Peer-to-PeerBox

David Murphy meets Alex Lazovsky, CEO of Nareos, which operates the PeerBox Mobile content-sharing and social networking service

DM: So Alex, give us the low down on Nareos and PeerBox if you would.

AL: Sure. We were founded in 2005. Our headquarters are in Israel and we also have an office in LA. We employ 20 people. Our flagship offering is PeerBox Mobile, which is a combination of technology and supporting managed services that enable online content owners to deliver content to a network of mobile users. The service is based on our multi-peer-to-multi-peer file-sharing technology, which makes mobile content available for access and sharing by mobile users, and supports any type of content such as videos, music, ringtones, wallpapers from a diversity of sources, including User-generated Content (UGC) created online or from the mobile. For the user, it means they can access and share mobile content easily, and the partners benefit from the generation of revenues from beyond their own portal.

DM: So who are these partners?

AL: There are three types. The first are wireless b2c companies. These include the big players like Buongiorno and Jamba, but also lots of second-tier companies and an even larger layer of third-tier companies who are less important now, but may become more important in the future.
The second type are web companies, people like Metacafe. Then thirdly you have the mobile operators. So these people usually have portals, but we enable them to generate revenues from access to this content by diversified sources. But they also have the means to enforce copy protection and blocks and filters subject to their business policies.

DM: So PeerBox Mobile users can’t just buy a ringtone and share it around their friends?

AL: For something like a ringtone or a song, they could recommend it to a friend. And with a song, the friend might typically get a 30-second preview, but if it’s paid content, then the friend will have to buy it, and the revenue is shared between PeerBox and the partner.

DM: So what sort of content can be freely shared?

AL: This is mainly UGC. The majority of content that is shared virally is UGC.

DM: And do you make any money from that?

AL: We don’t make money from UGC in most of the countries, although in Germany, we decided to sell UGC for market research purposes. So there we sell each single video clip for €0.40 (£0.30) and people buy it. They don’t worry about paying for a piece of UGC.

DM: So when the UGC is paid for like this, does the contributor see any of that money?

AL: Not in the German example, because here we are in a partnership with Metacafe and we are selling content contributed by their web users. But where we have people contributing directly to PeerBox, if we were charging for that content, or if the content was ad-funded, then we would plan to reward the contributors.

DM: So would you describe PeerBox as a social network?

AL: Yes, I would say it is a content-oriented social network.

DM: And how do people get it on their phones?

AL: The easiest way is to visit the website and enter your mobile number and then you’ll get an SMS with a WAP Push link to the mobile site. We also have a downloadable application for Symbian, and Java handsets. We have also developed a version for Android, and there is one in the pipeline for Windows Mobile. But we have the WAP site as the fallback for everyone else.

DM: And how many users do you have?

AL: We ran a large-scale field trial to prove the technology and we acquired 200,000 beta test users virally, with no advertising, from 186 countries. We find the top countries are India, the UK, Spain, Italy, Russia, Ukraine and Germany. During the last couple of months, we have signed up a lot of new partners, and we are now starting to roll the service out as a pilot with these, but already, the user base is growing fast. We believe it will double every couple of months.

DM: And what about usage? How long do your users spend on the site? How much content do they download?

AL: Every user downloads about 25 videos and pictures on average every month. In terms of data traffic, they download around 30MB of data and generate over 100 mobile page views each month, which means there is good potential for contextual advertising, and this is also in our plans. Our users tend to profile themselves, so this opens up some great potential for advertising.

DM: And they can access the service from anywhere in the world?

AL: Yes. We are a cross-country and cross-carrier service. We are completely mobile operator-agnostic.

DM: And with the amount of data your users are consuming, I assume it’s important for them to be on a flat-rate data plan?

AL: Our approach here is to let all our users know that operators do have flat-rate data plans available and to recommend to them that they contact the operator and ask them about their flat-rate plans. We have one deal in place with a wireless b2c company in Ukraine where they have a revenue share deal in place with the mobile operators in the country and they share the revenue generated by the data traffic with us. But I don’t believe such models will make sense in the long term because data rates have to go down. And I believe we will see other models, like the ad-funded model, to encourage people to use their mobile and generate revenue in other ways.

DM: But you’re optimistic about the future for mobile social networking?

AL: I am, yes. I believe social networking and communities on the mobile will really take off this year. You can already see that the largest social networks on the web are pretty saturated in terms of traffic, so they are all turning to mobile to find additional traffic. Now we could see this as a threat, because YouTube, for example, started with a WAP site and have now launched a really neat client application. But in fact, we see this as a huge opportunity for companies like us, because we already have the technology platform in place, so we can help the second-tier players to take their business on to mobile, and I think we will see this happening this year.