Telemedia Magazine - Issue 32 by annika micheli

issue 32

Connecting consumers to media, content and billing

E M OF A G PHONES PREVIEWS OF:

WHERE NEXT FOR: NETWORKS > INTERNATIONAL MARKETS > M-PAYMENTS > PTV > RETAIL > MUSIC > SOCIAL MEDIA

GAME OF

features

CONNECTION LOST?

With 4G starting to come to market, are MNOs back in the game or will OTT services like Skype along with growing use of social media and wifi keep eroding those profits? Matthew Leach takes a look at how the way consumers connect is changing and what that means for operators

BRAVE NEW WORLD

Thanks to technological advancements, the world is getting smaller, while the population is steadily increasing and this provides global opportunities for mobile services and network operators. And it’s not all about fraud and arbitrage, explains Matthew Leach

R.E.S.P.E.C.T.

Has PSMS reached its limits as a billing tool? The rise of Payforit suggests that at the very least merchants are embracing this new billing tool. Here Paul Paterson, chief commercial officer, at ImpulsePay looks at why Payforit has finally got some respect from the boys and hints at where it goes next

SWINGS, ROUNDABOUTS AND THE NFC-SAW

While PayForIt is taking direct carrier billing into new realms, much attention is being placed on mobile payments – and the big boys are muscling in with wallets and all sorts on show at Mobile World Congress. But they all rely on NFC: is this really going to be the answer? Paul Skeldon reports

GAME OF PHONES

The gaming and gambling industry gets that mobile is a key platform, but does it yet fully understand what mobile’s role across its whole business actually is? Paul Skeldon finds that the real power of mobile in gambling goes way beyond just putting out an app or m-site

IN IT TO WIN IT

With record digital device shipments and a growing interest in monetising sports content and ‘experience’ via mobile, it looks like teaming telemedia services and sports is the dream team. Ahead of mSports Summit, Matthew Leach investigates what is on offer and how to make it score

PHONES SECOND SCREENS, FIRST PRIORITY

Second screening is key to the development of participation and interactive TV – and the revenues associated with it – but how can operators, TV companies and service providers make it happen? Adriana Menezes Whiteley, head of Farncombe’s Strategy Practice, specialising in marketing strategy for new Pay-TV products explains

A NEW GAME IN TOWN

LOOKING IN

Mobile is the darling of the retail industry at the moment. Everywhere you look there are fans shouting about how mobile can enhance the in-store experience and drive sales. But can the same be said for operators and service providers (SPs)? Ashley Bolser, MD, Bolser investigates what is – and isn’t – in it for the industry

CALLING THE TUNE

Music was going to be the key content service for mobile operators – but Apple changed all that. So where is mobile music at these days and what are the opportunities? Oisin Lunny, Senior Market Development Manager at OpenMarket, chaired a panel of mobile music industry experts to find out – first at the Heroes Of The Mobile Fringe festival in Barcelona during Mobile World Congress 2013, and then in various locations in London. Here’s what he got them singing

regulars Comment 04 Can MNOs really ‘Weve’ their way into m-commerce?

05 Analysis: Payments

Operators have it made with on-bill payments

05 Analysis: Chat & Dating

You have to be really tech-savvy to win at chat these days

Opinion: Gaming 06 Mobile Social is the key to mGaming

Gaming 07 Analysis: Soft games make mGaming mass market

Analysis: Data 08 Data is key to mobile services, but you have to be careful

Directory 43 The industry’s only

listing of who does what

People 46 Keeping tabs on the movers and shakers

JACK OF ALL TRADES

Social media is becoming the bedrock of how brands communicate with consumers, but it is also starting to become a platform for all sorts of services. Paul Skeldon takes a look at how social media is worming its way into the very fabric of how telemedia businesses operate

SHOW PREVIEWS MGAMING & MSPORTS

Check out the latest details on these two amazing shows in London on 24 April, 2013 telemedia issue 32

COMMENT

paul skeldon

ack in the mid 2000s operators tried to ring-fence the mobile content market for themselves. They set up portals – anyone remember Vodafone Live? – and were adamant that of course consumers were going to come to them to buy stuff. Small ringtone and wallpaper vendors quaked in their boots; the adult and gambling worlds looked on in wonder. We all held our breaths. Then Apple turned up with the iPhone, iTunes was launched into a new orbit and… well, today operators account for 6% of content sales worldwide. But, while mobile operators globally sell a tiny fraction of the world’s mobile content directly from their own portals and stores, they are already raking in some $2billion a year from the wider content world through operator billing – a revenue stream that is set to grow to $13billion by 2017, according to Juniper Research. It’s a big rev stream. The key thing, as we all know, is that operator billing means that you can sell to anyone with any mobile phone. It reaches the unbanked and underbanked, as well as offering a pretty frictionless means of getting people engaged and purchasing within just a few clicks – something not wasted on the gambling industry (see page 20). It also has a magnificent conversion rate – five to six times compared to credit and debit card, or some 70% on Payforit4 (see page 16) – so it is hardly surprising that it looks to have stellar growth ahead. And this is really what operators should be concentrating on. They have the delivery mechanism and they have a built in payment channel – this is all they need. Forget trying to get into being the power behind mobile retail, mobile marketing and mobile payments: there are already countless other organisations that do this a lot better and will beat MNOs out of the market. The banks and card companies are working with operators to get wallets and other payment services running, but they know what they are doing. Well, on recent history you could argue that clearly bankers don’t know what they are doing, but they know more about purchases, especially in stores, than operators do. They also have the brands that people ‘trust’ to handle payments. In the marketing world, Facebook and Google are already miles ahead of the operators. OK, by teaming up and sharing data – under the banner of Weve – they have a lot of names and numbers, but Google and Facebook really understand where the people they are connected to are ‘at’. They understand the minutae of their lives. Operators know who they are and possible where they are. That’s it. But why looked to grapple with these areas when they are sitting on a payment tool that can be used to monetise at least $13billion out of people? With a little focus on how to use what they have, the operators can avoid another failure and the drift towards becoming their own nemesis: dumb pipes.

Make sure you renew your annual subscription to continue receiving Telemedia Magazine AND now you will get 10 issues of Telemedia-month into the bargain! www.telemedia-news.com/signup.html

telemedia issue 32

the small print

Sticking to the knitting

Directeur de la rédaction Paul Skeldon paul@telemediamagazine.com Art Director Victoria Wren victoria@whangdoodleland.com Contributors & Consultants Matthew Leach, Aideen Shortt, Sheldon Johns, Andrew Darling, Peggy Ann Salz, Ritesh Gupta, Alexandra Franklin, Paul Dunone, Bruce Pharoah, Christabel Farrah, John Strand, Melvin de Vere, Victoria Hawes, Peter Welburn Sales & Marketing info@telemediamagazine.com Production Director Annika Micheli annika@telemediamagazine.com Publisher Jarvis Todd jarvis@telemediamagazine.com To subscribe www.telemediamagazine.com

What we’ve been listening to Song from under the floorboards, Magazine Twisted and Sick, Viki Vortex and the Cumshots What we’ve been amused by This is Kevin Eldon What we’ve been reading about Weve What we’ve been cooking Lentil Croquets

Telemedia Magazine is published every six months and circulated in print to 8,000+ qualified readers and downloaded in digital format to 17,000+ requested readers. Business Address: Ground Floor, Virginia Cottage, Nash Lane, Scaynes Hill, West Sussex, RH17 7NJ, UK. Web: www.telemediamagazine.com Circulation enquiries to: Geraldine O’Sullivan geraldine@wtevent.co.uk

Overseas subscriptions and non qualified readers can obtain Telemedia Magazine with an annual subscription rate of £15 / 20. Refunds on cancelled subscriptions will be provided at the publisher’s discretion, unless specifically guaranteed within the term of subscription.

© World Telemedia Ltd. All rights reserved. No part of Telemedia Magazine may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying and recording on any information storage or retrieval system without the written consent of the publisher. The contents of Telemedia Magazine are subject to reproduction in information storage and retrieval systems. Repro and Print by Trio Offset

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Opinion Analysis

ANALYSIS

PAYMENTS

The on-bill opportunity Direct operator billing offers operators a huge revenue stream for content and Google Play may actually help them trouser more cash. Paul Skeldon reports.

evenues 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 oneclick 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 wakeup 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.” The results were consistent with Flexion’s

findings from other stores where operator billing is used, which suggests that it is not Android the platform itself which is underperforming, but rather the monetization mechanisms mandated by Google Play. Flexion’s research has shown that developers could make substantially more revenues if Google Play offered better coverage of operator billing. Nokia, Microsoft, RIM, Samsung and even Facebook are all seeing the benefit of operator billing but Google does not seem to be in a rush to implement it. “It would be fairly easy for Google to acquire a global operator billing business, but their approach seems to be that if operators want the business they should integrate with Google. That will take a while and by then developers may have given up on premium altogether, and advertising may be the dominating model. As the biggest online advertising network, the question is whether that would be such a bad thing for Google,” Lauritzson added. There are over 800,000 applications in Google Play, which makes it the biggest app store in terms of number of apps. Google has made it mandatory for developers to use Google Play billing but there are no restrictions on which advertising networks can be used. This means that developers rely on either Google Play billing or advertising to generate revenues. In such a crowded store environment, however, it is clear that if developers don’t get featured or supported by advertising, their apps will not hit the charts. In addition price competition has also contributed to generally low pricing. For most developers, this means that it is almost impossible to make money from their apps in Google Play.

Moving with the times The adult chat business is fiercely competitive and its customers ever more discerning. So to pick up the minutes that are there, you need a high tech approach.

“When a caller wants to chat to a MILF he doesn’t want to be presented with a menu that only contains the profiles of cute babes. Or if he calls looking for a watersports enthusiast or a posh wife he doesn’t want to hear a carousel full of aspiring Mums offering to pamper adult babies,” explains Frank Brzeski, from Luv2Chat, part of Worldwide Digital Media. “If you fail to meet the caller’s expectations in the important first few seconds the call will be lost and the advertiser’s money will be wasted. To paraphrase Tony Blair, our priorities are retention, retention and retention.” To secure this sort of rention, Luv2Chat is employing the latest in behaviour analytics and cutting edge marketing techniques to make sure that the right people are spend-

he adult IVR chat business is a tough one. There are, sadly, fewer callers each year and they are getting to harder to reach out to. And those that do call in are rather promiscuous, perhaps unsurprisingly. But there are minutes out there to be had, you just have to work out how to get them. All while keeping in mind the advertiser’s cost of acquisition. And this is what is driving Luv2Chat, which is looking to use all the technology and techniques available to make it the premier supplier of IVR chat to media companies in these tough recessionary times. So what is the company doing that is so different? Expectations among callers is now very high and in order to be a successful live service provider these days you have to understand what the callers’ needs are.

ing money on listening and enjoying chat services. “For example, our ‘chat stars’ are encouraged to send callers a FREE ‘watermarked’ MMS picture during a call as a reminder of who he has been talking to,” explains Brzeski. “It’s a marketing adjunct to the service designed to facilitate retention and it’s highly effective.” He continues: “Luv2Chat is attracting the best girls in the business and fast becoming the operators’ live service provider of choice as a result of our effective training, mentoring, support, incentive programmes, professionalism and the fact that we’re actually just really nice people to work with. So, Luv2Chat is now the preferred choice of leading media organisations in the UK and we are working to develop exciting derivatives of existing programmes and services to generate profitable new PRS revenue streams.”

