Japan's Index Buys Wireless Firm MoblissIndex Corp., a Japanese provider of mobile phone content and information, bought Seattle wireless media company Mobliss for an estimated $15 million.
Index also will invest an undisclosed sum in Mobliss to boost growth in North and South America. Mobliss will keep its name.
"There's a wave of consolidation, and companies are getting a worldwide reach," said Brian Levin, CEO of Mobliss.
Mobliss creates and distributes programming to entertain and inform more than 1.5 million registered wireless subscribers through their wireless devices. The firm has relationships with AT&T Wireless, Alltel, Bell Mobility, Boost Mobile, Leap Wireless, Nextel Communications, Sprint PCS, Telus, T-Mobile, Verizon Wireless and Cingular Wireless.
A notable Mobliss deal was with Fox Broadcasting and AT&T Wireless for the first and second seasons of the "American Idol" show. Other clients include Coca-Cola Co., ESPN, Tribune Media and FremantleMedia.
Index is equally well known in its country. The company nine years ago created Japanese telecommunications firm NTT DoCoMo's "God of Love" wireless fortune-telling device.
Index runs 110 mobile Web sites for 7.5 million users. A recent agreement with Walt Disney Internet Group will let the company create and distribute branded mobile content in China. The Disney deal, in particular, will let consumers subscribe from their cell phones to Disney Mobile content. This includes logos, animated wallpaper screens, games and ring tones.
Major Japanese corporations like Mitsubishi Corp., Fuji Television Network Inc., TV Asahi Corp., Panasonic Mobile Communications Co. Ltd. and NEC Corp. are among Index's biggest investors.
The Mobliss acquisition comes just as U.S. consumer packaged goods companies and entertainment firms realize the value of mobile marketing tactics like text messaging. These practices already are in vogue in Europe.
Mobliss competes with Boston's m-Qube Inc., Goldpocket Interactive and Norwegian-owned Telenor Mobile Interactive. Telenor claimed to launch the first cross-carrier premium text messaging campaign with ABC Daytime's "All My Children" show in July.
"There was a significant interest in interacting with the show, and we've received a significant number of unsolicited replies to the alert messages we sent out," said Steinar Svalesen, U.S. president/CEO of Telenor, Rockville, MD.
"As for wireless marketing," he said, "we've seen a number of non-premium campaigns. We focus on premium services, where the end-user pays a premium fee. As such, our focus will typically be on games, interactivity and other events used as brand re-enforcers as opposed to running direct sales promotions for a product."
Wireless penetration has exceeded 50 percent in the United States, making marketing to such a large audience all the more attractive. Coverage, however, is an issue nationwide given the geography and cost of building telecom networks.
That said, U.S. carriers have maintained decent per-customer revenue levels compared with markets that have 80 percent wireless penetration, Svalesen said.
Shows like "American Idol" and "All My Children" have proven that the youth market is attractive for carriers, broadcasters and marketers.
"Messaging has become a lifestyle in many markets, and Telenor is expecting the same development in the U.S.," Svalesen said. "Premium text messaging and advanced interactivity services will develop in conjunction with the overall messaging growth.
"Non-voice revenue will be very important for the carriers going forward as voice services become a commodity," he said. "The recent launch of number portability will further drive the conversion to more people using wireless services and young people just having a wireless service and no fixed-line phone."
Mobliss sees this trend and intends to expand nationwide in anticipation of more converts to the wireless market and the resolution of cross-carrier connectivity. The firm aims to hire about 15 people this year, raising its payroll to 40.
"Now that the market's heating up and brand advertisers are starting to get a hang of this, this is the year it'll start to take off," Levin said.