You can hardly avoid the adverts for the various mobile operator's offers for 'internet on your mobile' assorted forms of flat rate data.
The concept is great. Pay around £7.50 a month and get 'unlimited' access to the internet from your phone.
Inevitably mobile customers will view this in a similar way to broad band - pay a flat fee and connect to the internet however you want, within reasonable download limits.
However when you look at the conditions there's always a catch.
Take T-Mobile's Web'nWalk. Aside from the terrible spelling/grammer of the name (!), the conditions state that:
Web'n'Walk - £7.50pm - 1GB monthly usage + "We do not permit use of this
service to provide modem access for a computer or for peer to peer file
sharing, internet phone calls or instant messaging."
So all you can do is connect to the web via their portal.
Similarly if you travel abroad, they will charge you £7 per megabyte of download. There is a news report where one of their director's even admitted this charge was excessive. However, the time that you need your mobile email the most is when you are away.
So far only around 20% of mobile users have taken up a flat rate data tariff. In terms of downloading content from web or mobile sites, that's still a lot of people, over 15 million. But what about the majority of mobile users who are not on a flat rate data tariff?
With home broadband you pay your monthly money and get a connection. If you don't pay, you don't get on the internet. Pretty simple.
With mobile, the majority of people can connect to mobile web. Unfortunately for 80% of users that means they will be paying up to £7 per megabyte to d so. Yet very few people realise the levels of the costs.
The problem for mobile content providers is that a music track, for exammple may cost £1 or less to buy but for 3 minutes, it may cost £21 in datacharges to download. As soon as a user realises this then they are unlikely to every download through their phone again.
There are a number of solutions to this. The simplest is that the operators should offer a fast data connection for all types of data at a single price to all their users. They should remove the 'pay as you download' tariff as it is unreasonably expensive.
Why should they change to this pricing model?
Currently the operators are only interested in users where there is a billing relationship. In other words they can charge money for some kind of transaction.
Switching to flat rate data will change this relationship - but ultimately for the good. Flat rate plans for everyone means that more web surfing and downloading will happen. The most popular round for payment on mobile is premium SMS. There will be more downloads and the operators make more money. Simple.
Another alternative would be to include the cost of the data in the download itself. That's effectively what happens with MMS but the size and formats are limited. The idea is that when a mobile user pays for their premium SMS for content, they should not have to pay any more to download it.
Poor user experience brought about by data charges has damaged the mobile content sector. Removing these charges will increase the downloads and ultimtely the revenues of the mobile operators.
Friday, November 30, 2007
Mobile Toilet
'SatLav', 'Down the Toilet' and 'Council Caught Short' are all likely headlines for London's Westiminster Council's 'text a toilet' scheme.
Whilst some people are criticising the initiative as a waste of resources, I think it's a great idea.
Finding a toilet in central London is getting increaingly difficult and it's a service that is of obvious and genuine benefit.
Users text 'toilet' to 80097 - using a location, the service identifies the nearest public lav. The 'SatLav' system charges 25p for each text.
As well as the council's 40 public toilets, the locations include the Greater London Authority, London Underground and some major department stores.
Westminster City Council said that the location service is designed to cut down on the amount of "street urination".
The council said: "Up to 45,460 litres of urine is at risk of ending up in the city's streets and alleyways through irresponsible and antisocial behaviour," Lovely!
Whilst I doubt that the average Saturday night drunk will pay 25p to text this, the service will be useful all kinds of other people.
There has been some debte amongst mobile developers of the take-up of location-based services. So far they have been quite limited. However, there are specific applications, such as the SatLav that can prove to be of benefit. Our messaging system txt4ever will include facilities to set up and manage mobile location services.
On a side note, the best public toilets in London have to be the ones on Baker Street, next to Westminster University. They have flowers, classical music and are spotlessly clean.
Whilst some people are criticising the initiative as a waste of resources, I think it's a great idea.
Finding a toilet in central London is getting increaingly difficult and it's a service that is of obvious and genuine benefit.
Users text 'toilet' to 80097 - using a location, the service identifies the nearest public lav. The 'SatLav' system charges 25p for each text.
As well as the council's 40 public toilets, the locations include the Greater London Authority, London Underground and some major department stores.
Westminster City Council said that the location service is designed to cut down on the amount of "street urination".
The council said: "Up to 45,460 litres of urine is at risk of ending up in the city's streets and alleyways through irresponsible and antisocial behaviour," Lovely!
Whilst I doubt that the average Saturday night drunk will pay 25p to text this, the service will be useful all kinds of other people.
There has been some debte amongst mobile developers of the take-up of location-based services. So far they have been quite limited. However, there are specific applications, such as the SatLav that can prove to be of benefit. Our messaging system txt4ever will include facilities to set up and manage mobile location services.
On a side note, the best public toilets in London have to be the ones on Baker Street, next to Westminster University. They have flowers, classical music and are spotlessly clean.
Thursday, November 22, 2007
The Value of Social Kudos
Here's a simple, obvious, yet very interesting point about the value of mobile content.
A survey a young group of mobile users asked the how much they would pay to download a track to their phone. They all gave answers of around 75p to £1.00.
When asked how much they would pay for a ringtone, it was around £3.
In other words, they would pay around 3 times as much for something that represented just a few seconds of a complete song!
Why was that?
The answer was social kudos. It was important that they were heard with the right ringtone on their phone. So important that they would spend more than 3 times the cost of the full track.
