Monstermob

» see monstermobgroup.plc.uk as it lived, on the wayback machine

~ the obituary ~

Monstermob was founded in 2000 by Martin Higginson, a businessman from Lancaster who worked out that a mobile phone was a vending machine with a billing relationship already attached. The product was ringtones, delivered by text message and charged straight to the phone bill, with wallpapers and full length tracks added later. Monstermob Group plc floated on the Alternative Investment Market with an opening market capitalization of 32 million pounds, which for a company selling novelty sounds to teenagers was a serious number.

The technical bet came early. Chris Noden joined in February 2001 as the first technical appointment and built the platform that delivered polyphonic ringtones before most competitors could, which at the time was the difference between a monophonic beep and something that sounded vaguely like the song. David Wood was brought in to build the ringtone catalog and ended up supplying much of it himself. In August 2004 the group bought 9 Squared, an American ringtone company founded by James Eberhard, who joined as managing director of network services.

By 2005 the shape of the company had changed. Full track audio was becoming deliverable, so Higginson hired David Bloomfield, a lawyer out of Sony Music, to build the music side. Hans Snook, who founded Orange and chaired Carphone Warehouse, came in as chairman in May 2005, and the company pushed hard into China. Higginson also brought in the former investment banker Niccolo de Masi alongside a finance director, David Marks, which is the kind of hiring a company does once it has decided it is going to be much larger.

It did not get larger. Regulators in both the United Kingdom and China moved against the billing practices that the whole third party mobile content sector ran on, and Monstermob's revenue sat on exactly those practices. Higginson was ousted in June 2006. The company issued three profit warnings that year and the shares lost ninety percent of their value. In February 2007 the Spanish internet firm LaNetro Zed took a 53 percent stake and removed the board including Snook, beating a rival approach from the Chinese group Linktone. Administrators were appointed to Monstermob Group plc on 24 May 2017.

~ the case file ~

~ the climb ~

The business model was almost embarrassingly good while it lasted. Somebody saw an advert on late night television, sent a text to a five digit number, and the charge appeared on a bill that another member of the household usually paid. There was no card to enter and no account to create, so the gap between wanting a ringtone and owning one was about twenty seconds wide. Monstermob was one of the companies that industrialized that gap.

What made it a stock market story rather than a small business was subscription. A single purchase was worth a pound or two, but a subscription that quietly renewed every week was worth far more, and the sector drifted toward wording its adverts so that the renewal was technically disclosed and practically invisible. That drift is what eventually brought the regulators in, and it is why a company with real engineering behind it is remembered for its small print.

~ the crackdown ~

Turkey ran the same racket on the same timetable, the same late night adverts and the same short codes, and I was a university student with a prepaid line for most of it. What I had no idea about was the other end of the wire. Monstermob was a listed equity story whose revenue depended on people not reading the words under the advert, and you could be entirely inside the ringtone era in Ankara without ever knowing the company billing you had a chairman who founded Orange.

The rules changed in two markets at once. British regulators went after premium rate billing while Chinese regulators went after the mobile value added services sector, and Monstermob had staked its growth on both. Revenue that depends on a loophole reprices the moment the loophole closes, which is what three profit warnings in twelve months actually means.

~ the funny part ~

The company outlived its own business by a decade. The consumer operation was effectively absorbed after LaNetro Zed took control in 2007, and the enlarged group ran across 31 countries with 1,200 staff under the Zed name. Martin Higginson was brought back to the board in March 2007 by the new owners who had just removed everyone else, an unusual second act for a founder pushed out nine months earlier.

Monstermob Group plc, the listed shell that had been worth 32 million pounds on its first day of trading, kept a legal existence until administrators were appointed in May 2017. The London Gazette notice is the only obituary it got, and by then the thing it was named after had not sold a ringtone in ten years.

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