Opinion Analysis

CHAT & DATING

telemedia issue 32

ANALYSIS

telemedia issue 32

Growth in all these markets is projected to accelerate this year, fuelled by the slew of investments in 2012 by the likes of IGT buying social gaming company DoubleDown which has contributed to an explosion of social games on Facebook. And it’s not just the big players who are shaking things up: When Facebook announced the first real-money gambling game on the platform – Bingo Friendzy – it was made available exclusively in the UK first and served to remind traditional industry operators that smaller, agile companies can also enter the industry and claim market share. One of the most important factors behind the success of Facebook gambling applications and mobile social gaming applications is the extreme professionalism of online gambling services. Now, most of the online gambling sites have social media apps integrated in them. These social media apps accomplish two objectives; they keep the current users happy and they help in attracting new users from the social media sites. They use Facebook fan pages and twitter accounts to expand their reach Innovative gaming and sports betting operators are harnessing the tremendous opportunity to combine three technologies where users spend most of their

time; social media, online gambling and mobile phones. Mobile social gaming applications have successfully achieved this objective. These applications are so efficient; users can use them even when they are at work. One of the experiments in this area is something called “SideBets,” an app that can be purchased and downloaded for either the Android or iPhone, which basically allows participants to place peer-to-peer bets which each other on the honour system, a mechanism that circumvents regulations by eliminating paying and collecting function. Fans contact each other, use established sports book odds as a medium, and settle the wagers between themselves, although they must buy SBD’s (Side Bet Dollars) in order to be integrated into the system. Juniper Research projects that annual wagers that will be placed via smart phones and tablet devices will exceed $100 billion by the year 2017, and it will be social gambling that is the main driver. The reason is relatively simple. It’s because the social gaming companies, like Zynga, will be gravitating more toward real money gambling as a way to generate revenues, and eventually it will become the standard for the industry. Certainly there will be more of this to come. People connect so much on their phones right now that doing so within the context of a gambling exercise would seem to be a given. And whatever comes next would seem to only be limited by the power of the imagination, as the social gaming market reaches new boundaries on mobile devices.

ying at the intersection of three powerful markets – social gaming, online gambling/ sports betting and mobile gambling/sports betting – Social Mobile Gaming marries the power of social games with the reach, scale and ability of mobile to monetise. With Social Mobile (SoMo), gambling and sports betting will move to the next level. While investors were jumping from the social gaming ship in droves during 2012, there was one area that did not get the short end of the stick: namely, social gambling, which continues to attract investor attention. Clearly, social gambling on mobile devices is rising up the strategic agenda and is expected to make headlines more and more this year and next. There can be little doubt that gambling and betting are social activities. Whether the customer is in a land-based casino, a bookies or playing poker on their laptop, they are engaged and involved with other people – real or virtual. Social games leverage a player’s social graph, in the form of a social network, to motivate and drive game play. Social casino games can couple the ‘stickiness’ of social games with the classic popularity of casino games such as Blackjack, slots, roulette and poker.

gaming

Opinion Analysis

Game on for social mobile gaming There is a huge opportunity for gaming operators and mobile developers to capture the hearts and minds of eager players with the emerging category of Social Mobile Gaming. Andrew Darling takes a look at why it is so important to telemedia and the gaming industry

Opinion Analysis

ANALYSIS

GAMING

A softer side of gaming Mobile gambling and sport are both growth areas for the telemedia industry and with our annual events – produced in conjunction with iGaming Business and Sporting Business – set to take place at the Brewery in London on 24 April, Paul Skeldon takes a look at how both are becoming mainstream

he timing of the mGaming and mSports Summits in London on 24 April could not be more prescient. Gambling, especially sports betting and ‘soft’ services such as bingo and lotteries, are rapidly becoming mainstream services – and it’s all thanks to mobile and tablets. The growth in mobile bingo is being driven by the services also featuring chatrooms, and much of the experience of going to ‘real bingo’ is being replicated online – something that has driven these services to become very popular with female smartphone and tablet users. Sports betting is also seeing continued growth. Sports bets have really been the proving ground for mGaming over the past five years and this is set to continue. Again, the addition of social media elements is also driving its use. Only this week, pro footballer – with York City, it still counts – Dave McGurk has launched a socially driven

mobile peer-to-peer betting service called Bets of Mates (who said footballers weren’t clever? Though would you have got that from Rio Ferdinand?) which is being pitched as a social ‘bet-work’. This enabled friends to bet with each other in a fantasy football style league on footy games. While it may not give the big gambling operators sleepless nights, it does show that gambling is becoming ever more acceptable and that mobile social is proving to be a key platform. While these soft games have started to make mobile gambling ever more widespread, proper gambling has also seen some key developments. No longer viewed as the poor relation of online, mobile is now becoming the proving ground for many new start ups and services. Real money casino gaming is growing in popularity, and it can be no coincidence that former Betfair kingpin Gerard Cunningham, who founded virtual currency

casino Koolbit has launched the first real money poker offering – on mobile. Hot on the heels of this, Glu Mobile in the US has also rolled out real money gambling on mobile. I smell a trend. Glu partnered with probability late last year and this is its first offering. It plans up to 15 more real money mobile games through 2013. So why all this attention to real money casino games on mobile? Games – and gambling games in particular – are becoming big money spinners as this is where the consumers are. The UK market allows real money gambling on mobile, so why not? It is what consumers want – from bingo through to ‘proper’ games. And this is what mGaming Summit seeks to capitalise on. Mobile gambling is established – now is the time to make it grow. And these mobile first offerings are an encouraging sign that mobile’s time has come.

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telemedia issue 32

ANALYSIS

Opinion Analysis

DATA MANAGEMENT

Brave new monetisation world? A global MEF survey reveals that nearly two thirds of consumers are wary of sharing private data with apps. But with data rapidly becoming the monetisation tool for the new app economy, this needs to change. Paul Skeldon investigates

ata is becoming the new currency of apps. Without the valuable data that can then be sold on, the millions of people who play Angry Birds for 69p rather than £6.99 would be a bit nonplussed. Data is now a currency. But a recent global study of 9500 people carried out by MEF and OnDevice Research has found that only a third of consumers are comfortable sharing data through apps – meaning that a massive two thirds are not. And this is hampering the development of m-commerce and stifling the nascent data trade – while the third who are sharing data are likely to get a massive shock when they find out what it is being used for. All in all, it’s a mess. “There are two factors at work here,” says Simon Bates, Senior Advisor, policy and initiatives at MEF, “security around how the data is stored and used and privacy issues around what data is being shared and with whom.” Right now, apps that sit on smartphones, theoretically at least, can access and share everything pretty much that is in that phone. Location is the obvious one – and the one that you most often get asked if it’s ok to share – but apps can also

share your contacts, your photos, your browsing history, your social media trail and much more. And this is starting to worry people. “70% of people want to know what is being shared by apps and 46% think its vitally important to know what is being shared by their apps,” says Bates, but typically that transparency isn’t there he warns. Apps stores such as Google and Apple have strict privacy policies and many free apps – 69% according to The Future Privacy Forum in the US – have their own strict privacy policies in place. However, with 70% of consumers wary about privacy, the message is not getting through. And this is where the MEF comes in. According to Bates, the free app market is like the next stage of development in currency: we used to barter, then we had coins, now we use data. This is a crucial facet of how the free and low-cost app market works – consumers get apps free in return for the app’s developer selling the consumers data. But making sure that this is ethical – and above all transparent – is becoming crucial. While apps stores and app developers and brands all seem to be taking privacy and data seriously, they

typically just sell on the data they gather to ad networks – and no one can vouch for what they do with it. Many of the main ad networks such as AdMobi all have their own strict privacy rules, but not all do. And this is where it gets messy. In order for the mobile advertising market to work – and for apps to be free or low cost – these issues of privacy have to be tackled and made transparent. “They also have to be communicated to the consumer,” says Bates. “It is no good ticking the ‘privacy’ box by having a 40 page legal document on a website from a link in the app, it has to be clear and simple and presented to the consumer at the right point in the process. Otherwise, the consumer mistrust will grow and the potential that this data market offers will be hurt.” The MEF is already working with leading brands, ad networks and developers to create tools to make this easier to do and to help everyone make the issue of data transparent. And it needs to happen fast. The global research finds that developing markets, counter to what you might have assumed, are actually more concerned about these privacy issues than developed US and European markets – so all future expansion of m-commerce hinges on getting this right.

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ANALYSIS

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telemedia issue 32

INDUSTRY AIME Payforit 4 sets new standards in micropayments AIME launched its ‘Industry Recognised’ Payforit service to provide a standard for paying by mobile. A UK based mobile micropayment scheme allows consumers to buy confidently when they make one-off payments, charitable donations or set up subscription services via their mobile device. A training course will ensure industry can be bought up to speed with understanding of the Payforit 4 and 4.1. This new service introduces 2 new features: HTML5 based payment iFrame that enables secure transactions as consumer no longer leave a merchant’s website, as it happens within a payment window within the merchant site. The second, Payforit Single Click service will enable the consumer to opt-in for a simplified checkout for second and subsequent purchases from the merchant page. Payforit 4 will best maximise conversion rates using new features such as ‘single click billing.’ Card based online payments are starting to adopt Payforit and the market is expected to grow to £100million + in the next three years. Currently trials are commencing to finalise the implementation of in-app purchase functionality to Payforit 4.1. The course will run on the 16th July to outline the newer 4.1 services.

Voice Short Codes are dominant interactive channel November 2012 saw AIME successfully launch Voice Short Codes alongside the Mobile Operators, BT, and Broadcasters following on-screen voting formats that were included in BBC programmes “The Voice,” and “Strictly Come Dancing.” VSCs will allow viewers to vote from mobiles and landlines at the same cost that is promoted on screen. Previously, consumers had to pay a premium for calling a 09 number from a mobile. This change will result in the saving of millions of pounds to consumers. Next quarter - PRS Alternative Micropayment solutions AIME has launched an additional PRS course, following on from its first training ‘PRS Foundation Course.’ This new course will outline and focus on alternative Micropayments and will guide participants through the main micro-payment solutions and compare them to Premium Rate solutions. Payment solutions that will be covered include: card payments, App store payments, iTunes, Facebook, Paypal mobile and Google Money. The event will showcase on the 14th May 2013.

DMA

INMA

One-to-one to a million follow in the footsteps of Team Obama Harper Reed, the technology and data guru behind Obama’s campaign succeeded in producing personalised communications with customers. Reed assembled a team of developers from Google, Faceook, Amazon and Twitter to produce a data platform to give the president the edge over his rival, Mitt Romney. In total the campaign raised $1billion in donations, including $690million online. Reed’s genius will make its fist live appearance in Britain at the Digital Marketing Association Technology Summit. He will showcase how his team harnessed the power of data and innovation to create a historical campaign. Reed and speakers from 4oD, Cranfield University and the DMA will explore how brands connected one-to-one with millions of people.

Partnership to promote advertising INMA has joined forces with RAM to promote the effectiveness of advertising. This “Partner in Business” agreement will support 2013-2014 INMA activities in North America, Europe, Latin America, Asia-Pacific, Africa and the Middle East. With the help of Internet-based research, RAM provides media companies with knowledge of how advertisers’ communications is delivered and perceived. Earl J. Wilkinson, executive director and CEO of INMA said, “This partnership will emphasise the measurement of advertising and content effectiveness, relevance and engagement. We see both RAM and INMA as organisation focused on supporting the media industry.”

Data protection toolkit for businesses to tackle EU data changes The DMA called on senior executives in brands, agencies and suppliers to add their voices to the growing campaign against EU data reforms. Experts have warned that these new reforms could stifle industry growth and innovation. Chris Combemale, the DMA’s executive director spoke at the DMA’s Data Protection 2013 conference and told the audience that the industry has reached a crucial window of opportunity for businesses leaders. To support efforts, DMA has launched its online data protection toolkit. This is the marketing industry’s first comprehensive guide to how the new reforms could impact all marketing sectors. It explains to readers how to lobby MEP’s. In January 2013, the EU announced its latest proposed changes regarding the definition of personal data, limitations on customer profiling and consent to direct marketing. Combemale said: “Recent DMA research showed that the majority of the industry’s senior executives are either unaware or lack understanding of one of the biggest long term threats to their business.” Next quarter: Marketing and Print Innovations April 18th will showcase the fourth joint DMA & IPA Innovations conference, and will explore the latest marketing and print innovations. The event will provide the tools to add spark to your business development. Presentations will feature innovations such as augmented reality and Videopak. Email: luke.cardy@dma.org.uk

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Next quarter: Annual World Congress The INMA Annual World Congress on April 28th-30th will focus on the development of alternative revenue streams that could preserve today’s scale of journalism at news media companies. Earl J. Wilkinson, executive director and CEO of INMA explained, “The news industry has an engaging story to tell about transformation, reinvention and transition that runs counter to the doom and gloom arguments repeated by those who just scratch the surface of our industry.”

INDUSTRY MEF Third of consumers want to share their data with an app MEF first Global Privacy study found a third of consumers are comfortable sharing personal data with an app. The report outlined global consumer perception of apps that use personal information. The perception of security around data is good, with 18% stating they are not confident their personal information is protected. Andrew Bud, MEF Global Chair explained: “Two main themes emerge from this research: consumers demand transparency when apps are sharing their data, and importantly the app community needs to do a better job of explaining to consumers why it’s in their interests to do so.” The report outlines four key factors of privacy: transparency, comfort, security and control. Consumers understand the impact of mobile apps on their privacy, and they want providers to be transparent when it comes to the use of their personal information, with 70% of consumers thinking it’s important to know what information is being gathered by an app. While 35% of consumers are not comfortable with sharing personal information, consumers are increasingly choosing to ignore apps until they feel that they can trust them not to share their personal information. Newly elected MEF EMEA and Asia Boards showcase mobile diversity MEF announced the results of its hotly contested 2013 EMEA and Asia Board elections. 23 candidates representing MEF’s diverse mobile ecosystem, including banks and device manufac-

turers participated. The newly elected Boards showcase MEF’s expansion in the mobile ecosystem. New companies that joined the new EMEA Board included: Barclays Bank, Rabobank and Vodacom. Elections were carried out at MEF’s AGM at Mobile World Congress ahead of its 11th year. Andrew Bud, MEF Global Chair said: “The newly elected EMEA and Asia boards contain outstanding experience and industry breadth. They will drive our mission by delivering regionally specific activities to create monetisation opportunities and build consumer trust.” Next quarter: CTIA Wireless 2013 CTIA Wireless 2013 will illuminate the future of the mobile movement by showcasing leaders, ideas and experiences. MEF will take part in this event held in May 2013. MEF’s recent Global Consumer Survey found that the US has 91% penetration of mobile content and commerce, and the CTIA Wireless panel will focus on these current m-commerce and mobile payment models, security and threats that need to be addressed in the m-commerce space and how to stay current on regulatory processes that could impact your m-commerce revenue stream. Next quarter: MEF Connects India Monday 22nd April 2013 will see the inaugural MEF Connects India event, hosted by MEF Asia. With India being one of the world’s largest mobile markets, this first-ever MEF Connects India will showcase opportunities to network with India based members as well as regional MEF members. The event will explore challenges and opportunities in this key growth market.