This principle can be applied to all kinds of items, for example in social networking you may pay to send a virtual bunch of flowers. The price of something is always based on it's perceived value, it is significant though how much value can be added when it gives social kudos.
A survey a young group of mobile users asked the how much they would pay to download a track to their phone. They all gave answers of around 75p to £1.00.
When asked how much they would pay for a ringtone, it was around £3.
In other words, they would pay around 3 times as much for something that represented just a few seconds of a complete song!
Why was that?
The answer was social kudos. It was important that they were heard with the right ringtone on their phone. So important that they would spend more than 3 times the cost of the full track.
This principle can be applied to all kinds of items, for example in social networking you may pay to send a virtual bunch of flowers. The price of something is always based on it's perceived value, it is significant though how much value can be added when it gives social kudos.
Mobile Content Glossary
Mobile Content Glossary
The difficulty with any new technology or economy are the proliferation of terms and acronyms. The following glossary is intended to cover many of the main terms, but is by no means exhaustive.
3GP – The standard format for mobile video. 3GP stores video streams such as MPEG-4, H.263 or H.264, and audio streams as AMR-NB or AAC-LC formats. 3GP also describes image sizes and bandwidth, so content is correctly sized for mobile display screens.
Aggregator – in the context of SMS and PSMS, an aggregator, such as Mblox, works with the mobile networks to agree shortcodes and bulk SMS routes which are provided to mobile platforms (immedia24)and content providers as single IP connection through their SMS Centre.
Billing Message – see PSMS
Bulk SMS – a common term for text messages bought from aggregators/SMS Centres. These messages are bought in blocks of 1000s or many 1000s at a lower cost than those bought from networks. Bulk SMS is typically used for mobile marketing campaigns and other web-based messaging applications.
Content Platform – or sometimes referred to as a delivery platform, such as . This is software or a web-based application for managing SMS and content delivery such as handling requests from messages sent from handsets. A platform will also provide reports of messages sent and receiving and revenues earned from PSMS.
D2C – Direct to Consumer
Flat Rate Data – see Mobile Data Charges
ICSTIS – The premium rate billing regulator, who are now renamed PhonepayPlus. All providers of PSMS must be registered with them as a service provider. They have the power to raise fines for breaches of their regulations, but only against the service provider and not the content provider – hence the service provider for the Richard and Judy Scandal, Eckoh received the fine, not Channel 4 themselves.
IP – Internet Protocol – any data that is sent or received using the internet.
J2ME – Java-based development language used for many mobile applications, especially games
MMS – Multi Media Message Service – with the advent of colour screens and phone cameras, it was developed by mobile networks as a replacement for SMS. MMS allows the user to send and receive pictures, audio and short video content (around 250k files). The cost of MMS combined with limited user need has seen a relatively small take up, with 100 million messages per month being sent in the UK (around 2% of the SMS volumes).
Mobile Data Charges – refers to mobile operator charges for accessing the internet and email. In effect, to download anything from the internet the user is charged for data. This can be as high as £7 per megabyte and is additional to a PSMS charged by the content provider. Many users are not aware of the data charges until they appear on their phone bill. Recent flat rate data charges – around £7.50 per month for 1 – 2 gig of downloads has alleviated this, but mobile users not on a flat rate plan are likely to be put off downloading content due to the high charges.
Mobile Operating Systems – There are a number of mobile operating systems used by handset manufacturers – Symbian, Windows Mobile, Ajax, Linux. There are other systems specific to certain phones such as the Blackberry and the iphone. The battle for the dominant mobile OS is likely to develop in the next 12 months and the main players will probably be Symbian, Windows Mobile and Google’s Android.
Mobile Operators – are the companies that own and operate the mobile infrastructure – in the UK they are Vodafone, T-Mobile, O2, Orange and 3. Operators such as Virgin Mobile lease capacity from the main operators.
Mobile Portal – an entry point into the mobile web. The mobile operators run their own portals, and is typically the first point of call for a mobile user logging on to the internet.
MSISDN – the number of a mobile phone. The MSISDN is carried in all SMS and MMS and offers an ideal way to identify a specific user. It cannot be identified when the mobile user is browsing the internet.
Ofcom – The telecoms and media regulator. Any premium rate issues will be dealt with by PhonepayPlus (ICSTIS), but Ofcom will deal with non-premium issues such as SMS spam. Their site has excellent guidance on acceptable usage.
PSMS – Premium SMS – is a message that is charged to the users phone. The charge is on receipt of a message, sometimes referred to as a reverse billing SMS. In order to comply with the regulations, the user must send a request message to a shortcode (a 5 or 6 digit number).
The price of the PSMS is determined by the shortcode number used for the message. These shortcodes are priced at 10p, 25p, 50p, 75p, £1, £1.50, £3 and £5. Billings can also be multiples of the price eg 2 x £1, where the user will receive 2 messages at £1.
Shortcode – a five or six number code for both receiving SMS from and sending Premium SMS to mobile users. Each shortcode is owned by a service provider who aggregates the number across all of the major networks. Shortcodes are country specific and cannot be sent/received outside the country of origin.
SMS – Short Message Service – an SMS is 160 characters of text and 12 characters of header (such as a reply number). Unlike email, for example, an SMS cannot carry additional header information or picture or video content. There are over 4 billion text messages sent each month in the UK – more messages than voice calls made.
