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[Updated] Mobile phones are the single largest distribution mechanism in the US with 91% penetration. For media, this is just the beginning in the disruption of existing businesses. Flurry released an insightful report highlighting the dramatic change of revenue share in the $11B video game industry. In just 12 months, the iPhone has captured 5% of the market.

Additionally, 

40.1 million of the 77 million Americans playing games on mobile devices play them on the iPhone, iPod Touch or iPad — nearly catching Nintendo’s 41 million gamers playing the DS and DSi and blowing well past Sony’s 18 million gamers on its Playstation Portable device — according to the Newzoo International Gamers Survey 2010.

For movies, books, news, music and all other forms of media there will be very similar share shifts. The opportunities for startups to participate in these enormous waves will vary according to industry dynamics, but the winners in the previous paper/CD/DVD market will not be the winners in this mobile market. Successful startups will have to decide between navigating the existing ecosystem to acquire rights from content holders and enabling content creation of their own either through UGC or professional content. I’m certain there will be success cases on both sides.

Of late, content on the web hasn’t been highly valued. But this is changing. In the late 90s, eyeballs were valued because of the rise of the banner ad. Then page views exploded, but ad dollars couldn’t keep up, so the value of a page view plummeted. Next, AdSense launched and provided a much better monetization mechanism and page views were more valuable than before. Social media has again increased page views by an order of magnitude and Facebook is on the brink of making those page views valuable.

This pattern of “page view” explosion followed by monetization innovation is inevitable on mobile and it will lead to huge companies – the Zynga of publishing for example. The most successful mobile applications have audiences in the tens of millions with the potential to reach hundreds of millions or billions in the long term. These audience sizes are an order of magnitude larger than PCs and will create companies worth an order of magnitude more.