PhonePay Plus (PPP) PhonepayPlus levy and Registration Scheme announcement 2013 Following consultation with industry and approval from Ofcom, PhonepayPlus has confirmed its budget for 2013/14. We expect the total cost of premium rate services (PRS) regulation in 2013/14, covering PhonepayPlus’ core activity and the Registration Scheme, to be £4,066,632 excluding VAT (£4,301,849 including estimated non recoverable VAT). The proposed PhonepayPlus budget for levy-funded activity in 2013/14 is £3,704,749 excluding VAT (£3,937,503 including estimated non recoverable VAT). In cash terms, the budget is 0.5% lower than the current year and 4.2% lower in real terms. Following significant budget reductions in recent years the budget for 2013/14 will have reduced by 24.5% in real terms over the last three years. The graph below shows the core levy budget in actual and RPI real terms over the last six years. During 2012/13, PhonepayPlus VAT-able services were subject to a review by HMRC. We were in constant contact with the ILP throughout this process to update industry of the result and the likely effects. This review has now been completed and has resulted in a change to PhonepayPlus’ VAT registration status. From the 1 June 2012 the levy and fine charges fell outside the scope of UK VAT, meaning that we can no longer charge VAT on the levy and we are unable to recover the associated input VAT. This change means that we now have to incur the added costs of VAT, an estimated £233,000 per year. In the short term we have been able to cover the VAT for 2012/13 but for 2013/14 we have had to incorporate these added VAT costs into our core budget and therefore into the levy. Review of prior permission conditions for consumer credit services operating on premium rate In January, PhonepayPlus issued a consultation document that reviews the prior permission regime it has in place for consumer credit services using PRS and makes proposals for changes to the conditions attached to it. In proposing these new conditions for PRS-based consumer credit services, PhonepayPlus intends to bring its prior permission regime in line with updated wider industry guidance and best practice as well as to protect consumers from identified risks which are specific to the PRS-based consumer credit market. PhonepayPlus is seeking views from industry, consumer groups and other parties with an interest in the proposals by the deadline of 2 April 2013.

MMA Unveiling of “Mobile Application Advertising Measurement Guidelines” MMA, with MRC and IAB issued the “Mobile Application Advertising Measurement Guidelines,” for the public. These guidelines will address in-app advertising, critical in the mobile media landscape. The guidelines are primarily for organisations that develop mobile applications and use the platform as a marketing vehicle to connect with consumers. Michael Becker, Managing Director of MMA North America commented, “We can arm the industry with practices on how to properly measure in-app advertisements via mobile to limit discrepancies across mobile campaigns and ensure that impression counts are dependable.” Topics under the guidelines include: disclosure guidance, auditing recommendations, application coverage and basis for projection and application testing and release process.

The telemedia industry crosses so many business borders, its interests are tied up with a range of trade bodies and associations. Here we take a look who is doing what

telemedia issue 32

telecoms

Connection

lost? With 4G starting to come to market, are MNOs back in the game or will OTT services like Skype along with growing use of social media and wifi keep eroding those profits? Matthew Leach takes a look at how the way consumers connect is changing and what that means for operators

t has been quite a year for network operators as the much-anticipated bidding process for the 4G spectrum came to a head. The winners – EE, O2, Vodafone, Three and BT – paid £2.34 billion, well below the £3.5 billion expected by the Treasury. But despite this investment, network operators must find solutions to the growing challenge from OTT services, such as Skype and other VoIP services – not to mention the threat from wifi and wimax services. Both the stakes and expectations are high for 4G with carriers under pressure to reverse declining revenues due to a fall in voice and SMS traffic. The networks’ fall in revenues is not solely down to these OTT services. The harsh reality is that consumers are making fewer phone calls. The networks are also up against companies such as FooTalk, who launched a low-cost smartphone-calling app billed as the ‘first global Facebook calling service’. The app enables users to sync with their Facebook profile and allows them to call friends and contacts for free, anywhere in the world. Graeme Hutchinson, co-founder of FooTalk, explains: “With Facebook connecting over 680 million mobile users, we want to offer people the chance to take this connection over and above simply sharing status updates and images. We believe this is the next step in how we will use social media to communicate.” FooTalk users are able to make free calls to other FooTalk users anywhere in the world, via Wi-Fi or mobile data. They can also make big savings on calls to mobiles and landlines, with a low cost call rates for calling internationally and domestically. By way of a response to the OTT threat, in March O2 launched TU Go, an app that lets users make and receive calls and texts via a tablet, computer or smartphone. It is the latest attempt by the telecoms industry to tackle competition from Skype and other third-party VoIP services, which do not normally charge for app-to-app call but need the user to buy credit if they want to call or send a text to a standard mobile number or landline. TU Go, instead of credits,

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deducts charges from the user’s existing call minutes allowance and works over Wi-Fi or 3G and 4G data connections. “TU Go enables O2 customers to make and receive calls and text messages, using their existing mobile tariff, on a range of devices rather than being tied to one handset,” says Derek McManus, Chief Operating Officer at O2. “Customers using TU Go will be able to take their existing number wherever they like, even away from their mobile. It lets you take a call on a tablet, pick up text messages on a PC and have conversations in places with Wi-Fi coverage but no mobile signal.” The threat of VoIP is not a new one. Last year, Ovum forecast OTT VoIP will cost telecom operators $479bn in lost revenue in the next eight years. But the scale of this threat was highlighted in February when Xi Guohua, chairman of China Mobile, the world’s largest telecom carrier, insisted the he was more concerned with competition from Microsoft’s Skype and Tencent’s Wechat services than rival mobile networks in China like China Telecom and China Unicom. The way in which Vodafone have taken the wind out of the VoIP’s sails is to offer ‘unlimited calls and texts’. A Vodafone spokesman tells us that: “We always ensure that customers have a choice of services, so all our Vodafone Red plans allow customers to use VoIP services (as well as tethering). Perhaps the most obvious way in which we are mitigating the potential impact of VoIP services on call revenues is through our Vodafone Red plans which offer unlimited calls and texts.”

Social outcasts The network operators’ falling revenues are also down to their inability to monetise social media. Networks are struggling to find a way of becoming more than just pipeline. Services and content are increasingly been delivered on the mobile web by companies like Google and Facebook, but the carriers are not sharing the revenue being generated by that content. Despite this, EE insists it is happy to act as an enabler for content companies. “All mobile operators are trying to

Telecoms monetise data services,” says Andy Sutton, principal network architect at EE. “Social networks need to differentiate themselves, and this could happen as the market matures, with more collaboration. With regards to apps and content services, our role at this stage is to be the best enabler of those of our Facebook/Twitter users to get a better service on EE, and we are happy to do that. We are not about competing with these companies. There will be a lot of exciting new services, real-time services, which will be improved by, or enhanced, on EE, increasing collaboration.” Vodafone, is equally upbeat about social media. Vodafone’s spokesman said: “The social media phenomenon is a very good thing for mobile phone companies. It is helping to drive the uptake of smartphones and mobile data. By the end of last year, 53.3% of all our 19.54 million customers had a smartphone – up from 41.5% a year ago.”

system, there is more demand and it is able to deliver at the right price point. WiMax is for more niche applications, not many of these in Western Europe. On the consumer side of things, iPhone and other high-end smartphones are not available on WiMax, but they are on LTE. If you want to deliver a compelling range of devices, LTE is the way to go.” Operators are keen to recoup their massive investment in the 4G revolution and third-party content providers and aggregators will be waiting with bated breath to see what opportunities these enhanced capabilities will bring. O2’s McManus believes the changes will be far-reaching. “2013 is the year that 4G will become a nationwide reality in the UK,” he says. “Our industry is making a huge investment in this new technology, which has the potential to transform many aspects of our everyday lives, from how we do business, to how we go shopping, to how we relax.” McManus adds: “Enhanced bandwidth and throughput Where for art thou wifi? capabilities will not only ensure that 4G is fast, but will Faced with soaring mobile data demand, many networks and usher in a new era of bandwidth-intensive mobile apps. The service providers are coming around to the idea of making apps will be able to become more ‘heavyweight’, akin to the more use of wifi. Most carriers are looking at wifi to offload software that you find on your computer, which opens up a data from their 3G and 4G networks, allowing them to use wealth of opportunity for developers.” the unlicensed spectrum that wifi uses to reduce congestion EE’s Sutton believes LTE is a “game-changer”. He says: on licensed spectrum in areas of dense usage. “Content providers will not be so constrained by what they But it’s not just about offloading data. Carriers want to use can do on the network and will be able to develop apps that wifi as more than a data connection. New gateway technolo- can take us in a new direction. The innovations will come gies and industry specifications make it possible to integrate from third parties, but the enhanced uplink of 4G/LTE has a wifi with the carrier’s core services, making value added big role to play. services possible. Sutton said: “EE 4G/LTE is an enabler for a great OTT Sutton admits EE does use wifi for data offload, but experience. LTE is so different, it has low latency download, believes this is just the start. increased capacity, and an enhanced uplink which will lead “We do have a wifi estate from our T-Mobile hot spots,” to a whole new era of services.” he says. “But, moving forward, we have been expanding wifi’s role. At present, that is primarily data offload but we 4G 4 a better life have come to realise that this is not the optimal way of using 4G, we are told, will also have more practical uses than wifi. Wifi is part of the solution but it needs to be integrated creating the latest compelling app that will change people’s with the core networks. By integrating wifi as part of an opti- everyday lives for the better. mal network solution, it will enhance the user experience.” “Beyond mobile phones, the effects of 4G on our everyday Despite these encouraging sounds from Sutton, wifi’s lives will be felt across a huge variety of industries and secinherent limitations as a short-range wireless technology tors,” says O2’s McManus. “This could be a water company mean the cost of delivering high capacity, reliable wifi cover- monitoring its network for leaks with sensors and automatiage is not cheap. cally notifying the nearest repair team vehicle in a matter of Big talk of WiMax being a viable alternative to LTE for 4G seconds. For emergency services, real-time video streaming services seems to have quietened. When comparing the two from incident locations will allow for better remote managetechnologies, under the same circumstances, LTE promises ment and monitoring from control rooms. In health care, the better download/upload speeds for the user, resulting in greater coverage and data capacity delivered by 4G will kicklower cost per bit to the operator. start growth in remote monitoring and assessments, or the Muralidhran Nadarajah, Head, Xchanging Malaysia ability for on-call health professionals to respond to alerts explains: “The combination of LTE’s increased spectral effiand access records and files wherever they are.” ciency and flexibility, added capacity and simpler network Rhian Kelly, CBI Director for Business Environment has architecture should offer a very cost effective value proposi- high hopes 4G will give the economy the boost it so despertion. WiMax is a good technology but is still paralysed by ately needs. “Digital networks are as vital today to growing the unavailability of devices from major vendors that can the economy as road and rail links,” she says. “Faster conwork on multiple networks. LTE on the other hand has seen nections will drive private investment, underpin jobs, and a huge market adoption.” spark innovation, particularly with small firms. Globalisation This lack of devices has been the main barrier for the means firms are increasingly ruthless in choosing where to mass adoption of WiMax and EE’s Sutton believes LTE is the base their operations, so the roll out of 4G services will be right choice. He adds: “EE has no plans to utilise WiMax as key to attracting inward investment as well as winning busiwe favour the 3GPP route. LTE is a more established econess overseas.” telemedia issue 32

