Over the last 2-3 years, consumption of digital media has evolved significantly. As content is becoming more digital, as devices are becoming more powerful and able, and as the consumers are becoming dependent of mobile devices for their media needs, the wireless phone is playing an important role in how digital media is consumed around the world. The digital rush has helped make mobile a $1.1 trillion (as of 2008) industry. As the demand for mobile content consumption increases, service providers are being rushed to enhance their infrastructure and keep up with the explosion of content and consumer interest.

The main drivers for increased activity on the mobile devices are three-fold: better networks in the form of 3G (and future upgrades of 4G+), higher processing power devices being available for mass-market prices around the world, and consumers becoming not only the consuming but also producing content at an exponential pace. As such from the early days of ringtones and graphics, the mobile ecosystem has evolved into more rich content experiences such as high-fidelity and multi-user mobile games, very high quality video in the form of multicast (though unicast is the one that is widespread), and social networking applications like Facebook and Twitter. Additionally, the smartphone boom that followed the iPhone introduction in 2007 clearly changed the dynamics of the market and how consumers view their mobile devices. It is interesting to note that on such integrated devices, consumers only spend less than 20% of their time on voice; rest is on other applications and services.

Such a shift is also changing the service provider business models and how they run their business and plan for future growth. Mobile media and data services are the only driver for growth as voice revenues plummet (worldwide). Significant mobile data usage is also putting strain on the operator’s network and as such they are forced to come up with data expansion (like 3.5/4G) and alternate (Wi-Fi/Femtocell) strategies so that they can profitably stay ahead of the curve.

Also, the very definition of the mobile devices is changing. More and more consumer electronic devices are being launched with a wireless data connection (Wi-Fi or Cellular). Devices such as Amazon’s Kindle and Dash are introducing vertical devices that are changing the industry dynamics as well. Newer players are entering the marketplace and the competitive landscape is being impacted as well. Apple’s appstore changed the way applications found their way onto consumer’s handset. This made it easier and lucrative for a developer in a garage to launch new applications.

The increased mobile media consumption is also giving rise to a new category of services on mobile – advertising. As flat rate forces the operators to reduce the pricing on subscription plans, advertising provides a way to compensate for such pricing pressures. In developing countries like China and India which are the two biggest mobile markets in the world, it is particularly important as these mobile phones are the only digital channel available to the advertisers to reach consumers in an efficient manner.

While the opportunities to exploit mobile media remain strong, the ecosystem needs to worry about meeting the expectations of the consumers. They have to invest in infrastructure, developer ecosystem, and continuous flow of new and improved handsets to keep up with the growing interest. It is clear that as digital media consumption grows; mobile will be front and center of this evolution.

Author is President of Chetan Sharma Consulting