Issue 38 • MAR 2013
Operator content sales tank, but direct billing could net $13bn a year revenues from mobile content, monetised through direct carrier billing, is expected to rise from $2bn last year to more than $13bn by 2017, according to a new report from Juniper Research. The report observed that operator storefronts and portals now accounted for just 6% of content downloads worldwide, with Google Play and Apple’s App Store now comprising nearly 70% between them. Indeed, the report noted that the increasing popularity of OTT (Over The Top) stores had led to many operators closing their own storefronts. However, the report - Mobile Content Business Models: OTT & Operator Strategy & Forecasts 2013-2017 - found that by offering carrier billing to third-party storefronts, operators could more than offset the continued decline in portal revenues. According to the report, storefronts which have already integrated carrier billing solutions have seen a 5-6x increase in conversion rates compared with credit card billing, together with an uplift in average transaction values. Furthermore, it observed that the implementation of carrier billing allowed storefronts and developers to monetise unbanked/ underbanked regions and demographics for the first time. As report author Dr Windsor Holden pointed out, “While many operators have now abandoned the own-brand storefront approach, by leveraging their billing relationship with the end user they can retain a foothold in the content play. Simply by offering consumers a billing choice, monetisation rates will rise dramatically.” There is another factor that might play into the hands of operators too. Research by one-click payment provider Flexion Mobile suggests that Google Play is underperforming for developers, resulting in dramatically lower revenues. Whilst Android is generally considered to be weaker in terms of monetisation than other smartphone platforms, Flexion recently conducted some research to find out how bad it is. The study found that mobile operator billing is on average ten times more effective in terms of conversion than Google Play billing. In Flexion’s study, Google Play’s in-app billing offered at best around 1% conversion from free trial to purchase. In other Android stores that use operator billing the conversion rate can be up to 10% after free trial. This means that consumers could generate up to ten times more revenue for Android apps in Google Play if offered a different billing method. “Our research findings should act as a wake-up call for Google and developers,” said Jens Lauritzson, CEO of Flexion Mobile. “Android is the world’s fastest growing mobile OS and Google Play is the biggest app store and home to thousands of developers. We believe it is Google’s obligation to offer good monetisation tools and it is pretty clear that by mandating the use of a billing SDK that does not convert well, it puts the whole ecosystem in danger.”
THIS MONTH... News
The latest news from the industry, along with analysis of what that news means, including: • 4G could net retailers £1.8bn extra revenues, says eBay 3 • Not signing up to Weve akin to not signing Beatles, warns Voda 4 • Orca and Powwownow use VSCs to revamp conferencing 5 • York City pro launches social mobile betting service 6 • Big Data for telecoms – learn all about it in Dubai 6 • mBlox sells PSMS biz to OpenMarket 7 • LFC rolls out wifi at Anfield to offer better fan services 7
Analysis Editorial Life begins at 40 Mobile is 40 years old, but 4G holds the key to how it becomes truly omnipotent and we all starting thinking digitally 9 PAYMENTS Happy Customers In the first of his regular columns, Rory Maguire explians how customer service is key to good m-payments 10 DATA Brave New World Paul Skeldon explains how data is the new digital currency – and how you start collecting it safely 11 mGaming & msports special Ahead of the mGaming & mSports Summits in London on 24 April, we take a special look at: mGambling 12 Social mobile gambling 14 Mobile sports 15 mGaming & mSports Summit Preview 18
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The leading industry directory of services 17
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