SMSC – SMS Centre or gateway. An SMS centre provides a connection between the mobile networks and the internet. They will typically act as an aggregator by offering a single IP-based connection across all networks. They will also set up and get the agreements for shortcodes across the mobile operators.
Subscription/Recurring Billing – is a revenue option that allows the content provider to accept a single SMS request from a mobile user and continue to send messages monthly, weekly or even daily until an opt out or ‘STOP’ message is received. This was commonly used in the ringtone market boom as a method of maximising revenue. However stricter controls have been put in place, particularly with regard to subscription billing from under 16s.
URL Sending – a common method for delivering content by SMS. The text message will contain a URL link, which, when opened will download the content.
WAP – Wireless Application Protocol – the protocol has been widely available since 2000 and was designed to offer a simplified version of web browsing from mobile phones.
Wap Push – or Wap Push Message is a method of delivering mobile content by SMS. The Wap Push is essentially a text message with a URL to the content and configured as a Service Message. It will prompt the handset user to open the URL or download the content. Due to abuse by unscrupulous companies Wap Push can no longer be used in Premium SMS.
Wireless – it used to be the word my grandparents used for their radio! These days it general refers to wireless computer networks, or WiFi. Confusingly ‘wireless’ tends to be the term used in the states for mobile networks.
WML – Wireless Mark Up Language – similar to HTML, WML was designed to be specifically used on mobile. As mobile handsets have developed WML has become less important for delivering web-type content, with XML, compact HTML and HTML also running on many mobile browsers.
© Mark Brill, Ping Corporation Ltd 2007
The difficulty with any new technology or economy are the proliferation of terms and acronyms. The following glossary is intended to cover many of the main terms, but is by no means exhaustive.
3GP – The standard format for mobile video. 3GP stores video streams such as MPEG-4, H.263 or H.264, and audio streams as AMR-NB or AAC-LC formats. 3GP also describes image sizes and bandwidth, so content is correctly sized for mobile display screens.
Aggregator – in the context of SMS and PSMS, an aggregator, such as Mblox, works with the mobile networks to agree shortcodes and bulk SMS routes which are provided to mobile platforms (immedia24)and content providers as single IP connection through their SMS Centre.
Billing Message – see PSMS
Bulk SMS – a common term for text messages bought from aggregators/SMS Centres. These messages are bought in blocks of 1000s or many 1000s at a lower cost than those bought from networks. Bulk SMS is typically used for mobile marketing campaigns and other web-based messaging applications.
Content Platform – or sometimes referred to as a delivery platform, such as . This is software or a web-based application for managing SMS and content delivery such as handling requests from messages sent from handsets. A platform will also provide reports of messages sent and receiving and revenues earned from PSMS.
D2C – Direct to Consumer
Flat Rate Data – see Mobile Data Charges
ICSTIS – The premium rate billing regulator, who are now renamed PhonepayPlus. All providers of PSMS must be registered with them as a service provider. They have the power to raise fines for breaches of their regulations, but only against the service provider and not the content provider – hence the service provider for the Richard and Judy Scandal, Eckoh received the fine, not Channel 4 themselves.
IP – Internet Protocol – any data that is sent or received using the internet.
J2ME – Java-based development language used for many mobile applications, especially games
MMS – Multi Media Message Service – with the advent of colour screens and phone cameras, it was developed by mobile networks as a replacement for SMS. MMS allows the user to send and receive pictures, audio and short video content (around 250k files). The cost of MMS combined with limited user need has seen a relatively small take up, with 100 million messages per month being sent in the UK (around 2% of the SMS volumes).
Mobile Data Charges – refers to mobile operator charges for accessing the internet and email. In effect, to download anything from the internet the user is charged for data. This can be as high as £7 per megabyte and is additional to a PSMS charged by the content provider. Many users are not aware of the data charges until they appear on their phone bill. Recent flat rate data charges – around £7.50 per month for 1 – 2 gig of downloads has alleviated this, but mobile users not on a flat rate plan are likely to be put off downloading content due to the high charges.
Mobile Operating Systems – There are a number of mobile operating systems used by handset manufacturers – Symbian, Windows Mobile, Ajax, Linux. There are other systems specific to certain phones such as the Blackberry and the iphone. The battle for the dominant mobile OS is likely to develop in the next 12 months and the main players will probably be Symbian, Windows Mobile and Google’s Android.
Mobile Operators – are the companies that own and operate the mobile infrastructure – in the UK they are Vodafone, T-Mobile, O2, Orange and 3. Operators such as Virgin Mobile lease capacity from the main operators.
Mobile Portal – an entry point into the mobile web. The mobile operators run their own portals, and is typically the first point of call for a mobile user logging on to the internet.
MSISDN – the number of a mobile phone. The MSISDN is carried in all SMS and MMS and offers an ideal way to identify a specific user. It cannot be identified when the mobile user is browsing the internet.
Ofcom – The telecoms and media regulator. Any premium rate issues will be dealt with by PhonepayPlus (ICSTIS), but Ofcom will deal with non-premium issues such as SMS spam. Their site has excellent guidance on acceptable usage.
PSMS – Premium SMS – is a message that is charged to the users phone. The charge is on receipt of a message, sometimes referred to as a reverse billing SMS. In order to comply with the regulations, the user must send a request message to a shortcode (a 5 or 6 digit number).
