exists for mobile adult-oriented services, ringing up $1 billion by 2008. However, this forecast would only represent about 5 percent of mobile entertainment service revenues, the firm predicts.

David Kerr, vice president of the Strategy Analytics Global Wireless Practice, comments, “This is less than half of the value of the ringtones market in Western Europe in 2002. We believe that, with so much pornography available for free on the fixed Internet, demand for adult material will continue to be largely met by fixed Internet services.”

Strategy Analytics notes that adult community services, such as those recently announced by AT&T Wireless and Match.com, will ramp up quickly, boosted by the growth of the camera and videophone markets. Although skeptical of the revenue potential that streamed or downloaded adult services offers to wireless clients, the report further recommends that carriers must move swiftly to capitalize on their core messaging strengths by bundling branded dating applications into their service portfolios.

“Carriers must not allow themselves to get sidetracked, and must focus on implementing applications infrastructure platforms and business models that will open up mobile to media and entertainment industries, including adult entertainment, as swiftly as possible,” adds Kerr.