TELECOMS

Brave new world

espite these grim economic times, Ovum recently announced that total global telecom operator revenue has exceeded $2 trillion in 2012, with 60% of that figure generated by mobile operators. Over the next five years, Ovum believes mobile broadband offers operators the best opportunity to grow revenue, and is expected to grow 19.2% annually, generating $122.9 billion in incremental revenue between 2013 and 2016. Social media is also being billed as the next big revenue generator, with South America seen as a hotspot. The innate openness of South Americans makes social media the perfect vehicle for large numbers of people to chat about the latest soap-opera episode or football match. Brazil boasts 65 million Facebook users, and according to socialanalytics company Socialbakers is second only to the United States in using YouTube. Twitter recently told the Wall Street Journal that Brazil had become one of the top-five active users. However, companies are still struggling with the question of how to monetise this phenomenal growth. Those companies that want to see a fast buck are missing the point. Social media, mainly driven by mobile, is a means by which companies can steer customers to their brand or product. That, in turn, brings increasing opportunities to build CRM, which is invaluable in understanding a customer base and, in the long term, increases the company’s value. Talk of social media being used as global payment mechanism, using such things as Facebook credits, has been overstated in the past, but will play its part in driving global business. Vincent Peek, CEO of TelservBV, which conducts business in 140 countries and provides premium rate numbers, freephone numbers, shared cost and geographical numbers, says: “Social media payments is interesting for add-ons (as an extra payment method next to Premium Rate number, credit card, etc.) though I think that payments like this are not useable for everything. A combination of payment methods is preferable but, in the Netherlands, credit card payments is not taking off, because it is not anonymous

telemedia issue 32

enough, and people do not want to leave credit card details on the internet because of hackers, etc.” Peek believes ease of payment is a key enabler in successfully working across a number of territories but trust is crucial and to make that initial first step, a oneoff, no-strings-attached payment method is preferable. He said: “If you attract a new customer, give them the opportunity to make a single payment. This gives them time to check out the content on the website and get a feel for the product. If the company gains the customer’s trust they will use credit card payments, but in the first instance they won’t because the trust is not there yet. “Premium rate numbers provide a good method for one-off payments as it is anonymous with no strings attached. It is preferable to PR SMS as with text there is the possibility of reverse billing or subscriptions services. This is exactly what they do not want. They want to make a payment no strings attached. For example, if you play party poker, you play five or six times, and have a good experience, you will use a debit or credit card as it is an easier way of paying and, for the Merchant, a cheaper way – but you need to gain that trust.” High data charges, especially when conducting business abroad, are seen as increasingly prohibitive. One company that is railing against these networks charges is Globalgig. The company boasts that it offers mobile broadband for mobile, laptops and tablets at £10 for a gigabyte of data, (95 per cent less than many major wireless providers charge) across a number of international territories. The service has been live in UK, US and Australia since December last year and has now expanded to the Republic of Ireland, Hong Kong, Denmark and Sweden. It alleviates expensive international roaming charges and Nigel Bramwell, CEO of Voiamo, the company behind Globalgig, has high hopes. He says: “Business and consumers are becoming acutely aware of the rip-off data bills that they face upon their return from travelling. The major networks are charging hundreds, even thousands of pounds for data, which is unjustifiable. Our pricing and tariffs aim to put an end to this.” Shawn Brown, director for Mobile Data Association, believes there are real opportunities still to be had but he is amazed that big corporations are still failing to provide a proper mobile offering. “Corporate companies are still trying to shoehorn skill sets from online to mobile and it just doesn’t work,” he explains. “They are not prepared to give a proper mobile offering across platforms. One thing they do is build apps for IOS, but how are users going to find that app in the first place? You find apps typically from a browsing

TELECOMS session, but not everyone has smartphones, so a mobile internet offering is needed. Corporate players forget it is about the discovery process, the commuter surfing to and from work. If you do not get a good experience you will lose that potential customer.” In this increasingly borderless world, opportunities in new territories are there for the taking, but regulation is a key issue. Too much regulation can strangle business, but too little can allow unscrupulous players to come in hard and fast, make their money and leave. Brown adds: “Fraud is huge and it is in the deregulated markets that you find the first movers. They make a lot of money by going to market very hard and very aggressively. An example of this was South Africa, which was de-regulated and seen as a cash cow for a while. There were a lot of good companies in there but some bad guys as well. Now it has some of the most stringent regulations in the world (along with Australia) – to the extent that some bad guys even went to jail. It went from the ‘go-to’ place to the ‘not-go-to’ place.” Many in the UK market believe regulator PhonepayPlus is struggling to strike a balance over regulation. Brown says: “The UK market is quite stagnant; the reason is regulation – the industry is too heavily regulated. There is the constant fear that regulators will come down on you. To be fair, the regulators are looking at ways to work with people in the telemedia industry. PhonepayPlus is trying to encourage self-reporting.” But the reason that regulation is such a necessary evil is because of the twin threat that plagues the international and domestic telecoms industry: fraud and arbitrage. Brown believes this issue is not something that is going away. “Fraud could get much worse over the next five years,” he says. “At the moment, big territories like China and Russia appear to be the centre for rogue applications. Often apps are downloaded, which would otherwise be charged in most places, for free. These apps appear to be the same as the genuine ones but they have one purpose – to commit a crime. It’s not just the ability to take money from the handset, but full on identity theft. You can get people’s contact records, email address, everything...” Arbitrage – which is sometimes used by carriers to increase profits – is perfectly legal in itself, but it can be a grey area. Brown explains: “Arbitrage and fraud will always exist, but it can be very difficult to identify. There are some very clever businesses out there that work on arbitrage. These people are capitalising on an opportunity created by the networks themselves. Identifying international arbitrage is like finding a needle in a haystack. Arbitrage is a grey area. But AIT (artificial inflated traffic) which is computer generated via a machine, is where arbitrage turns to fraud. But genuine traffic, with genuine real people, that is OK.” Telserv’s CEO Peek insists that the threat of fraud and arbitrage is the reason why the bulk of his business is done using local numbers. He said: “We are not really affected by fraud and arbitrage in our business as that is

done mainly over international premium rate numbers. We use local numbers – we don’t want fraud or arbitrage traffic – which is why we are focusing on domestic traffic to prevent this problem arising. If you have a lot of arbitrage traffic, the relationship with the carrier can be ruined because of that. We also have re-sellers whose relationship with the carriers would be ruined by arbitrage traffic.” So what can be done to stifle fraud without having so much regulation that it is impossible to do business? According to Peek “there should be standardisation [of rules and regulations] because, for example, in the Netherlands we allow adult content, but it is not allowed everywhere. We definitely don’t need more regulation. We need consequences for malpractice, cut off your money or pay a penalty. Ideally we would like global standardisation in the different territories, but this is never going to happen.” MDC’s Brown also advocates standardisation across territories and believes a cross-border handbook covering each territory would be invaluable in doing business worldwide. He said: “In terms of regulation, the UK leads the way and other territories replicate their framework, so there is some standardisation across borders. But it is never easy to set up services. You have to find an in-country provider and do due diligence on them. For example, you find out what are the payment terms, typically in the UK it is 45 days, but in some countries it is 120 days, which can really affect your cash flow and factoring. “For regulations across territories there should be a ‘Janet and John’ handbook that says, if you want to work in this market, here is a list of all the tier 1s and tier 2s. In the UK, each company has an expertise. We could build up a directory across each territory. “It can be the subtle nuances that cause a problem, the size of the text for the T and Cs. If you know all this information before you go into the market, you can know your ROI and when you can expect to make a profit. But also, you must remember margins will be different in different territories. You can get smaller payments off some customers, but that customer may stay with you for a longer period of time, for example, Badoo microbilling is huge, much higher than if it was subscriptions.” Despite the ongoing frustrations with fraud and arbitrage there are growing opportunities globally for the telemedia players but they must keep their wits about them to succeed. Peek is optimistic for the future pointing to Eastern and Southern Europe as territories for growth. He said: “Eastern Europe is on the up and Italy is more interesting than you might think due to the high population and the out payments are high.” However, when venturing into new markets, it is crucial for companies to do their research, not only on the regulations, pay outs etc. for each territory, but also to ensure the content matches the market. A one-size-fits-all proposition does not work, and companies must tailor their content. telemedia issue 32

billing

R.E.S.P.E.C.T. Has PSMS reached it limits as a billing tool? The rise of Payforit suggests that at the very least merchants are embracing this new billing tool. Here Paul Paterson, chief commercial officer, at ImpulsePay looks at why Payforit has finally got some respect from the boys and hints at where it goes next

ayforit was launched in 2007 as an alternative mobile billing solution to Premium SMS, which was reaching its limits as a payment mechanism and was no longer suited to the modern operator’s requirements for a billing solution. As with many new services, the initial take-up was slower than hoped, but merchants could see the value and so Payforit started to grow. New iterations were created to provide additional services, with the latest, Payforit 4, launched in the summer of 2012. One of the reasons that version 4 has been so well received is that despite the early promise, previous versions of Payforit simply hadn’t been given the care and attention that was required. Now, with improvements to the payment screens, the embedding of the payment process to improve the flow and an overall reduction in consumer drop off, Payforit is no longer the ugly duckling of the PRS industry, it is a well respected and highly valued mobile billing solution. From all the feedback we’ve received – and we’ve been working with merchants since the launch of Payforit 4, in fact the first merchant to go live with Payforit 4 was an ImpulsePay customer: Cross Country trains in June 2012 – we can clearly see that merchants are starting to love it.

From the data we have, conversion rates are better than ever before. Some of our merchants are now getting 80% conversion rates Merchants can see straight away that Payforit 4 looks better, the payment screens are more visually appealing and the new mobile embed screens, which keep the payment window within the merchant’s own site, help to maintain brand awareness throughout the payment process. In fact Payforit is probably the only payment solution that does that and doesn’t spit the consumer out to another page, screen or even another site altogether. Of course all of this helps the consumer’s flow through the payment screens – in turn increasing conversion rates.

Gathering Momentum But the improvements are beyond just aesthetic, Payforit is

telemedia issue 32

gathering momentum and is now seen by some as the de facto mobile billing solution. The more momentum it gathers… the more merchants join up… and the more momentum it gathers. We’re getting very close to that tipping point right now. Of course one additional factor to all of this is the support that Payforit gets from the UK’s mobile operators. To create Payforit they had to all work together and to update the service, as they did with Payforit 4, again it took collaboration. That sense of “unity” from the operators shows that Payforit is being backed, supported and is going to be around for a long time to come. Payforit is also gradually taking over from Premium SMS (PSMS) as the operators start to mandate the use of Payforit to try and reduce the issues associated with PSMS. We’re already seeing a number of services switch over under their own volition, before it is an enforced change by the operators. The advantage of this of course is that it gives them time to make sure that Payforit is working well for them before they make the final change.

Consumer Happiness All of these changes as well as the increased momentum is great news for consumers and that of course is the main goal for all of us working with Payforit. If we can make life easier and smoother for the consumer, then in the long run we increase conversion rates and make more revenues for our merchants. From all the data we have, and we have a lot as we work with so many Payforit merchants, conversion rates are better than ever before. Some of our merchants are now experiencing conversion rates of over 80%, which is a marked increase over the previous versions of Payforit. Obviously we work hard with our merchants to help them improve conversions and revenue. One key factor that Payforit strongly promotes is that the consumer is made aware of the cost before hitting the payment page, as this helps to increase conversion rates. On top of that we provide detailed analysis of each step in the consumer journey through our online reporting tool to give mer-

billing

chants valuable insight if consumers do drop out of the payment process. However, the very momentum that Payforit is gathering is also another reason why the conversion rates are increasing: more and more consumers are using Payforit again and again. Once a consumer has used Payforit for the first time â&#x20AC;&#x201C; and found it to be a smooth and simple process â&#x20AC;&#x201C; they are more likely to use it a second time. As more merchants use Payforit more consumers will be exposed to it and so the whole virtuous circle goes round. This is one of the many reasons that we continue to be very positive about the future growth of Payforit.

operators are continuing to support it and are constantly looking to innovate. Bodies like the AIME Payforit Working Group, which provides a forum for aggregators and operators to work closely together, are always on the look out for new features and product improvements. A number of such improvements have already been discussed. Single-click payments or in-app billing solutions may be part of the next wave of Payforit. But whatever the improvements, we know that Payforit will offer an outstanding consumer experience, drive up merchant revenues and continue to rise.Â

Further Developments Yet despite all the positive momentum Payforit is not standing still. The mobile

telemedia issue 32

Swings, roundabouts

and the NFC-saw

Payments

obile World Congress – the annual jamboree for the B2B mobile industry that takes place in Barcelona, Spain – may have moved to a shiny new venue in the city, but in some ways this year’s event was a bit more like the old days pre-

2007. Where was Google? Where was Apple? Apple is never a big player in this particular mobile event, preferring to remain aloof on the sidelines, but Google has in previous years had a stand so big that it featured a slide and robots. This year was almost non-existent. And Eric Schmidt, exec chairman of Google wasn’t there either – despite having given the keynote at the show in 2011 and 2012. But while this made for a curiously ‘old skool’ event where the likes of Nokia and Sony dominated the mainstream headlines with the launch of new devices (it was like the last six years never happened!), Google did give a keynote speech – about Google Wallet. This was significant because mobile money and payments become one of the de facto themes of this year’s event. Indeed, the mobile money industry is expected to grow from $13.8 billion in 2013 to $278.9 billion by 2018, according to a study released by global research group Markets and Markets. And while some of the big names in today’s mobile landscape such as Apple and Google were missing, the show sort of became a Visa and MasterCard showcase as the two vied to bring mobile payments – and NFC in particular – to the

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masses. While us iPhone owners may have felt a bit out in the NFC cold at the show, Visa announced that it has signed a deal with the Korean handset maker so that Visa Mobile Provisioning Service (MPS) will work on Samsung NFC enabled handsets. In addition, Samsung has agreed to load Visa’s payWave applet onto its NFC devices. Visa’s MPS deal with Samsung is significant for the banking world as it means that next generation Samsung handsets will have NFC and financial institutions will be able to load payment information over-the-air to secure chips in the device. This, along with embedding payWave into handsets suggests that soon off-the-shelf Samsung phones will be able to deliver integrated mobile payments and a personalised Visa service to users. It is a key move in getting mobile payments – not least NFC enabled mobile payments – up and running and marks a bold move for both Visa and Samsung. “We all know that the center of commerce will be these devices,” said Jim McCarthy, head of global product at Visa. “It’s not just about using these devices to pay, but also the fact that today in the Visa ecosystem we have 30 million merchants but the fact is there are over 7 billion of these devices that can be turned into terminals and turn consumers into merchants for payment.” To achieve this Visa has taken the wise step of opening up this process not only to handset makers such as Samsung (not Nokia, whose star continues to fade), but also to third parties