The price of the PSMS is determined by the shortcode number used for the message. These shortcodes are priced at 10p, 25p, 50p, 75p, £1, £1.50, £3 and £5. Billings can also be multiples of the price eg 2 x £1, where the user will receive 2 messages at £1.
Shortcode – a five or six number code for both receiving SMS from and sending Premium SMS to mobile users. Each shortcode is owned by a service provider who aggregates the number across all of the major networks. Shortcodes are country specific and cannot be sent/received outside the country of origin.
SMS – Short Message Service – an SMS is 160 characters of text and 12 characters of header (such as a reply number). Unlike email, for example, an SMS cannot carry additional header information or picture or video content. There are over 4 billion text messages sent each month in the UK – more messages than voice calls made.
SMSC – SMS Centre or gateway. An SMS centre provides a connection between the mobile networks and the internet. They will typically act as an aggregator by offering a single IP-based connection across all networks. They will also set up and get the agreements for shortcodes across the mobile operators.
Subscription/Recurring Billing – is a revenue option that allows the content provider to accept a single SMS request from a mobile user and continue to send messages monthly, weekly or even daily until an opt out or ‘STOP’ message is received. This was commonly used in the ringtone market boom as a method of maximising revenue. However stricter controls have been put in place, particularly with regard to subscription billing from under 16s.
URL Sending – a common method for delivering content by SMS. The text message will contain a URL link, which, when opened will download the content.
WAP – Wireless Application Protocol – the protocol has been widely available since 2000 and was designed to offer a simplified version of web browsing from mobile phones.
Wap Push – or Wap Push Message is a method of delivering mobile content by SMS. The Wap Push is essentially a text message with a URL to the content and configured as a Service Message. It will prompt the handset user to open the URL or download the content. Due to abuse by unscrupulous companies Wap Push can no longer be used in Premium SMS.
Wireless – it used to be the word my grandparents used for their radio! These days it general refers to wireless computer networks, or WiFi. Confusingly ‘wireless’ tends to be the term used in the states for mobile networks.
WML – Wireless Mark Up Language – similar to HTML, WML was designed to be specifically used on mobile. As mobile handsets have developed WML has become less important for delivering web-type content, with XML, compact HTML and HTML also running on many mobile browsers.
© Mark Brill, Ping Corporation Ltd 2007
Monday, October 29, 2007
The Mobile Goldmine?
The predictions are that mobile content - pictures, audio, video and games - will be a massive market within the next few years. What are the opportunities and threats for developers of that content? Mark Brill from Ping Corporation Ltd looks at the issues for mobile content, and what the future may hold.
The Opportunities
All of the research shows that mobile content is going to be massive in the next five years. Screen digest estimated the value of this content to be £5.46bn a year by 2011. A 2006 Gartner Survey estimated that mobile content would be worth a less conservative $78 billion within the next 5 years.
We have already seen a 'first wave' of mobile content, largely dominated by ringtones and backgrounds. However the predicted 'second wave' of mobile content is almost upon us and it is expected to generate greater revenues, with a longer lifespan than the first wave.
What will bring about this second wave?
The growth in mobile content will be driven by improvements in technology such as higher resolution screens, better software and improved data connections, such as 3G.
Handset technology is converging with internet technologies through the introduction of devices such as the I-phone and the impending Google Phone. The line between phone, music or video player and PDA is becoming seamless.
At the same time the mobile phone operators are reviewing their pricing policies for data. Until recently, the cost of downloading was a few pounds per megabyte. This was a major barrier to downloading content. Most of the operators in the UK are now offering a flat rate for data, following a similar model to home broadband.
Premium SMS offers a simple revenue model allowing micro payments to be taken quickly. Identifying a phone number through SMS also allows for easy user and age verification with content restriction to unregistered phones.
The growth of 3rd party developers will continue. Many industry observers regard D2C (direct to consumer) as the most likely area to succeed with the most engaging content and the best user experience.
With over 3 billion phones worldwide, mobile technology is in wider use than PC-based internet access or television. As such it has the potential to become an enormously powerful tool for selling and distributing http://www.blogger.com/img/gl.link.gifcontent. A goldmine for mobile content providers.
Selling onto mobile
Typically the route to market is as follows:
* Content is created - pictures, video or audio
* The content provider sells through a distributor - such as Player-X or direct to the consumer via a platform such as .
Distributors will generally work with operator portals, such as Vodafone Live or T-Mobile's T-Zones. This is always operated on a revenue share - the content is not bought outright, but the revenue from Premium SMS is shared between the portal, distributor and content developer.
A D2C platform, such as immedia24 offers considerably more control over the content and a larger revenue share. Potentially it has a higher audience than the operator portal simply because many operators insist on exclusivity for content. The disadvantage is that there is no existing mobile customer base. D2C works well where there is already an audience through the web or other media, or where there is an advertising budget to see the content.
The Threats
In spite of some great opportunities, there are still many problems with creating and delivering mobile content.
Mobile Internet is accessed by only 23% of mobile users in the UK. Although at over 15m people that is still a considerable market, it is not as ubiquitous as SMS.
Whilst there are many people who can create great mobile content, the route to delivery is problematic. The mobile operators have generally regarded themselves as the key providers of mobile content, assuming that most people will want to download through their portals. However, it has been shown that the mobile users do not regard their operator as a trustworthy content provider. Operator Interference The operators have tried to restrict 3rd party content in many ways. Unlike an internet service provider, the mobile operators' online connections are made via their portals. Not only do they restrict which sites can be accessed, but they often alter the content itself. Ostensibly this has been under the guise of formatting the content for mobile, however there are examples of operators altering the display of 3rd party sites to remove much of the functionality and ruin the user experience.
