The facility to charge mobile phone users for content (PSMS) has seen a new market spring up over the last few years. The biggest use has been by media companies - TV and newspapers, along with ringtones, backgrounds and games. Some ringtones have multi-million pound advertising budgets.
So what is the future for mobile content? What do users want and is there money to be made from this?
What is Mobile Content
The term 'mobile content' refers to anything that is available to users through their phones - ringtones, backgrounds and games were the starting point, but this is becoming more diverse. With the latest generation of phones, any type of media (text, pictures, music or video) can be delivered to a mobile phones and a charge made for it.
I don't think that content is the most appropriate term for it. Something like Mobile Media or Mobile Information Services is more relevant to users.
Mobile Payment Systems
The most common way to charge users for the media received on their mobile is through reverse charge SMS. Simply, the user makes a request by SMS and the message thats sent back to them deducts a fixed charge from their phone.
Shortcodes
Reverse charge billing is done via a five or six digit numbers as these are easiest for the users - commonly known as shortcodes. In order for a short code to work, there needs to be an agreement by all of the networks to accept this number (unless its a number specifically for one networks users). To own that short code number generally costs £�1000+ to set up and around £�750 each month. For larger organisations such as TV companies this is a small cost and its common to have a dedicated short code for a specific TV programme.
For someone just starting out, or for smaller content providers this may not be viable, so short codes may be shared across a variety of services.
Keywords
In order to distinguish different services on a shared code, keywords are used. So for the number 86122 may have many different users whose particular content is identified by their keyword: ringtones, backgrounds. There are no limits to the keywords for a shortcode number � its simply method of identifying which content the user wants. Unlike an email which has a subject line and a header, this cannot be altered in SMS. Therefore the data must be contained in the text mesage itself.
Reverse SMS Billing or Premium SMS (PSMS)
Each shortcode has one price attached to it - these prices can be 10p, 25p, 50p, 75p £1, £1.50, £3 and £5. This price is set when the number is initially set up. It is possible to charge multiples of the shortcode price by sending more than one message. So if the content provider wants to charge £2, for example, then the user would receive 2 £1 messages.
Payouts
One problem facing mobile content providers are how little actually ends up in their pockets.
If you take a £1.50 message the break-down is as follows:
26.25p VAT
up to 45p to the networks
Obviously this is a barrier and it limits the content that can be delivered. This is particularly unfortunate for charity donations by text as they do not get the VAT back from the governemnt. The only small consolation is that in a system such as txt4giving.com, the message reports allow them to show an audit trail for Gift Aid.
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