With a whole raft of television programmes now offering an interactive voting element to the mix, the potential revenue from messaging is enormous. There are, however, challenges to overcome says Paul Harvey, global market development manager, product messaging at Logica CMG Wireless Networks.
SMS voting has, within a very short time, become the ‘norm’ in the world of reality TV with series’ including Big Brother, Blind Date, I’m A Celebrity Get Me Out Of Here and Pop Idol all cashing in on the lucrative revenue-generating application.
And it’s easy to see why. Last year, Endemol’s Big Brother 3 in the UK received more than 13 million text votes, generating mobile operator O2 approximately Â£1.3m in revenue. Interactive TV (iTV) veteran, MTV, introduced Videoclash, a SMS-led music programme, in 2001 which now receives over 40,000 SMS messages every hour from viewers registering play list votes and to post greetings for the real-time message board.
Analysts agree that text messaging will play a major role in fuelling the growth of iTV in the coming years, helping it increase 18 fold in Europe to top Â£12.3 billion by 2007.
But according to industry views raised at the Mass Media Messaging Seminar, at The British Academy of Film & Television Arts, there are still barriers to SMS voting, MMS and new 3G services reaching their full potential in the entertainment industry. Although the market offers plenty of opportunities spanning TV, music, sports and gaming — as well as drawing a diverse age and social group customer base — there are significant challenges facing providers looking to cash in on this new revenue stream.
As Steve Van Zanen, VP market development for messaging at LogicaCMG Wireless Networks points out, “The mobile phone can be a lot of things to a lot of people — a lifestyle device, a location tool or a personal management tool.” But making the mobile phone work as an entertainment device requires the support of handset and software developers to remove product barriers such as compatibility between devices, display quality and so on, as well as support from carriers to buy into the business model on an integrated, pan-European scale.
Furthermore, it requires a close co-operation between network operators, the entertainment channels and content developers to surmount issues of revenue sharing, billing and interoperability.
In terms of impact on take-up of interactive messaging, however, quality of service and revenue assurance are clearly emerging as two of the most prominent concerns facing companies involved in this industry.
Assuring that all votes are polled is essential — as seen with last year’s Pop Idol (UK) vote when BT worked hard to avoid network meltdown from the 8.7 million premium rate fixed line phone votes that flooded in for Will and Gareth. If votes do not get through, media and public outcry over alleged poll rigging could ensue. The negative impact on the reputations of both the broadcast companies and the network operators — fixed and mobile — of this kind of situation can be both significant and enduring, potentially affecting similar polls in the future and fuelling discussion in the media, school yards and pubs across the country.
If problems can emerge for relatively simple voting mechanisms like fixed line voting, then consider the complexities that could arise with SMS voting.
Tony Riley, co-director of Mobile Enterprise magazine, is sceptical that all of the votes cast via SMS for reality TV programmes are actually successfully counted in the final result. “If you consider how sometimes texts can take hours to arrive when they are sent from a friend, in peak times, how can operators be sure all the SMS votes have arrived if the result is announced just a few hours later?”
Although traffic peaks can occasionally cause problems, it is fair to say that most UK operators now have robust telecoms-class messaging solutions in place to ensure that overloads do not hamper service quality. The log-jam on SMS networks at the final whistle of this month’s Rugby World Cup final illustrates that there are occasions that potentially challenge service capacities, but these days this is more the exception than the rule.
Lack of understanding
However, issues continue to emerge as a result of a lack of understanding about the applications that run at the edge of the SMS network, how these can effect the reliability of the system and, subsequently, the effect on quality of service that the customer receives.
When a viewer sends a vote they need to enter the short number as well as type the name of the contestant that is voted for e.g. VOTE GARETH. As a result, applications need to receive the vote, acknowledge who was voted for, tally the votes and then communicate back to the Short Message Service Centre (SMSC) that the correct vote has been counted. The SMSC then needs to contact the voter within an acceptable time span to advise that the correct vote has been received successfully.
Understandably, if the networks and applications fail to deliver this integrated, end-to-end process, there is substantial room for error, poor quality of service and, ultimately, many dissatisfied voters. Fortunately there are solutions which provide capacity for data flow growth, reduced total cost of ownership and, as a result, a greater average revenue per user (ARPU) for network operators. All in addition to building loyalty amongst happy voters who come back time and time again.
Clearly, the relationships currently exisiting between network operators, TV companies and content providers need to be developed before a truly seamless, customer-orientated service can be delivered. As Daren Siddall, emerging platforms and devices media analyst at Gartner, points out, “…SMS voting, video clips and other technologies are gaining greater customer acceptance. However, we need to be careful and ensure that future technologies are easy to use for the consumer.”
By building relationships and sharing the wealth of data that each party is able to mine on users, providers can move towards ensuring that messaging services strike target markets and that content is provided in a format that will be adopted. Understanding the market, the type and format of entertainment that each audience sector is looking for and what makes customers tick is a key to unlocking the potential revenues of mass messaging for this industry.
John Delaney, principal analyst, Ovum, observed that “TV was originally seen as a passive media, something that you sit back and watch…[iTV works] because people like to get involved. iTV and SMS TV provides a way for people to get passionate, influence decisions or at least discuss things with a community.”
As TV firms and production companies take a cut of the return that network operators generate from TV voting, ring tones and other mCommerce, revenue assurance is another issue for the likes of MTV, Endemol and Flytxt. During the seminar, participants said they still had some reservations about SMS voting due to the potential revenue loss that can emerge from prepay mobile phones used predominately amongst the youth audience.
Many prepay users have realised that they are billed on return of message, so if the inbox is full, the phone is switched off or the credit limit over run then the customer will not be charged. A proportion of zero is nothing, so this is not an attractive proposition to TV firms, especially with higher cost items like ring tones.
According to Alan Coad, senior VP EMEA & South America, LogicaCMG Wireless Networks, this is an unnecessary leakage of revenue. Technology to combat this fraudulent behaviour is widely available from companies that have introduced revenue assurance solutions to close these mobile operator billing loopholes. This removes one of the obstacles that are preventing messaging from reaching its full potential in the entertainment industry.
Clarity of charges
Other billing issues continue to hamper the mobile messaging industry with clarity of charges across domestic, as well as pan-European networks, required to stimulate mass adoption. Industry commentators often say that mobile operators take too much of a profit cut, forcing up the end charge to users, whilst content providers highlight issues that exist within the industry and call for distribution of revenues generated by SMS voting to be accelerated.
Finally, with the growth of MMS and 3G, the issue of digital rights management (DRM) needs to be addressed before it can become a compelling offering for both consumers and content providers. Matthew Kershaw, head of Interactive at MTV, summarised, “The DRM technology isn’t there, which is a hindrance to the usage of MMS and 3G technologies by TV and content firms.”
There is great brand awareness to be achieved if a TV or music firm’s video-clip is texted to hundreds of people but there is a clear need for some form of forward-locking technology to encrypt messages that are sent on. Without a DRM solution to protect the content, little revenue can be recouped from the activity and content providers will find themselves in the same situation music firms did with Napster.
In summary, mass media messaging and mCommerce have the potential to become lucrative areas for the entertainment industry and operators alike. However, operators, TV producers and media channel owners need to forge closer relationships to ensure that the systems truly work. Without greater arbitration, the entertainment industry will be slow in its adoption of mass media messaging and all those involved will miss out on the significant branding and revenue opportunities available.