PAYMENTS and merchants, which will be key to getting mobile payments out to the masses. One of the beneficiaries is Monetise, which is a long time partner of Visa. It will be developing a remote payment platform for Visa so that the company can start to make offerings globally, but with the relevant local branding, such as Movida brand in India. “Visa can’t do this alone,” said Bill Gajda, global head of mobile at Visa, adding that adoption rates and usage patterns will vary by market. “Where banks can get access to those devices and that alternative secure element, you’re going to be able to create your own mobile wallet built on your mobile banking application that includes NFC payments. And we’re going to be able to use that Visa payWave app that’s already on the device that’s out of the factory, as well as our provisioning service to get all of your accounts onto those phones,” adds Gajda. Monetise is also a nice indicator of how mobile payments are taking shape, announcing at the show that the value of payments and transfers initiated via the Monitise Enterprise Platform is now more than $31billion annually, compared with $10billion a year ago. Its global Mobile Money business is handling 2billion transactions each year, compared with 480million in February 2012, underpinned by registered customers climbing to 20million from 6million in January 2012. North America is a significant market for Monitise with 10million direct registered end users. Meanwhile MasterCard used the event to roll out MasterPass, an enhanced version of its PayPass mobile wallet, that will support checkout services for merchants through a gamut of technologies, including NFC, QR codes, tags and mobile devices at points of sale. It will be rolling those out in Australia and Canada in March and aims to have it also out there in the US, UK and then eventually Belgium, Brazil, China, France, Italy, Netherlands, Singapore, Spain and Sweden by the end of the year. MasterCard now has 27 financial institutions, 21 technology partners and 16 merchants on board for the effort as it looks to expand to more than 5,900 merchants. The company also announced new partnerships with mFoundry’s mobile banking solutions and Orange in Spain. Finally, MasterCard released a new study at the show – in partnership with Prime Research – that found that “early adopters have a 58 percent favorable rating of mobile payment technology while those yet to adopt have a more positive outlook overall at 76 percent.” At least they all seem to be barking up the right tree. The show’s focus on NFC was clear and marks a thermonuclear push at getting the technology adopted across the financial services and m-commerce worlds. It was certainly helped along by the GSMA (the organisation that runs the show) integrating NFC into its show guides and, more presciently, as a means of payment in the cafes and bars at the show ground and in the city as The NFC Experience (which made me think of a Jimi Hendrix tribute band for some reason). The NFC-enabled app that sits behind the Experience, came together as a partnership between the GSMA and CaixaBank, Gemalto, Telefónica Digital and Visa Europe, and formed – along with a totally mobile enabled fake town – the centerpiece

of this year’s show. “The NFC Experience provides attendees with the opportunity to experience firsthand the potential that NFC technology holds both throughout the Mobile World Congress venue and in Barcelona,” said Michael O’Hara, chief marketing officer of the GSMA on the opening day. But, while the technology on show was impressive, there was one tiny flaw that more clearly demonstrated the problems with NFC, rather than showcasing what it can do: the handsets. To get the NFC Experience to work, the GSMA had to hand out 3500 NFC enabled Sony handsets to a tiny proportion of the 70,000 attendees and press so that people could actually use it. They also stuck €15 of spends on each one. This is a tacit – and costly – admission that most people don’t have an NFC handset. In fact, looking around at the delegates of mainly VP-level execs, CEOs and techies, most had Samsungs or iPhones – which rendered the NFC experience dead to all but a few. And this clearly shows the problem with NFC: no one has a handset that does it and, while the NFC world waits for the to happen, other payment technologies are going to start to become the means by which consumers pay for things using their mobile phones. In fact, while NFC was all over Congress – and I and many others never really got a chance to use it thanks to our iPhones – it could be argued that it’s just being pushed for the sake of it. There is no clear evidence that anyone wants to use it. Rather the contrary. Research published at the show by eMarketer points to proximity based payments not being very popular in the US (though it does cover its ass by appending an all important ‘yet’ to that statement). According to its research, point-of-sale payments using a mobile phone as a payment device – whether via nearfield communications or other contactless technology – will total just $640 million this year. But that’s an increase of 283% over last year’s even smaller base, and a number that will rise a further 234% by the end of next year. By 2016, proximity mobile payments will have exploded in the US, and total transaction value will hit $62.24 billion. However, it isn’t all about NFC. While the big guns at Visa, MasterCard and Google hogged the spotlight, PayPal announced that it was revving up its mobile payments offering too – and that it saw no need to get bogged down in NFC. PayPal’s thinking bypasses NFC completely. You simply pull out your phone on the way to a store, open the PayPal app to make your order and pay for it in advance. When you arrive, the cashier already has your picture and your order and hands it over. Whatever the complexities, consumers are going to see banks, carriers and card companies scrambling to have them start paying with their smartphones this year. telemedia issue 32

gaming

E M O A F G PHONES

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gaming

ince about 1997, each year has been dubbed the year of mobile – but we can say now with some authority that 2012 was actually the year of mobile. How do I know? Because now every sector that has toyed with mobile technology to improve its business now gets it and is moving from using mobile as a platform to having to fully understand how the power of mobile technology is something that goes way beyond just mobilising the services they already do on other channels. There are two places where this has become achingly true: retail and gambling. Today, brands in these two vertical markets – which do share some links, not least in some instances high street shops – are looking beyond just getting an app or m-website, and are starting to see how mobile, to use an hoary old cliché, is the glue that binds channels together. With the mGaming Summit taking place in London on 24 April it is interesting to note that much of the content is still focussed on the basics, rather than delving into the true value mobile brings to the sector. It’s not about apps verses web any more (see panel). It’s not even about designing mobile services. Rather it is now about the fundamental place that mobile needs to take within a gambling operator’s business as part of the customer experience. “You need to look now at how your business has a mobile strategy right across the board,” says Siamac Rezaiezadeh, strategic account executive at OpenMarket, one of the key sponsors of mGaming Summit and its sister show mSports Summit. “Your product teams certainly need a mobile strategy, but so too do your operations teams and customer support teams. It’s all about how you now use mobile as a whole business to interact with your customers and deliver a customer experience.” The idea is that not only are more consumers playing gambling games through their handsets, but also the mobile is the place where you can most easily reach out to them too. “So you have to have a strategy for mobile that reaches right across the company as it all helps drive customer experience, which in turn is the key to both acquisition and retention of customers,” says Rezaiezadeh. And this is really what mobile is about: it isn’t so much just a place to gamble – with the rise of tablets, web-enabled TV and smartphones, the actual mode of playing online or mobile is becoming blurred; it’s all just playing. Rather mobile is now a channel through which to beef up existing acquisition and retention technologies (and perhaps invent a few new ones along the way).

Acquisition position The acquisition part of mobile’s role in gambling is the real indicator of how it binds the whole business together – and it is good old SMS that holds the key, believes Rezaiezadeh.

“It is all about calls to action and it covers everything from adverts, billboards, TV and shops – you put text <shortcode> and you have people engaged. If you can get them to engage through mobile then there is a good chance of converting them,” he says. Within that text engagement the gaming operator needs embed a click here to bet now or at the very least a link to a site, if not a place to download the app and play. If they are already signed up with you then you can send them off to play straightaway. If not, then send them to the registration page and give them some sort of cool introductory offer. This is all standard marketing stuff – albeit initiated from many different starting points thanks to mobile’s ubiquity – but mobile offers one other really interesting (and much under-rated) engagement tool: payments. OK, so the mobile media is rife with tales of the power of mobile payments – choosing to usually focus on NFC, mobile wallets and Weve – but simple Payforit or PSMS operator billing payments actually hold the key to acquisition of mobile players. “Putting the cost of something onto your phone bill with one or two clicks takes all the friction out of the process,” says OpenMarket’s Rezaiezadeh. “It can also create new gamers.” The idea is simple: signing up new players over mobile

The idea is simple: signing up new players over mobile can be instigated by a text call to action, but once you have them you need to make it as easy as possible to engage them while they are interested can be instigated by a text call to action, but once you have them you need to make it as easy as possible to engage them while they are interested. Getting them to sign up, add a card and so on from a smartphone keyboard is a huge hurdle. But if you can build into the marketing the process that you can just pay through your mobile then you have a frictionless way to get them to sign up and start playing straightaway. Arguments that operators take too big a slice of the money are also starting to fade, making this process ever more attractive. “Operators now allow one of payments of up to £30 via SMS on mobile and outpayments are up around 85%,” says Rezaiezadeh. “As this is an acquisition tool, these costs can be built into the cost of acquisition and figures are starting to stack up.” But what is perhaps more interesting is that mobile payments and text calls to action can start to monetise a whole new demographic of players: the regulator small stakes players, who pop £5 a day on and play once or twice a day for telemedia issue 32

gaming small stakes. “OpenMarket also pioneered mobile crediting so we can put money onto pre-pay phones or contract bills so that as part of your offer you can actually give people money to play with on their mobile,” says Rezaiezadeh. It may sound small fry, but there are many of them, so it’s a potentially very valuable sector to chase, believes Rezaiezadeh. And simple SMS marketing and calls to action, coupled with frictionless mobile payments make it ever more likely to capitalise these players.

Retention dimension As we have seen, mobile is in people’s hand, metaphorically at least, pretty much all the time and, while it’s clearly got a lot of leverage with customer acquisition and enticement of new players, it can also be used to keep the players you have. This is where the idea that mobile can underpin everything you do comes into play. It’s about how to market to people directly through mobile – using many of the techniques discussed above around acquisition – but it is also about how to use

mobile in the customer service and wider customer experience environment that is where mobile becomes a retention tool. The real key – as with everything in mobile – is to understand the customers you have and use that data to build better services for them and give them the offers they want. “If, say, you are at a Rugby match and you have a bet on the England will score first and Wales do, then send out an SMS saying “bad luck: but why not bet on England scoring next at these odds?” says Rezaiezadeh. “It’s all about targetted messaging and understanding what consumers want.” And this is the real mobile challenge facing gaming operators: making sure they have the data at their finger tips and are ready to slice and dice it in unusual and reactive ways to make it useful. “Gambling operators are getting this and some are ready to make it happen, but it’s the biggest challenge right now – they have to understand what data they have, what data they need to gather and then how to use it to create new marketing products,” says Rezaiezadeh. This, then, is the real mGambling challenge: gathering data about your users and working out how you are going to use it with intelligence and agility to make the whole experience even better.

Old foes: Apps vs HTML5

One of the biggest debates in mobile commerce – within which we lump mobile gambling – is whether operators should go down the native apps or the m-web route to service customers. Looking generally at the consumer market, apps seem to be ‘winning’. A study by Compuware found that 85% of consumers find apps more convenient and offer a much better experience. This is something certainly born out within the gambling sector: apps are richer and deeper. However, just because consumers appear to prefer apps, does that mean that they are the best way of running your mobile gambling services? As Henry Ford said about his cars: “If I had asked people what they wanted they’d have asked for a faster horse.” The biggest two issues with apps is that firstly it is hard to get people to find yours rather than your competitors’ apps and secondly that updating them is a royal pain in the proverbial. Apps stores are full of apps and unless someone knows your brand name or game name they are not necessarily going to find your app and download it and give you their money. Also, once it is on the phone, will they bother to find it again to use it? 75% of apps are used once then forgotten. Of course, mobile marketing as discussed in the main part of this article can help with that, so this isn’t an insurmountable problem. However, the issue of updating apps is. It takes time to get updates to apps written, approved and loaded to apps stores. The updated apps then have to be pushed at the users who then have to be bothered to download them. This process can take as much as two months, so realistically you are looking at being able to update your app, at best, four or five times a year only. “This is simply not enough for any gambling service,” says Gary Wimbridge from technology provider Aditi. “The key to keeping casino and poker players interested is in offering new games, which means updates, even to the look and feel. For Bingo and Lotteries, the money often comes from the services offered around the main game, which again needs keeping fresh. For sports bets it’s a nightmare as the games, odds and players change daily. So updating via an apps store is clearly not ideal. Plus, not all apps stores offer gambling games.” The answer of course is to go down the web route and start using HTML5 and adaptive web design that allows a build (and update) once and distribute anywhere model. But you lose some of the richness and experience. “This is a trade off that gambling opeators and players have to be prepared to make,” believes Wimbridge. “HTML5 will start to improve design of m-websites and the experience will improve, but the updating process for the operator will be much easier.” The key development, Wimbridge believes, is that these HTML5 websites will start to sit behind things that look like apps, so that consumers think they are using an app but get all the advantages of an updatable web presence. It also offers the scalability needed to service an ever growing range of devices and iterations of existing devices. So, while consumers may think they prefer apps, many will probably be playing HTML5 hybrid web apps without knowing it and the app vs HTML5 debate will have a real winner: the web.