Poor User Experience
The problems with poor user experience also relates to both the handsets themselves and the route to delivery. Whilst screen resolution, memory and functionality have improved on many handsets, usability can still be poor. The I-phone for example has been plagued with problems - everything from the battery life to high data charges. In the UK the I-phone will be locked to the O2 network. So if you want to change networks you will simply be left with a £400 brick!
At the point of download user experience has been equally poor. For example 3g in the UK is not as fast as broadband and is not always available. Poor pricing policies have compounded these problems. High profile Premium Rate rip-offs combined with confusing charges has resulted in many mobile users steering well clear of anything that may involve a premium rate SMS for downloading. Although flat rate data pricing is common place in the UK, the charges for accessing data abroad are still over £7 per megabyte.
Compatibility
A variety of operating systems, screen sizes and screen ratios make delivery of pictures, video and audio somewhat problematic. This is largely a technical issue for developers rather than the content creator. However the fact that there are few standards in mobile operating systems means that in the end the user will suffer. One poor experience with mobile content can put a user off for a very long time.
Low Premium Rate SMS Payouts
Whilst Premium SMS (PSMS) offers some great opportunities for both micro billing and non-credit card billing systems, the payouts offered by the networks are very low. For a £1.50 PSMS that the user pays (£1.26 after VAT), the operator and aggregator will take over 30p. This figure can be much higher on some networks. This leaves little over 90p for the content provider, creator or developer.
It means that the content provider can be forced into a position of charging considerably more for mobile content than when it is delivered though credit card billing on a web-site.
The Possibilities
With all these draw backs you may be thinking that there is little point in pursuing the Mobile Goldmine. However the potential of the mobile content market clearly exists. The issue, as with any new information technology, is to ensure that the needs of the user are understood and clearly met.
The convergence argument suggests that as we adopt more I-phone style handsets the line between mobile and web will disappear. Simply put, there is no need for developers to worry about mobile content specifically as we will all have the web on our phones.
Looking at the threats outlined above, it is clear that a division will remain between the internet and mobile. Inevitably small screen sizes and keypads will always create a different experience for the user. If I look at my own usage of mobile internet, I will acknowledge an email, but not write a lengthy reply. Whilst I may search for a film showing time or check an address on my web connected phone, I would not use it to book a flight or make a bank transfer. That is, as much as anything else a practical consideration of what it is possible to do with a small keyboard or screen.
Understanding the Technology
The key to accessing the Mobile Goldmine is to understand the relationship between a user and the technology. For example, we relate to our TV quite differently to our PC and the web, even though these days the technologies are similar.
What is the relationship between a user and their phone?
* Primarily it is for SMS (over 4 billion are sent each month in the UK) and phone calls
* It is a means of storing phone numbers - over 60% of people use their mobile as their main, often their only address book
* It is a means of killing time - playing games or sending messages while waiting for a bus, train or friend
* The phone is linked to personal identity
This last point is significant. For many people, the phone that they own, the ringtone or the background are all statements about how they see themselves. It is a highly personal item that is with them almost of the time. We have seen this in our studies with teenage mobile users, where their phone is now more significant to their peers than the clothes or the trainers they wear. Two years ago the Motorola Razor was the best selling phone, even though it performed the worst in usability tests. It was sleek, flat and came in bright pink. These factors were more important than the practical considerations.
Thus the key to successful mobile content is to develop specific content that meets the needs of the user. The first key to success is good usability. It is estimated that for each additional click required to access content, the provider will loose 30% of it's potential audience.
It should then engage the user in a way that supports their identity. In some areas, such as music or sport it is quite straight forward to engage at this level. In sectors such as the film or television, it may prove to be harder requiring more creative skills and ideas. It is also important to view mobile content not as an end in itself, but as a tool to enhance the user's experience across many platforms, such as the web, television or cinema. There are numerous examples where the web has successfully been used to enhance and support more traditional media and mobile may be used in the same way.
Ultimately the best approach to developing mobile content is not to be driven by the capabilities of the technology, but rather to understand the user's relationship with their phone and produce clever and engaging content.
The Opportunities
All of the research shows that mobile content is going to be massive in the next five years. Screen digest estimated the value of this content to be £5.46bn a year by 2011. A 2006 Gartner Survey estimated that mobile content would be worth a less conservative $78 billion within the next 5 years.
We have already seen a 'first wave' of mobile content, largely dominated by ringtones and backgrounds. However the predicted 'second wave' of mobile content is almost upon us and it is expected to generate greater revenues, with a longer lifespan than the first wave.
What will bring about this second wave?
The growth in mobile content will be driven by improvements in technology such as higher resolution screens, better software and improved data connections, such as 3G.
Handset technology is converging with internet technologies through the introduction of devices such as the I-phone and the impending Google Phone. The line between phone, music or video player and PDA is becoming seamless.
At the same time the mobile phone operators are reviewing their pricing policies for data. Until recently, the cost of downloading was a few pounds per megabyte. This was a major barrier to downloading content. Most of the operators in the UK are now offering a flat rate for data, following a similar model to home broadband.
Premium SMS offers a simple revenue model allowing micro payments to be taken quickly. Identifying a phone number through SMS also allows for easy user and age verification with content restriction to unregistered phones.
