off portal content
Brand owners generating large amounts of off-portal content transactions should be crucial to operators’ plans to recoup their 3G investments, says Echovox’s David Marcus.
Around 70% of European mobile content is now purchased off-portal – i.e. not through operator’s sanctioned websites or mobile services. For operators this poses a significant dilemma. Do they continue to try and woo their users with their bespoke content in order to retain control of the mobile environment – something which to date they have not had great success with? Or do they relinquish some control and work with content owners and big brands to deliver the more compelling content that consumers want?
Off-portal offers a great opportunity for operators to drive revenues and overcome the perennial issue of churn. This result can only be achieved by encouraging brands to think about mobile as a serious delivery channel and by including them as a crucial link in the mobile value chain.
Big brands can bring a great deal to the mobile industry, with their loyal customer bases, deep understanding of consumer needs and, fundamentally, the ability to offer the most exclusive, coveted and trusted content. It is with these companies that the power to increase content revenues and recoup the value of 3G investments lies in the long term.
The off-portal future
Operators have traditionally tried to protect their territory and own the mobile space. Sprint and Verizon in the US are apposite examples of how closed operators’ content services can be. However, the launch (and success) of i-mode shows how operators are increasingly looking for new ways of driving the mobile content industry. They are recognising the need to provide consumers with exclusive, sensational, branded content to make for a richer, more compelling experience. However the fact remains that less than 10% of Europeans have actually bought or browsed content on their mobile.
In the off-portal future, operators will have to conceed that their strengths lie in being the ‘network guy.’ Owning a portal is expensive and requires continual work and a specific set of skills more suited to content providers and brands. By reducing the control of mobile content portals, operators can focus on their core networking business and drive revenues. Leaving the content to the big brands – the consummate marketing experts – operators will undoubtedly enjoy increased content traffic, correspondingly greater revenues and, ultimately, increased subscriber loyalty.
The emergence of more household names in the mobile content space will no doubt help address the issues of trust which have dogged the industry in its infancy. Negative factors including cost, accessibility and scams have characterised the industry to date and have inevitably put people off. Speak to the average man on the street about downloading mobile ringtones or music and he will likely feel pretty wary. Reputable brands will bring with them a loyal customer base who feel more confident in purchasing content from a familiar source and are therefore more likely to do so.
Today’s ever discerning consumers like to have choice. They don’t like to be told what’s cool and they have different needs – the ‘Crazy Frog’ and ‘Manchester United’ wallpaper will not be to everyone’s taste. The widespread entry of brands as players in the mobile space will ensure that there is something for everyone. This range is not possible under operator led-models, whose prescriptive nature is currently limiting the potential of the industry.
Big brands will provide consumers with access to the most compelling content available. This ranges from clips of TV shows like ‘Lost’ or ‘24’ and music video exclusives, through to more innovative brand affiliation stunts. For instance, ‘Coca-Cola’s’ latest mobile content download, ‘Coca-Cola Soccer’. This provides users with a five-a-side football game on their mobile. Despite having no direct link to the Coca-Cola products it increases users’ brand affiliation associating Coca-Cola with fun and it encourages communities to go on and use exciting, relevent services.
Challenges to the off-portal revolution
Although the growth of off-portal content is extremely positive for the industry, there are still a number of key obstacles which must be overcome.
The biggest challenge is convincing the operators that it is most beneficial for them in the long term to be the traffic conduit rather than the content provider too. Money talks and carriers simply can’t afford to ignore the fact that getting as many brands as possible selling content will help them amortise their debts. Revenue share deals with content providers offer a profitable channel with little expenditure or effort on their part.
Currently, operators command approximately 40% of every transaction. This is not a sustainable model if carriers are to just provide the infrastructure. To maintain such profitable terms the operators will have to give something back to the content owner. Content brands might know their niche markets well, but mobile is a new area for them and mobile user data – who is downloading what and when – will be a valuable asset in assuring future success. As such we should expect to see revenue share deals change in the future and include an exchange of money for customer data and analysis.
The quality of off-portal content is a key issue in whether consumers are to remain loyal and increase their dependence on mobile as an information source. Approximately 40 per cent of people won’t try downloading content again if they have a bad experience the first time. Again the brand influence can not be underestimated in improving the user experience. However the experience is more than a content issue and it is vital that the industry – operators, content providers and ICTSIS – work together to expose companies who are merely looking to make a quick buck.
Content has to be useable and adapted for mobile use. The best content in the world will be devalued if it is not repurposed for the platform – i.e. it is ripped from a website or some other media and is not designed and delivered specifically for each handset and operator’s requirements.
Off-portal content offers a win-win situation for both operators and content providers. Brands need operators to reach mobile users and operators need brands to extend loyalty and accelerate the uptake of mobile content services.
It is clear that innovative, desirable and trustworthy content will be king as far as customers are concerned. If content providers, big brands and media companies can provide this reliably and consistently, the off-portal revenues should continue to grow exponentially. This is good, not only for the providers but also for operators who will benefit hugely from increased data traffic.
The one certainty at present is that everyone in the industry needs to work together to ensure the industry does not become tarnished by companies out to make a quick buck, thereby stunting the full potential of mobile content and services.
