Pornography is likely to be among the main uses that will drive demand in the early days of ultra-fast mobile phones, the chief executive of porn empire Private Media Group said Monday.
"In new technologies, adult services usually account for 80 percent of traffic. It has been so with video, the Internet and DVD. It is natural to assume it will be the same with mobile Internet," Charles Prast said.
Experience shows that the share of such content later falls to around 20 percent of the total, he said.
Research company Visiongain estimates that the value of the pornography market will be some US$70 billion in 2006 and that US$4 billion of the total could come from mobile telephony. That's the year in which conservative operators expect to see a mass market for high-speed third generation (3G) telephony, which offers streaming video on handsets.
"This number is attainable," Prast said. "We will see some shift among customers away from currently existing channels, but also the whole market will grow. Mobility will increase the impulse to buy, and it is also more discreet," he said. Demand for pornography among mobile consumers is already evident in the Netherlands, where a considerable proportion of the latest mobile picture-sending service offered by operator Vodafone is used for porn, a telecoms industry source said. A Vodafone spokesman said the company was not able to check content and declined to say whether porn dominated its Dutch mobile picture service. Another advantage of buying porn over a mobile network would be that billing could be handled by the operator without the subscriber having to submit credit card details over the Internet.
"Many consumers have bad experiences paying with a credit card," Prast said. Operators would be interested in handling the billing because of a 25 percent profit margin on such services, he added. Private Media Group, set up by Swedish-born porn king Berth Milton who serves as the company's chairman and has a majority stake, already has agreements with all operators in Britain and Spain as well as several operators elsewhere in Europe for porn-related short text messages (SMS).
It expects to sign similar deals with two US operators soon. Swedish operators, who expect to launch 3G services this year and in early 2004 are not enthusiastic.
"We have no plans to market or sell pornography. We always follow the ethical guidelines we have," said Charlotte Zuger, a spokeswoman for leading Nordic operator Telia Mobile.
"Erotic services have low priority. We believe more in services such as e-mail and news," said Niclas Lilja, a spokesman for operator 3, owned by Hutchison Whampoa and Investor, which wants to launch services in the spring. He said that according to market research only three percent of potential subscribers would like to use erotic services.
"It is clear that there is big money in it for the operators, but for obvious reasons they keep a low profile," Prast said.