The growth of 3rd party developers will continue. Many industry observers regard D2C (direct to consumer) as the most likely area to succeed with the most engaging content and the best user experience.
With over 3 billion phones worldwide, mobile technology is in wider use than PC-based internet access or television. As such it has the potential to become an enormously powerful tool for selling and distributing http://www.blogger.com/img/gl.link.gifcontent. A goldmine for mobile content providers.
Selling onto mobile
Typically the route to market is as follows:
* Content is created - pictures, video or audio
* The content provider sells through a distributor - such as Player-X or direct to the consumer via a platform such as .
Distributors will generally work with operator portals, such as Vodafone Live or T-Mobile's T-Zones. This is always operated on a revenue share - the content is not bought outright, but the revenue from Premium SMS is shared between the portal, distributor and content developer.
A D2C platform, such as immedia24 offers considerably more control over the content and a larger revenue share. Potentially it has a higher audience than the operator portal simply because many operators insist on exclusivity for content. The disadvantage is that there is no existing mobile customer base. D2C works well where there is already an audience through the web or other media, or where there is an advertising budget to see the content.
The Threats
In spite of some great opportunities, there are still many problems with creating and delivering mobile content.
Mobile Internet is accessed by only 23% of mobile users in the UK. Although at over 15m people that is still a considerable market, it is not as ubiquitous as SMS.
Whilst there are many people who can create great mobile content, the route to delivery is problematic. The mobile operators have generally regarded themselves as the key providers of mobile content, assuming that most people will want to download through their portals. However, it has been shown that the mobile users do not regard their operator as a trustworthy content provider. Operator Interference The operators have tried to restrict 3rd party content in many ways. Unlike an internet service provider, the mobile operators' online connections are made via their portals. Not only do they restrict which sites can be accessed, but they often alter the content itself. Ostensibly this has been under the guise of formatting the content for mobile, however there are examples of operators altering the display of 3rd party sites to remove much of the functionality and ruin the user experience.
Poor User Experience
The problems with poor user experience also relates to both the handsets themselves and the route to delivery. Whilst screen resolution, memory and functionality have improved on many handsets, usability can still be poor. The I-phone for example has been plagued with problems - everything from the battery life to high data charges. In the UK the I-phone will be locked to the O2 network. So if you want to change networks you will simply be left with a £400 brick!
At the point of download user experience has been equally poor. For example 3g in the UK is not as fast as broadband and is not always available. Poor pricing policies have compounded these problems. High profile Premium Rate rip-offs combined with confusing charges has resulted in many mobile users steering well clear of anything that may involve a premium rate SMS for downloading. Although flat rate data pricing is common place in the UK, the charges for accessing data abroad are still over £7 per megabyte.
Compatibility
A variety of operating systems, screen sizes and screen ratios make delivery of pictures, video and audio somewhat problematic. This is largely a technical issue for developers rather than the content creator. However the fact that there are few standards in mobile operating systems means that in the end the user will suffer. One poor experience with mobile content can put a user off for a very long time.
Low Premium Rate SMS Payouts
Whilst Premium SMS (PSMS) offers some great opportunities for both micro billing and non-credit card billing systems, the payouts offered by the networks are very low. For a £1.50 PSMS that the user pays (£1.26 after VAT), the operator and aggregator will take over 30p. This figure can be much higher on some networks. This leaves little over 90p for the content provider, creator or developer.
It means that the content provider can be forced into a position of charging considerably more for mobile content than when it is delivered though credit card billing on a web-site.
The Possibilities
With all these draw backs you may be thinking that there is little point in pursuing the Mobile Goldmine. However the potential of the mobile content market clearly exists. The issue, as with any new information technology, is to ensure that the needs of the user are understood and clearly met.
The convergence argument suggests that as we adopt more I-phone style handsets the line between mobile and web will disappear. Simply put, there is no need for developers to worry about mobile content specifically as we will all have the web on our phones.
Looking at the threats outlined above, it is clear that a division will remain between the internet and mobile. Inevitably small screen sizes and keypads will always create a different experience for the user. If I look at my own usage of mobile internet, I will acknowledge an email, but not write a lengthy reply. Whilst I may search for a film showing time or check an address on my web connected phone, I would not use it to book a flight or make a bank transfer. That is, as much as anything else a practical consideration of what it is possible to do with a small keyboard or screen.
Understanding the Technology
The key to accessing the Mobile Goldmine is to understand the relationship between a user and the technology. For example, we relate to our TV quite differently to our PC and the web, even though these days the technologies are similar.
What is the relationship between a user and their phone?
* Primarily it is for SMS (over 4 billion are sent each month in the UK) and phone calls
* It is a means of storing phone numbers - over 60% of people use their mobile as their main, often their only address book
* It is a means of killing time - playing games or sending messages while waiting for a bus, train or friend
* The phone is linked to personal identity
This last point is significant. For many people, the phone that they own, the ringtone or the background are all statements about how they see themselves. It is a highly personal item that is with them almost of the time. We have seen this in our studies with teenage mobile users, where their phone is now more significant to their peers than the clothes or the trainers they wear. Two years ago the Motorola Razor was the best selling phone, even though it performed the worst in usability tests. It was sleek, flat and came in bright pink. These factors were more important than the practical considerations.
Thus the key to successful mobile content is to develop specific content that meets the needs of the user. The first key to success is good usability. It is estimated that for each additional click required to access content, the provider will loose 30% of it's potential audience.
