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I am amazed how so many individuals - from telecom execs to ad agency reps - at so many industry events can share the singular belief that flat-rate data charges will boost usage and jumpstart a new era in the mobile Web.

After all, the argument goes, all-you-can-eat broadband charges most certainly helped make data services a routine part of daily lives. In fact, the arrival of flat-rate data marked a tectonic shift in user behavior and industry business models. Won’t history simply repeat itself once we all have similar tariffs in the mobile space? Won’t we all get rich as a result? And won’t it all convince the brands to (finally!) get involved in mobile big-time?

Don’t hold your breath.

A lively presentation by Andrew Bud, executive chairman and co-founder of mobile transaction network mBlox, a company connecting content providers and mobile operators at the heart of the off-portal experience, at the recent Mobile Content Conference organized by Visiongain in London, correctly challenges us to think again.

True to his style, Andrew passionately and professionally argued that unlimited flat-rate data plans may spell relief for a select portion of mobile users (in fact, mobile operators would break out champagne if just 25 percent of users buy into flat-rate data packages). However, the vast majority of users will pay data charges and - with it - the cost of receiving mobile advertising. As he put it: “Most people will basically pay for advertising and that is unacceptable. Some will see it come out of their flat rate bundle and that is not really OK either.” What’s more, it’s only a matter of time “before the fines come pouring in.” (It’s hardly likely that regulators will sit idly by and watch this for long.)

This is further complicated by the advance of rich data services, such as mobile video, and the groundswell interest among content owners in providing ad-supported content and TV-commercial-like mobile advertising.

Why mobile video? Because mobile content - a marketplace obsessed with ringtones and images - is a clear case of been there, done that. Total premium revenues are flat in most mature territories, and M:Metrics, a comScore company, reports that ringtone revenues are down 20 percent in EU5 in just one year. As Andrew sees it: “Mobile content needs refreshing, and mobile video is the next big thing.”

Granted, we could argue whether mobile video is the new premium content category, but, for now, let’s just accept that it is gaining serious traction, as evidenced by the rise in off-portal video (M:Metrics reports 9.3 percent of EU5 users have tried mobile video) and the surprise success of iTunes films, proving that people do pay for portable video content. (Andrew later told me that his sources at iTunes film vendors such as Shorts International report selling video short content has become a “significant revenue stream.”)

And then there is the rise of mobile search verticals, such as Veveo, whose vtap mobile search service (profiled here) is built from the ground up to let users browse and snack mobile video content from the Web. Veveo is convinced mobile video will be bigger than mobile email and, judging by the usage stats Daren Gill, Veveo VP/GM recently shared with me, it could be right.

Short videos will certainly be central to content discovery, mobile search, and search advertising - and that’s just the start. Andrew argues short videos are also destined to become part of our mobile advertising experience.

I’ll put on my Jonathan MacDonald hat now and take this a quantum step further. Links and display advertising that direct users to a landing page are fine if the goal is to get users to the shop/destination. But if the end-game is about engagement and capturing the attention/passion/emotion of the visitor, then rich-media could be a perfect match (although SMS can still do the trick if the value prop covers the bases). In a nutshell, advertising is about two-way communication and there are no free lunches. Consumers demand something in return - even if it’s just a laugh, as this video illustrates. (Thanks to Andrew for providing the link and expertly making this point in his presentation. Actions do indeed speak louder than words.)

Video

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