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show preview

Mobile Gambling & Mobile Sport Today’s big thing; tomorrow’s competitive edge

obile is no longer the ‘next big thing’ in gambling or sports (or anything else for that matter), it’s now an essential platform for today’s progressive high value online sectors. Research also suggests that mobile particularly attracts new, younger more sports-minded customers to gambling, while still driving higher yields from existing gamblers. Combined with the vast array of new billing and

direct marketing tools, companies with a strong mobile proposition look set to gain the biggest share of this hugely lucrative market opportunity. The sport industry is also seeing an influx of mobile technologies that connect fans to events, teams, brands and the athletes themselves through mobile websites, apps and social media. This year the mGaming Summit and the mSport Summit will run on the same day in recognition of the clear synergies between these two industry sectors. This we will enable both del-

egates and sponsors to participate in the Sports and Gambling Sessions plus all other scheduled networking events.

sponsors

e’re delighted to announce that the mGaming Summit will host the 2nd annual mGaming Awards – which will reward the top performing operators and innovators in this exciting industry niche of mobile gambling. Join over 300 industry professionals and invited guests for an evening which recognises innovation and celebrates success in mobile gambling. The Awards Ceremony is free of charge for mGaming Summit delegates, speakers and sponsors and takes place directly after conference networking drinks – it includes complimentary canapés and drink. All finalists will gain a huge industry profile and enjoy significant PR and marketing benefits that are included (free of charge) as part of the administrative and promotional process. These include:

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nominations deadline 28th maRCh Anybody involved in the industry can make a nomination. Categories are: • Best mobile sport betting operator • Best mobile casino operator • Best mobile bingo operator • Best mobile Poker operator • Innovation in mobile • Best Gambling app • Best mobile billing application Judging 2nd – 12th apRil The judges are chosen for their expert knowledge within the Mobile Gaming Industry and will review each nomination against the criteria on the nomination form. They will all collectively decide on a shortist which will be published for the final voting stage voting 15th – 22nd apRil All delegates to the mGaming Event have the opportunity to make the final decision on who wins the awards. The decision is yours!

sport

In it to win it Scoring big

with mobile in sport

xciting times lie ahead for the sports and telecoms industries. If they can work as a team and offer the right content at the right price, they will surely tap into the fans’ ‘passion points’. There will be a revolution in the way supporters consume content before, during and after a match, inside or outside the stadium, and could be the pot of gold that sports clubs and telemedia players have been talking about for

years. According to a recent forecast from Canalys, worldwide mobile device shipments – that’s notebooks, tablets, smartphones and phones – will reach 2.6 billion by 2016. If correct, this provides a great opportunity for the telemedia industry to work with sports and the entertainment industry to add value to the fans’ experience. Innovative mobile content can increase monetisation and create a large customer database, which is invaluable to advertisers and sponsors. The main obstacle to the fans being given access to an allsinging, all-dancing multi-media experience, while watching their team live, is the lack of wireless-enabled stadiums. When stadiums in the UK are fully connected fans can expect mobile ticketing, the ability to order food, beverages and merchandise, access to player and game stats in real time, instant replays, in-play betting and lets not forget, navigation around the stadiumitself. One such company aiming to make Wi-Fi enabled stadiums a telemedia issue 32

sport reality is Sports Revolution, a sports media and marketing group and in-stadia media rights holders in the UK. Sports Revolution represents 16 Premier League football clubs and its name could be appropriate, the company insisting it has overcome the challenge of turning stadiums from digital black spots to Wi-Fi hotspots. Martin Copus, Sport Revolution’s director of digital, explains: “For the last 18 months we have been putting together the technical capability of stadium Wi-Fi for the rights holders, making sure the business models are appealing for all parties. At the beginning of next season we will see the first Wi-Fi stadium installation for 50,000-plus seats. “Stadium Wi-Fi technology has been around for a while, but getting it right from a commercial perspective for the rights holders and advertisers, and to some extent the fans, is the tricky part,” he says. There is already a high penetration of smartphones in the UK and that is set to grow. Canalys believes that in 2016, smartphone shipments will double the 695 million achieved in 2012. Copus insists that this smartphone adoption rate will enhance the match-day experience for the fans and increase the ‘dwell time’, with fans arriving at the stadium earlier and leaving later,

Stadium wifi has been around for a while, but getting it right from a commercial perspective for rights holders and fans is the tricky part to access the added value services on offer. “Football fans’ ownership of smartphones is above the national average because, if you are passionate about sport, it is predicated on multimedia, so these fans are drawn to a device that delivers multimedia, irrespective of their socio-economic situation,” says Copus. “But the big issue for delivering mobile services for sport fans is that a lot of stadiums are black spots as far as signal strength and bandwidth is concerned.” However, Atlas Premium Brands chief executive Nigel Tatlock does not believe the increase in smartphone penetration is the great driver that many claim. His company distributes branded media content through mobile apps, and the web, as well as social media, and boasts exclusive deals with many of football’s biggest names including: Real Madrid, Chelsea, Manchester City, PSG, Inter Milan and Marseille. Tatlock believes that “The birth of smartphones has not helped. The sale of content is on the descendency, while the desire is on the ascendency, as kids are very clever at ripping off content from the internet. Football clubs are very lapsed in addressing this issue, but they need to slap some legs because it is costing them money.” Copus believes that when other clubs see that the proposition works, they will be eager to get in on the act. He said: “We have a waiting list of clubs. They understand the concept of Wi-Fi stadium, though each proposition will be a little different - depending on the size of the stadium. Size does matter, for example, the audience level, which advertisers and sponsors will look at that, and also the technical challenge to make sure fans have a great experience.

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“The portal sits on top of the technical platform and the fan will use his mobile phone to register and have access to all the media capabilities on offer. It can offer such services as in-play betting and looking at the pitch from different camera angles, creating an enhanced match-day experience.”

Place your bets

As a large proportion of football fans already participate in inplay betting, Copus believes this could be a good way to monetise these new connected venues with fans able to access betting while watching a live match, for the first time. The stats seem to back Copus’s confidence. According to Juniper Research’s report, the mobile betting market is expected to reach $45 billion by 2017 with betting from mobile devices across all types of gambling expected to hit $100 billion by 2017. Tatlock, although more interested in focusing on the millions of supporters around the world, rather than just those in the stadium, can see the possibilities of in-play betting. He said: “Wireless-enabled stadiums will help football clubs but it is more about the experience you can give to fans, not the 46,000 that turn up week-in, week-out, but the millions around the world. “As far as in-play betting is concerned, you could get the betting company to pay for the wireless network and they would have exclusive rights in the stadium. At Manchester United, Bwin are still taking paper bets, and corporate clients can be lazy and won’t walk the 50 yards to return the slips. If they had tablets, they could place bets at their leisure and people get a lot looser with their cash when they’ve had a few beers. At United, there are 15,000 corporate seats, 5,000 of which change on a weekly basis, these are prospective new accounts with people spending from £10 to £1000 per bet.”

Social services Tatlock believes that instead of looking for the transactional value that these connected stadiums could provide, telemedia companies should think about the bigger picture. Tatlock said: “We take the clubs’ digital assets and help them monetise them and build their CRM. Clubs try to engage with fans and equally brands want to engage with them. Brands need to be seen to be getting value for money. As a brand owner, yes you want to be associated with success but you want to interact with that consumer market. APB helps clubs break into emerging markets. We helped Chelsea go from just a few supporters in Indonesia to 3 million CRM and increased their Facebook presence to a million users.” APB is an expert in the field of using social media around sports brands to help the fans engage with their clubs and the company recently acquired real-time sports news feed Tweetsport. Tatlock says: “It gathers Twitter feeds from players, like Rio Ferdinand and Michael Vaughan, clubs and associations etc. and gives you something fresh, allowing consumers to communicate and share content with friends while watching the game. It is monetised through sponsorship, advertising such as banner ads, merchandise sales, ticketing and video on demand.” Social media is a subtle but effective tool to engage with fans who are more interested in hearing the views of their peers (ie their fellow fan) than the powers that be (the club). Matthew Bowden, account manager at Velti, one of the world’s largest mobile marketing communication agencies, envisages a future where sport and social media will be working increasingly close

sport together. “In the US political campaign they weren’t just using Twitter and Facebook, they were using things like Instagram,” says Bowden. “This is the way the clubs should go, showing images of players in the dressing room, letting the fans into that world, making them feel part of the club, using those channels of rich media content. Things like tweeting by a club can feel a bit contrived, but content can play a much wider role using things like Vine, Instagram and even videos on YouTube which can go viral.” Tatlock agrees it is all about engagement, creating that stickiness so that the fans will come back and interact with your brand again. He said: “You want the kids to come back. Clubs can be very narrow-minded in getting their £3 out of someone, when in reality they should be concentrating on page impressions, building up the customer base and giving them value for money.” Tatlock believes the big teams will have their own social network eventually. He said: “Social media is just the start, teams like Real Madrid and Manchester United should run their own social networks. If you look at Facebook, and its alleged 800 million users, Man United would gain significant value by building its own Facebook.” Although, in terms finance, the sports industry, and the football industry in particular, bucks the trend as far as the economic downturn is concerned. There is a warning to any telemedia companies that want to crack the sports market – buying content rights can be incredibly expensive and you might not always

recoup what you invest. “Regarding content rights issues, we have built up a library of extensive licences, with clubs, leagues and associations,” says Tatlock. “But it is expensive. A lot of people coming into the market think it will be cheap, but it is not. It costs around £80,000 for the digital rights of one club for an emerging market. MTN paid £55 million over three years for Manchester United’s digital rights, how are they going to recoup that?”

tickets please Mobile ticketing is seen as a key driver in the quest to bring sport and mobile services together and this, done correctly, can not only save the sports fan, or music lover, money but enable them to engage with the brands they love. One such company blazing a trail in the ticketing market is Last Second Tickets. The company provides distressed inventory to a closed-user group. They sell tickets for live music concerts, theatre, and sporting events, such as boxing and football. They are especially focused on mobile and the mobile channel, ensuring they have a full crossplatform offering. Craig Massey, LST chief executive, explains: “We are very focused on unsold tickets in the last seven days, a third of all pre-bought tickets remain unsold. We work with venues and promoters. Once we are given an event and a geographical area, we tag it and, working with our database partners – for example Orange, Virgin, Confused.com – we cherry pick who is most likely to be interested in a particular event. Then we notify them using SMS with a link to the mobile internet, email or a push

Don’t take chances with your mobile business Engaging directly with consumers through mobile devices can be an unpredictable affair. Perhaps you’re not getting the focused service you need or the reliability you can count on. Take control with the OpenMarket mobile engagement platform. We provide the industry-leading crosschannel, cross-network platform with extensive mobile operator connections around the globe.

Get started today! OpenMarket delivers the operator connectivity, application building blocks and mobile payment capabilities that drive your mobile business success.

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sport notification to a mobile app.” Massey continues: “We hunt and seek out pockets of people and have built a proprietary platform called Tribes. But if we have added value, such as a discount or VIP upgrade, we have to hide them, because the last thing the promoter wants is to cannibalise ticket sales. For example, if we forward a football supporter an offer of a discounted ticket and he forwards it on to his mate who tries the link, it will come up ‘page not found’, because it is a one-time URL and linked to his IP address. We are anti-SEO and guarantee our clients that we will never appear on Google. Artists do not want to be seen to be in the bargain basement of Woolys, so you need to tread really carefully with agents and A-list celebrities.” Although the solution has already proved itself many times over in the live music market, Massey is frustrated that football clubs seem reluctant to try it. “There is a real issue with season ticket holders at football matches being no shows, our SMS or ping to mobile apps is a ready-made solution to allow season ticket holders to offload their tickets, make money and give other people a chance to go to a game. It is win-win for everybody. But because of the threat of hooliganism, football clubs are more controlling.” Massey believes that ticketing will inevitably end up using NFC, which will sit in the guts of the smartphone, but believes it is going to be a slow burner. “NFC is one protocol, RFID, the whole thing is just one kit, so once it is there a million service providers can do stuff with it.” LST COO Stephen Ebanks has first-hand knowledge of foot-

ball’s quest to go digital. He was head of sales and marketing at Coventry City in 2010, which was home of the first cashless stadium in the UK. The system was intended to reduce the time fans spent queuing at matches, whether it was for tickets, or food and beverages and was based on NFC-type technology, MiFare Classic RFID chip. Although Ebanks admitted there was much scepticism from the fans at first because it was, they felt “forced upon them”, he insisted that they came round to the idea. “It worked really well, allowing fans easy access to the ground, giving them the ability to top up online and buy food and beverages using their card. It also enabled the club to plan ahead, as they understood what sold best in what particular section of the Ricoh Arena.” Ebanks, too, believes that NFC will take mobile ticketing to the next level, insisting, “There were problems with cashless contact cards, its technology is not in the same realm as NFC. While NFC is very open, MiFare is very locked down – it takes a huge process to say who has access to the chip.” Connected stadium access, the advent of NFC technology and the increasingly symbiotic relationship between sport and social media will be the key drivers for sports clubs/brands and telemedia companies to feed content to hungry fans and in turn generate profit. New territories and markets also represent a big opportunity, especially in football where the Premier League is loved around the world. It is not just about the developing markets of Africa, Asia and India (for cricket) though, North America is finally taking football, or ‘soccer’, to its heart and could once again be the land of opportunity.

