Vringo Update-Announces Global Partnership with Sony Ericsson

NEW YORK–Jan. 22, 2009—Vringo^TM, the next-generation ringtone pioneer, announced today that its free video ringtone application is being pre-linked on global shipments of Sony Ericsson’s Walkman™ phones and promoted via the manufacturer’s Fun & Downloads portal, introducing Vringo to millions of new users. New Sony Ericsson owners join a thriving community of Symbian, Java and Windows Mobile users who are already experiencing Vringo’s high-quality video ringtones and VringForward™ technology, which lets users send ringtones to friends just by calling.

This partnership with Sony Ericsson, which was established when Vringo took home a prize at last year’s Sony Ericsson Content Awards, is the latest step in Vringo’s continuing push toward global availability and monetization of video ringtones. Recently, Vringo announced partnership deals with mobile carriers in Turkey and France that enable users to download the Vringo application and access content, in some cases on a paid-subscription basis.

“Our partnership with Sony Ericsson is unprecedented,” said Vringo CEO Jon Medved. “In addition to being the first social video ringtone application to be downloadable directly from Sony Ericsson phones, we’re reaching millions of Walkman users—one of the most innovative, media-hungry audiences in the world.”

Vringo’s application, which is also available for a wide variety of Symbian, Java and Windows Mobile devices via www.vringo.com, lets users create or take video, images and slideshows from virtually anywhere, including Vringo’s 4,000-clips-and-counting video ringtone library or the Web, and make them into their personal call signatures.

To access Vringo, Walkman users can find the link prominently displayed in their phone’s Web browser. By clicking the link, users will download the Vringo application to their phones and can immediately begin sharing video ringtones with their phone contacts.

Vringo-can video ringtones crack the subscription model?

I met Haim Cohen-Mintz from Vringo at the Mobile Web Europe conference in London in September and he exuded a quiet confidence about both the prospects of the Vringo content proposition and its (nicely executed) business model.

True to form, the company has been progressively announcing a number of recent deals in both France and Turkey to provide their video content on deck with various operators.

What is interesting about their deal with Avea in Turkey is that Vringo will break new ground by launching a carrier led video ringtone subscription model. It is interesting because in many ways we are at an inflection point in the traditional models of mobile revenue generation, particularly when it comes to mobile content.

Pure advertising-supported business models are beginning to creak as the need for a balanced revenue mix imposes itself on content providers to both smooth revenues and cashflow as well as to increase the sustainability of revenue generation.

What we also see is increased divergence between the 'mature' mobile markets and the nascent or 'emerging' ones that are characterised by heavy mobile internet penetration. The consumers of the latter market have not 'evolved' from PC web to mobile web, thus do not suffer from the same degree of eyeball saturation.

Traditional revenue models (such as those entirely dependent on advertising) may well work in the emerging markets (at least for a while) but there is little doubting that a new market imperative is beginning to emerge in mature markets. Mass mobile consumers here will develop greater resistance to mobile advertising and since most large players will be slow to adapt, my belief is that nimble startups focused on niche content or niche market segments will have at their grasp interesting revenue opportunities.

Where does this leave Vringo? Vringo innovates in a mature (premium ringtone) market, so should be able to do well for a while. However, the market in mature countries appears to be shrinking, so the focus on emerging markets will be critical in sustaining future revenue growth ceteris paribus.