It should then engage the user in a way that supports their identity. In some areas, such as music or sport it is quite straight forward to engage at this level. In sectors such as the film or television, it may prove to be harder requiring more creative skills and ideas. It is also important to view mobile content not as an end in itself, but as a tool to enhance the user's experience across many platforms, such as the web, television or cinema. There are numerous examples where the web has successfully been used to enhance and support more traditional media and mobile may be used in the same way.
Ultimately the best approach to developing mobile content is not to be driven by the capabilities of the technology, but rather to understand the user's relationship with their phone and produce clever and engaging content.
Wednesday, July 25, 2007
Mint's SMS Payment Service
Mint, the credit card company, has launched an SMS alert and payment service for their customers. It works by sending the balance and minimum payment to their customers to coincide with the monthly statement.
They can reply by text giving the amount they wish to pay.
Customers signing up for the mobile service register their debit card and mobile phone details before agreeing a security code word, which is transmitted in all messages.
Mint offered this service after research showed that 27% of UK adults say they are too busy to pay by traditional methods.
Too often SMS based systems, especially for banking and finance are over blown and complex. This is a good example of a simple application that will benefit the customer and reduce costs to the bank.
They can reply by text giving the amount they wish to pay.
Customers signing up for the mobile service register their debit card and mobile phone details before agreeing a security code word, which is transmitted in all messages.
Mint offered this service after research showed that 27% of UK adults say they are too busy to pay by traditional methods.
Too often SMS based systems, especially for banking and finance are over blown and complex. This is a good example of a simple application that will benefit the customer and reduce costs to the bank.
Tuesday, July 24, 2007
Avoiding SMS and Phone Scandals
With the recent scandals involving phone and text lines in the media, public confidence has been damaged and the reputation of companies providing these services has been tarnished.
Recent scandals were: Richard and Judy Phone-In, Blue Peter Phone In, voting for ITV programmes by SMS.
Inevitably this is a small number from many phone-based transactions that are correctly carried out. However, it has led to a 20% drop in ITV’s revenues and BBC removing these from their programmes.
This paper looks at what the issues are for companies providing these services and how txt4ever and immedia24 systems and service avoid such problems.
Why Has There Been Problems?
Firstly it is important to take a look at why some of these errors occurred:
Richard and Judy Show, Channel 4
The problem was that the winner had been chosen some time before the lines had been closed. In effect people were paying to enter a competition which they could not win.
This problem had occurred because the team at their telecom provider, had made a decision to do this.
The biggest issue with this seems to be one of accountability. Who, at a senior level at the telecoms company or for that matter, Channel 4 was ensuring that the competition was complying with the regulations?
X-Factor, ITV
In this instance viewers were charged 50p rather than the advertised 35p giving a reported £200,000 of additional income.
ITV uncovered the problem during their own audit and responded quickly by making a sizable donation to charity. They were not fined by Ofcom.
The reasons for this error have not been reported, but it is likely to be human error where the systems were set to bill at the wrong price. Each ‘price’ is linked to a specific PSMS number – a 5 digit short code. It is quite possible that operators could have mistakenly chosen the wrong 5 digit number.
The BBC Blue Peter scam was connected to a phone-in, but it was not a telecoms error. The TV producers picked a ‘winner’ from the studio audience, not the voters.
Prevention
Built in Systems
It is important that systems prevent the possibility of human error or fraudulent activity as much as possible.
For example, with the problems at Channel 4, it would have been relatively simple to design the system so that the winner was picked out from the database of entrants. Once this had been done the system would no longer allow entries.
With the incorrect price setting in the X-Factor scenario, it is impossible to do this within immedia24 or txt4ever. All of our premium rate systems work on the basis of replying to an incoming message from a user.
The cost of the reply is clearly shown when it is set by the user, rather than simply showing the 5 digit number used. There is a further confirmation once this has been set.
The system also generates the necessary copy to add to any publicity or announcement (eg texts cost 25p + 1 message at your standard rate).
Thus the only way to make an error with the system is to act either fraudulently or negligently by ignoring the published rates and changing the price shown on the copy.
Open Accounting
Aside from improving systems, the human error or even dishonest side cannot be ignored. To prevent many of these problems there should have been better checking at a more senior level. Better accounting on the side of the TV companies may have helped prevent these problems.
Our systems are designed to give clients complete accounting on a real-time basis. So, for example if an SMS was advertised at 35p but was charging 50p the end client could view the live messages and see that there was an error.
All of our message reports and transaction reports can exported as a data file, which can be used by clients for accounting and further analysis.
On our customer support side, we monitor all of our systems throughout the day and test each new campaign set up by our clients.
Our own back end accounting system will also highlight any anomalies in the billing system. An example of how this has been managed is with fraudulent credit card transactions relating to our personal SMS product. We discovered a number of transactions from non-UK users that were clearly fraudulent in spite of the fact that they passed checks by both the bank and online processor. The system that we designed eradicates the fraud problem by checking the user details along side the username, password and even some message content. This is something that the credit card processing companies have been unable to do.
We are therefore confident that we can initiate other fraud checking and prevention facilities for other areas in our system.
Terms and Conditions Penalties
Along with providing good systems and accountability, we have included penalties in our Terms and Conditions which requires our clients to ensure the good management of their campaigns. Where conditions have been breached, for example a premium SMS campaign where the advertised price is different to the actual price, we would have the right to both suspend and account and to retain outstanding monies to cover any losses. Even though an out-payment to a supplier would be around 90p for a £1.50 premium message, we would retain all of the £1.50 in order to facilitate a refund to the mobile user – something that would be impossible to do via the mobile phone networks.