Empowering the Mobile Industry www.themda.org www.text.it www.charitytext.org MDA is pleased to support the World Telemedia event, 16 - 18 October 2013, NH Hotel Barbizon, AMSTERDAM

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Second screens,

ﬁrst priority

fter the migration to bi-directional networks, two market developments have catalysed the technology revolution currently faced by the Pay-TV market: the emergence of the Internet as a feasible means of video distribution and the creation of a horizontal market of multi-function receiving devices. Both of these trends have broken down the traditional video delivery chain by enabling the “unbundling” of Pay-TV services. Faced with the demise of the traditional way of conducting business, Pay-TV operators have been through several stages of grief, starting with denial (Internet services will never have enough quality), passing through bargaining (let’s incorporate YouTube into our proprietary platform), and now most are somewhere between depression and acceptance, trying to integrate both over-the-top services and multiple devices within their service proposition. By lowering the barrier to entry for Pay-TV operators, the Internet has enabled new competitors from all parts of the value chain. In most countries, this has resulted in polarisation between content and infrastructure providers. Usually, companies that have invested hundreds of millions in developing fibre and DOCSIS infrastructure are now keen to ensure that their clients have access to as much

content as possible, even if that content is not theirs. Many cable operators have sold or spun off their content divisions in the process. On the other hand, operators that have concentrated their investment on securing exclusive content are finding themselves under pressure to monetise this content beyond their current subscribers and network footprints. In the last five years there has been an explosion in the number of devices capable of connecting to the Internet and playing out video, from mobile handsets and tablets to game consoles and TV sets. While there has been some unification of standards recently, the receiver market is still highly fragmented, forcing content providers to pay for multiple formats of content distribution to maximise their addressable market. That is why companies which depend on thirdparty devices to reach clients are especially keen on standards such as HTLM-5. Netflix, for example, has been implemented on over a thousand streaming devices – but despite rapid subscriber growth, its costs of technology development have increased consistently, growing from 6.8% of revenues in 2009 to more than 9% in 2012. New devices and over-the-top sources of content have made the job of providing Pay-TV services significantly more complex. Firstly, from the user

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experience point of view, operators were already finding it difficult to combine linear channels with proprietary VoD and PVR. As operators tried to add to that Internet catch-up, applications, social networking, user-generated content and multiple providers of Internet VoD, users found themselves spending more time looking for content than watching it. To help with this problem, many of the new generation Pay-TV services are using secondary devices to transfer complexity to an easier to navigate touchscreen interface such as tablets and smartphones used as remote controls. However, if user interfaces are becoming more user friendly through the use of secondary screens, primary device complexity is not as easy to solve: the process for proprietary platforms to incorporate multiple sources of content following different technical roadmaps, meeting content providers’ security requirements and working satisfactorily within hardware constraints is time-consuming. And while the old, high-barrier-to-entry, networkdriven Pay-TV services could have the luxury of taking their time developing new services, they now face competition from quick turnaround, “networkless” services that have global scale and deep pockets for innovation. Users have grown accustomed to the quicker innovation cycle from web services, and now expect their TV provider to rapidly incorporate new features and content. Trying to achieve an all-flexible service that is prepared to accomodate changes to all components of the service immediately is impossible. With too many moving parts that

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are not dependent on the operator, the result can be total paralysis. Pay-TV providers have therefore usually tried to prioritise network, device or content, resorting to at least one of the following strategies: • Virtual cable operators – New entrants to the Pay-TV market, such as Netflix and Lovefilm, concentrate on aggregating content and distributing it over a wide range of networks and devices. • Hardware gatekeepers – Consumer electronics players, such as Apple, Microsoft and Google are network-agnostic but play gatekeeper to thirdparty services. • Pipe-focused operators – Primarily incumbent cable operators concentrate on taking advantage of the capabilities of their network infrastructure by focusing on functionality that requires high bandwidth. • STB-less operators – As demonstrated by Samsung and TeliaSonera, operators can leverage partnerships with connected television manufacturers to offer an operator-branded set-top-box-like experience. • Outsourced middleware – Using a middleware platform that already has partnerships with content providers and their own recommendations services (such as TiVo) can be a quick way to get advanced devices into the market – however, speed costs (in terms of a share of revenues). • Media gateways – Media gateways, allowing advanced PVR functionality and redistribution of content around the home, have been used by large Pay-TV operators, such as Dish Network and UPC Liberty Global, in an attempt to tie customers into their own living-room environment. However as these strategies evolve, there are many operators still striving, blindly, to find a space in this new market order – their device innovation is often the minimum common denominator between disjointed product and technology roadmaps. While device development is becoming more strategic, technical constraints are still significant, so product roadmap decisions often end up in the hands of CTOs. Operators cannot afford to underestimate the importance of their device strategy and the integration of secondary devices – otherwise they risk becoming secondary themselves.

A new game in town

ame consoles have, over the past 20 years, dominated the home electronic gaming market. Every five or six years, a new generation of consoles have been released together with big budget game titles. In addition, Xbox and Playstation are being increasingly used as a video streaming player, and it’s widely considered that video will be an important use case for game consoles in the future. Over the coming 12-24 months, a new generation of game consoles will be introduced – and these will have a massive impact on the TV industry. Globally, the market for game consoles that are actively and regularly used online is about 100million devices. This is a market which is larger than the market for online Smart TV, media players and online Blu-ray players combined. However, the game console market is relatively stable, whereas the other markets are growing rapidly at the moment. A huge value with the game console market is that it’s self-selecting. Most users who have connected their game consoles are people who are younger, more internet-savvy and generally more positive towards consumption of content over the top. It is likely that per-device usage of the video apps on the game consoles will be much larger than usage on other devices for the foreseeable future. Game consoles are a very attractive way to reach a great potential customer group. Nintendo was the first of the three major console companies to launch their next generation device. Typically Nintendo, they didn’t focus just on raw power for the next console generation, but have introduced a new controller with integrated second screen features for a unique gaming experience. In addition, it’s widely considered that Nintendo has caught up with the functionality of Xbox 360 and Playstation 3, including the online video capabilities. Nintendo has a 12 month lead in the race compared to Sony and Microsoft, and needs to quickly build momentum to stay relevant.

While tablets and smartphones have grabbed all the second screen attention, games consoles are increasingly becoming a TV and video consumption tool – and a place to pay as well as play. Michael Lantz, CEO, Accedo, a provider of enabling platforms for apps and app stores for IPTV and Smart TV, grabs the joystick Playstation 4 was introduced to much fanfare on February 20, with an expected commercial launch before the holiday season 2013. Just like PS3, when it was launched, the new PS4 is a marvel of processing power and graphics processing, but from a video service point of view there are limited new functions compared to PS3. Sony is betting on a classic gaming strategy, where better game titles and improved performance will draw the core gamers to the platform. Microsoft hasn’t revealed its detailed plans for the next generation of consoles yet, but it’s widely expected to counter Sony’s move very soon to stay relevant among the core gamers. Microsoft is the console manufacturer who has the strongest commitment of providing an integrated living room experience including gaming and video. It is very likely that a next-generation Microsoft console will provide an even bigger shift towards non-gaming usage.

Target groups and usage trends In the broadcast TV industry, game consoles are normally dismissed with an analysis that the device is “in the kids’ room” and will not impact the core TV consumption. Of course, if you’re a 50-year old broadcast executive, this is likely the place where you see the game consoles being used. However, yesterday’s kids are today’s modern households. Someone who grew up in the 90s or 00s playing on game consoles would probably continue to play games when they grow up. They are likely used to the online features of the consoles and are less likely to get a full TV subscription when they’re running their own households. Instead, when disposable income is growing, more of their media consumption is shifted towards on-demand and interactive services. It is my firm belief that we will see a decline in normal TV subscription revenues from younger TV households and a shift towards higher spending on OTT telemedia issue 32

video services on game consoles as well as other connected devices.

The virtual TV operator Of course, this change will not happen overnight. OTT offerings don’t fully replace live TV and the bundled channel model is a very powerful model to get high quality content to many consumers. Over the coming 10 years most young households will likely still get a normal TV subscription, but ARPU will likely be lower with fewer subscribers choosing the top tiers and instead adding one or several OTT services.

Partnerships with TV operators and game console manufacturers will start to emerge as TV operators needs to reach younger consumer groups The game consoles will play a natural role in this development. Active gaming households are likely to have their game console in the main living room and with the press of a button, they will reach the offerings available via these consoles. The user experience will be better than on the set-top box, the content availability will be increasingly better, and, with a natural personalisation based on the game console’s online capabilities, it is not hard to imagine that a game console will be viewed as another, more flexible, more powerful and open set-top box. The console manufacturer has control over the experience, can promote content from various partners as well as

telemedia issue 32

their own services, and will have possibilities of charging consumers via the game accounts. For all practical purposes, the game console manufactures can act as a TV operator and provide a direct competition to existing players.

Local partnerships Game console manufacturers think on a global or regional scale. Even though they will have tens of millions of active users on a global level, they will in each country only reach a small subset of the potential audience. Local operators will in their respective markets have a much stronger local content offering, a better understanding of the local consumer and likely have better customer support and management. At the same time, game consoles can provide attractive outlets for global or regional providers, which can reach consumers directly without the need for distribution agreements with operators. I believe that partnerships with TV operators and game console manufacturers will start to emerge. TV operators would like to reach the younger consumer groups that will start to slip away from them, and game console manufacturers want to provide a better local offering than competitive OTT platforms. The biggest hurdle will be both TV operators and game console manufacturers are used to fully controlling their respective platforms. Both parties will need to adjust experience and business models to make the partnership work. The winning platforms will be the ones that don’t hold too much to their principles and instead strike the deals that will help them get an early start to their competitors.

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RETAIL

looking in T

elecoms operators have begun investing in understanding the potential of mobile services in the retail environment. Many are investing heavily in trialling tactics such as coupons, which are predicted to play a significant part in making SMS and MMS-based messages the second most widely accepted form of mobile marketing (to search). The UK’s main operators – Vodafone, EE, O2 and Three – have even joined forces to form Weve in an attempt to crack mobile retail, marketing and payments

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together. However, when you stop and think about it properly, there is actually very little opportunity within retail for operators and service providers. The bountiful data insights and rich experiences that are fuelling the growth of mobile in the retail environment don’t offer the same opportunity for operators and SPs. Yes operators and SPs believe mobile marketing will be a huge growth area for them and will revolutionise customer interaction. However, as consumers gain more control over the profile

RETAIL data available, as we all believe they will, the existing CRM approach is unlikely to work. Consumers are already far less likely to give out their mobile number now than they are their credit card number. Add to this the lack of examples of where premium SMS and location-based services have actually worked and offered a revenue stream and it seems foolish for operators and SPs to be looking at the retail environment. Indeed, I’d suggest that beyond a few contextual banners served to consumers browsing in certain locations, operators won’t see any returns from retail – not tangible returns at least.

Awareness is not everything Take EE as an example. It has recently put free WiFi into 500 ASDA stores. Like the deal between O2 and Costa, you enter your mobile number to obtain access to the WiFi. The value for ASDA in this deal is clear: the retailer could use the mobile number to target consumers or to get a better understanding of how long each customer stays within the store/how long they spend in each area. But what is the benefit for EE? Increased awareness? Definitely. But what else? The actually driver for this move by EE remains to be seen. Perhaps it has a master plan waiting in the wings to be executed once take-up of WiFi in-store reaches a certain point but, whatever the plan, I very much doubt it will manage to deliver the returns EE is looking for. In a similar move to EE, Sky has put broadband into a number of shopping centres across the UK. For Sky, this seems to be a straightforward information gathering exercise – no doubt to help it refine its new ad tools, which enables it to increase dwell time for all of the retailers within the centre. Another clear benefit for retailers, but what about for Sky itself? From a selfish perspective, Sky can use the data on usage of its WiFi in the shopping centres to track shopping trends in a particular area – such as what times of day are actually most popular for which shoppers, and how long on average are they in-store. This gives Sky significant power to approach brands, both within and outside of the shopping centres, to offer advice on where the brands should be focusing their efforts/where opportunities lie to steal market share from competitors. But is this enough of a justification for operators and SPs to invest in the retail environment? I think not. Having read my last few sentences you may think that operators and SPs are simply looking in the wrong place to try and capitalise on the mobile/retail relationship. Don’t be fooled. Superstores, while perhaps the first thought for most, do not offer the operators or service providers any benefits when it comes to the data that is the nirvana of marketing. Big or otherwise, data is clearly key to engaging and retaining customer. In the superstore environment, it is highly unlikely that the retailers will provide access to their data. Operators and service providers then will only see limited returns from any investment into this sector. Offering services to shopping centres has more potential. So, if you’re an operator or SP looking to jump into the fray here, shopping

centres must be the first battleground you try and win on.

A different perspective Taking a different approach, let’s look at the key opportunities mobile offers retail and see if we can extrapolate an opportunity for operators and/or service providers from them. Location based services; one of the key marketing tools associated with mobile in the retail environment has seen a lot of column space but not a lot of best practice examples. In the US, we’ve seen thousands of apps and campaigns launch. From within those, Shopkick is probably the best example of a location-based offering at the minute, but even this doesn’t actually deliver the full potential of a location-based service. In-store accessibility to additional data is another key example of how mobile is seen to help retail. It creates an experience and allows the consumer to take back more control – they can search for additional information, compare products or even arrange for delivery of an item they’ve seen in-store (this works particularly well when it comes to white goods and other household items that can’t be easily placed in your average car!) but it can also work well in the mobile space where there is a significant research and comparison phase before a purchase decision is reached. Putting items into the consumers own environment further assists in the decision cycle – technologies like augmented reality (AR) are increasingly being used to show

In addition to social and communicative activities, perceived gaps in customer experience will become that much more apparent to users, posing a huge challenge —and opportunity—for service providers consumers how items will look in their own home. This works particularly well for flat pack furniture and items that require construction, but can also work for numerous other products.