Conclusion
TV voting and phone-in’s have been seen as the pot of gold at the end of the rainbow by both broadcasters and telecoms providers alike. This gold-rush by some telecoms providers has not necessarily been matched by good technology or accounting systems to manage this. This is not surprising in an industry which is characterised by hidden and expensive charges.
The profits of the last few years from TV-based voting are set to drop. Channel 4 has halved the price of Big Brother Voting and the general decline in viewers to reality TV will see fewer voters.
The focus of our products and our service is very different to this. Our underlying ethos is not about gaining a quick buck from a TV campaign. What we are doing is creating an ongoing and beneficial relationship with our customers and the end mobile user.
Recent scandals were: Richard and Judy Phone-In, Blue Peter Phone In, voting for ITV programmes by SMS.
Inevitably this is a small number from many phone-based transactions that are correctly carried out. However, it has led to a 20% drop in ITV’s revenues and BBC removing these from their programmes.
This paper looks at what the issues are for companies providing these services and how txt4ever and immedia24 systems and service avoid such problems.
Why Has There Been Problems?
Firstly it is important to take a look at why some of these errors occurred:
Richard and Judy Show, Channel 4
The problem was that the winner had been chosen some time before the lines had been closed. In effect people were paying to enter a competition which they could not win.
This problem had occurred because the team at their telecom provider, had made a decision to do this.
The biggest issue with this seems to be one of accountability. Who, at a senior level at the telecoms company or for that matter, Channel 4 was ensuring that the competition was complying with the regulations?
X-Factor, ITV
In this instance viewers were charged 50p rather than the advertised 35p giving a reported £200,000 of additional income.
ITV uncovered the problem during their own audit and responded quickly by making a sizable donation to charity. They were not fined by Ofcom.
The reasons for this error have not been reported, but it is likely to be human error where the systems were set to bill at the wrong price. Each ‘price’ is linked to a specific PSMS number – a 5 digit short code. It is quite possible that operators could have mistakenly chosen the wrong 5 digit number.
The BBC Blue Peter scam was connected to a phone-in, but it was not a telecoms error. The TV producers picked a ‘winner’ from the studio audience, not the voters.
Prevention
Built in Systems
It is important that systems prevent the possibility of human error or fraudulent activity as much as possible.
For example, with the problems at Channel 4, it would have been relatively simple to design the system so that the winner was picked out from the database of entrants. Once this had been done the system would no longer allow entries.
With the incorrect price setting in the X-Factor scenario, it is impossible to do this within immedia24 or txt4ever. All of our premium rate systems work on the basis of replying to an incoming message from a user.
The cost of the reply is clearly shown when it is set by the user, rather than simply showing the 5 digit number used. There is a further confirmation once this has been set.
The system also generates the necessary copy to add to any publicity or announcement (eg texts cost 25p + 1 message at your standard rate).
Thus the only way to make an error with the system is to act either fraudulently or negligently by ignoring the published rates and changing the price shown on the copy.
Open Accounting
Aside from improving systems, the human error or even dishonest side cannot be ignored. To prevent many of these problems there should have been better checking at a more senior level. Better accounting on the side of the TV companies may have helped prevent these problems.
Our systems are designed to give clients complete accounting on a real-time basis. So, for example if an SMS was advertised at 35p but was charging 50p the end client could view the live messages and see that there was an error.
All of our message reports and transaction reports can exported as a data file, which can be used by clients for accounting and further analysis.
On our customer support side, we monitor all of our systems throughout the day and test each new campaign set up by our clients.
Our own back end accounting system will also highlight any anomalies in the billing system. An example of how this has been managed is with fraudulent credit card transactions relating to our personal SMS product. We discovered a number of transactions from non-UK users that were clearly fraudulent in spite of the fact that they passed checks by both the bank and online processor. The system that we designed eradicates the fraud problem by checking the user details along side the username, password and even some message content. This is something that the credit card processing companies have been unable to do.
We are therefore confident that we can initiate other fraud checking and prevention facilities for other areas in our system.
Terms and Conditions Penalties
Along with providing good systems and accountability, we have included penalties in our Terms and Conditions which requires our clients to ensure the good management of their campaigns. Where conditions have been breached, for example a premium SMS campaign where the advertised price is different to the actual price, we would have the right to both suspend and account and to retain outstanding monies to cover any losses. Even though an out-payment to a supplier would be around 90p for a £1.50 premium message, we would retain all of the £1.50 in order to facilitate a refund to the mobile user – something that would be impossible to do via the mobile phone networks.
Conclusion
TV voting and phone-in’s have been seen as the pot of gold at the end of the rainbow by both broadcasters and telecoms providers alike. This gold-rush by some telecoms providers has not necessarily been matched by good technology or accounting systems to manage this. This is not surprising in an industry which is characterised by hidden and expensive charges.
The profits of the last few years from TV-based voting are set to drop. Channel 4 has halved the price of Big Brother Voting and the general decline in viewers to reality TV will see fewer voters.
The focus of our products and our service is very different to this. Our underlying ethos is not about gaining a quick buck from a TV campaign. What we are doing is creating an ongoing and beneficial relationship with our customers and the end mobile user.
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