Customer service The key for service providers is still the same: strong customer service. As consumers rely on their devices for more and more commerce-related activities, in addition to social and communicative activities, perceived gaps in customer experience will become that much more apparent to users, posing a huge challenge—and opportunity—for service providers. Mobile in the retail environment is and will evolve further to be a driver for consumer satisfaction and enterprise revenue growth for operators and SPs. However, this will only work if consumers are treated with the increased respect they want. Consumers want an increased level of respect and an even greater level of choice. Those operators and service provides that deliver on these expectations will definitely be on the front foot as the opportunity comes to fruition. telemedia issue 32

music

Calling the What’s next for Music was going to be the key content service for mobile operators – but Apple changed all that. So where is mobile music at these days and what are the opportunities? Oisin Lunny, Senior Market Development Manager at OpenMarket, chaired a panel of mobile music industry experts to find out – first at the Heroes Of The Mobile Fringe festival in Barcelona during Mobile World Congress 2013, and then in various locations in London. Here’s what he got them singing

he music industry has been transformed to near total integration with digital technology. Retailers such as HMV have fallen by the wayside, and smartphones have made the portable MP3 player all but extinct. Today’s super connected music fan expects all content in all places with a variety of discovery, purchase and sharing tools in the palm of their hand. Fred Bolza, VP of Strategy & Innovation at Sony Music Entertainment gives us his perspective on the changing industry. “The relationship between the artist and the audience is sacrosanct, people who want to help bridge this gap have to add value but no one has an automatic right to be there simply because of history.” Bolza is also clear about how this impacts on the role of major record labels in the new digital ecosystem “If we remain focused on making product as our sole offering then our days may well be numbered, however as creative content partners who can help make (and perhaps just as crucially fund) meaningful and sustainable connections with fans then we have a value and that’s where our future lies”. Jessie Scoullar, a Director at D2C music partners Wicksteed Works explains what’s happening with consumer behaviour: “Over the past couple of years we are seeing a huge rise in access to our clients’ websites from mobile devices, so much that it’s actually driving a new strategy for us. We now develop for mobile first across the board.” Although consumer behaviour is increasingly mobile first, MNOs and handset companies are playing catch up. Kim De Ruiter, the Head of Mobile Marketing at Cheil Worldwide, explains: “For MNOs and device manufactures it’s predominantly about music being a tool for brand engagement, and not about building the best possible digital music retail store it can be. The graveyard is littered with failed attempts at mobile music stores.” Mobibase is a global VOD and streaming TV publisher

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that also offers localised music portals. Their CEO, Vincent Roger, elaborates on why MNOs need to work with the right partners: “We have been working with mobile operators for years and it’s just not their job to be good or successful in music, they need to work across games, videos, everything. Music depends so much on the culture, the context, and the territory. The majors are expensive, even impossible to work with. All this together makes the ecosystem difficult to grow. It is better for carriers to work with the right mobile service provider.” Alyssa Tisne is the VP of Strategic Partnerships at 7digital, a B2B company whose apps will be preloaded onto 100m smartphones in 2013 including the “Music Hub” on the Samsung Galaxy S4. “We have to be flexible in offering API’s, apps and white label options to carriers and handset companies because there is no one right model in terms of what consumers want.” 7digital have in fact seen a “tenfold increase” in the number of tracks streamed using its API during 2012, and are predicting hundreds of millions of streams this year. She continues: “There aren’t that many successes to point to in the market, aside from Muve in the US. One of the ways they succeeded was on the training front, telling consumers what they were going to get while they were still in store. It’s not just putting it out there, it comes down to the communication.” It is clear that a thriving mobile music ecosystem depends on specialists such as 7digital. However, app innovators such as Playmytone and Soniqplay are looking to bring additional levels of interactivity to the mobile music experience. Playmytone extracts key music phrases and allows applications like mashups and mood based programming. Ohad Sheffer their CEO explains why: “Unless you can provide a powerful and compelling experience, no one is going to pay for your service. We think in order to really sell music you have to take it to a new level in terms of user

hemobile tune music? interaction with the content. Our mission statement is to build apps that allow people to express themselves through their favourite music.” Martin Macmillan, the CEO of Soniqplay adds a broader marketing perspective: “If you look at brands connecting with consumers, most use music as a passion point. Traditionally everything they have done in the space has been quite reactive and passive, such as giving away a free download. It’s around the music rather then about the music. Now mobile adds a radically new dimension, you effectively have a content creation device in everyone’s pocket, so brands can offer creation experiences”. Soniqplay offer branded apps for the likes of Kiss FM, which can create remixes to be shared and sold in a UK chart eligible format. Red Bull has not only been extending their brand with their excellent RBMA radio offering, but recently launched a marketing incubator for music startups, mobile in particular. “The evolution of smartphones has had a huge impact on music. It’s now an integral part of pop culture itself,” says Davide Bortot Red Bull Music Academy, and panellist for Red Bull Amplifier. “People use their phones to stream our live events on Red Bull Music Academy Radio, connect with their peers, and share their images and latest discoveries with their communities. We launched Red Bull Amplifier to support the next wave of tech innovation – and apps and other

music

mobile products are sure to play a massive role in this.” A frictionless upsell experience and an easy mobile payment experience are of paramount importance. My company OpenMarket has been responsible for the rollout of a well known global music streaming service for UK networks Three and Virgin. By connecting the MNOs billing APIs with our own bespoke subscription logic, mobile users are enabled to subscribe to this service and pay directly from their phone bill in seconds. This ease of use and immediacy is nothing less than today’s consumer demands. Coming back to Tisne’s point, many end users simply don’t know what they have access to, so some form of mobile engagement outreach is essential for activation and retention. Push notifications have been found to increase app engagement by 50%, and retention by up to 80%. Meanwhile SMS is a simple yet highly effective acquisition mechanic, and is increasingly seen as a premium marketing and communication channel. So, what’s next for mobile music? For Vincent it is all about streaming services, and about frictionless upselling “from a free experience on the web to a paid experience on mobile devices.” Kim predicts it is “absolutely about increased levels of personalisation, to provide us really with what we want, when we want it. The mobile handset is essentially no longer a phone; it’s a portable computer. If it is going to do everything in your home from programming your TV to controlling your fridge, it will understand all your content interactions and transactions, from Netflix to Google to your supermarket. I think we are going to see that data being used more intelligently.” Tisne concludes, “The digital transition is pretty much complete, its now time for improvement.” With so many innovative specialists in the market, these improvements can only be good news for music lovers, for mobile companies and for the future of music… see you in the front row!

telemedia issue 32

social media

Jack

of all

trades Social media is becoming the bedrock of how brands communicate with consumers, but it is also starting to become a platform for all sorts of services. Paul Skeldon takes a look at how social media is worming its way into the very fabric of how telemedia businesses operate

ime was that social media was all about people just wittering about the minutae of what they had for dinner or that they were going to the toilet. Then it became a platform for brands to ‘reach out’ to their customers. But now it has morphed further into being a platform for running all sorts of services – almost like a new

telemedia issue 32

telecoms network that sits over, well, the telecoms network. Personally, I think that it has removed all the ‘punk’ fun of why social media started in the first place, but the injection of big business into social media has thrown up some great opportunities for telemedia companies across a spectrum of verticals. So what’s happening out there in social media land in three key areas: marketing, telecoms and gambling?

Marketing Where social media has perhaps had its biggest hit is in marketing and advertising. With brands ‘reaching out’ and ‘engaging’ with consumers left, right and centre, social media appears to hold the key to the brave new world of marketing (rather than inaugurating the same old world of advertising, just on a different medium… just saying). Facebook, since becoming publically listed, has sought to monetise what it does and that means exploiting advertising. While this has had limited initial success, the company is confident that redesigning its newsfeed – mirroring what success it has had on mobile – is going to make advertising ‘clearer’. In January, Facebook revealed its mobile ad sales had more than doubled on the previous quarter to total $306m, to account for 23% of the Social network’s overall ad revenues. Andreas Pouros, COO at London-based digital marketing agency, Greenlight commented then that the challenge Facebook faced was in how it could increase monetisable engagement between users and advertisers whilst maintaining quality in terms of both targeting and also user experience. “Facebook has taken the success of advertising in peoples’ newsfeeds on mobile and based its News Feed redesign on mirroring that format (or close to it) on all devices - this should boost revenue,” he says. Pouros also noted back in January that Graph Search, Facebook’s smart search engine which it had just launched, was capable of doing this at the local business level, but pointed out that getting increasingly more from the big brands was the big challenge. But according to Pouros, while Facebook’s latest move is shrewd in that it is has redesigned the News Feed to mirror that on mobile where it has proved successful from an advertising perspective, the conflict between user experience and driving more ad dollars looms large. “In the last earnings call Zuckerberg stated Facebook had not seen any evidence that the increased advertising it introduced at that stage had had a negative impact on people,” says Pouros. “The challenge now is to ‘reinvent’ advertising so people don’t feel they are being bombarded by ads. Facebook is now championing ‘high quality advertising’ in an attempt to do that.” However, research from Greenlight also indicates that Facebook may need to pace itself a little less aggressively when it comes to cashing in on its advertising sweet spot. Findings from the agency’s “Search & Social Survey (20122013)”*, suggest 15% of users would pay Facebook to see no ads at all (which may of course be an opportunity in of itself), whilst close to 70% say they ‘never’ or ‘rarely’ click on advertisements or sponsored listings in Facebook, so this apathy is very real. Pouros concludes: “Notwithstanding, a small minority of users think that Facebook has gone far enough with ads already

social media they wish to connect FooTalk with Facebook. Facebook contacts are listed in a separate tab of the FooTalk address book, which clearly identifies which Facebook friends also have FooTalk and are available for calling. Clicking on a contact allows users to call their Facebook friend for free, providing the option to invite them to the service if they are not already a FooTalker. When a Facebook friend is not available for a free call, the FooTalk user can simply leave a message on their wall. Telecoms “With Facebook now conWhile marketing has grabbed the throat of many brands, social necting over 680 million media networks are also now looking likely likely targets for mobile users, we want to telecoms services – particuarly as more and more people are offer people the chance to getting interested in OTT (Over the top) services. Ahead of Facebook announcing its new look news feed (see take this connection over and above simply sharing status above), the rumour mill – wrongly has it turned out – was agog that Facebook was poised to launch voice calling services. updates and images,” comIt is trialling that in Canada, but has so far not rolled it out. But mented Graeme Hutchinson, co-founder of FooTalk. “We that isn’t stopping others from doing so. believe this is the next step A prime example is FooTalk, a free and low cost smartphone calling app, which has launched the world’s first global in how we will use social media to communicate and Facebook calling service. In an upgrade to its existing app, FooTalk users can now sync with their Facebook profile allow- have made this functionality as simple and easy to use as ing them to call friends and contacts for free anywhere in the possible, ensuring that even world. the least technical Facebook The updated FooTalk service is available to users on a users can connect with each choice of either iOS or Android devices. The easy to use app other on a call as well as in seamlessly syncs contacts, by asking the user the first time the usual way.” they open the app after an upgrade or installation, whether (using tools like Facebook Purity to strip them out entirely). Only time will tell if Facebook has. And if it has not, when is it too much? The conflict between user experience and driving more ad dollars looms large. It did with AltaVista historically, who were then unseated in the search engine wars with a new upstart (Google), with a cleaner interface and better user experience.”

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telemedia issue 32

social media Sport & Gambling

bet-work’, which will take on the bookies and change the way sports fans bet on their favourite teams. It would be rude not to start Bets of Mates (www.betsofmates.com) enables friends to with gambling – and sport – join for free and have a flutter against each other in a fantasy what with the mGaming and football-style league setting. However, unlike a traditional mSport summits taking place bookmakers, there is always a winner. in London on 24 April (see The concept behind the site is that for every stake, each pages 21-29 of this issue), participant receives 100 points which they can distribute on but social media is starting to different bets, with a win, lose or draw prediction. The player revolutionise how consumers with the highest score in the league ultimately wins the game. interact with all kinds of con- However, there is always a winner, even if the prediction was tent, chief among them things not exactly right, as well as cash dished out to runners up. that are inherently social such Bets of Mates is also equipped with social network-style as sport. And a natural exten- message boards and alerts, making for an engaging, competision to this is sports betting. tive environment between friends. The site will initially focus Atlas Premium Brands on domestic football leagues, but will quickly expand to other (APB) has been running sports including darts, cricket and rugby. SportsLocker, an app that McGurk, explains: “Like all good ideas, Bets of Mates was commercialises sports content conceived over a few beers and the football on a Saturday via mobile. Earlier this year, the company bought social sports afternoon. My business partners and I had been talking for media company TweetSport. Together, these two services offer some time about how there was a need for a betting service a fully mobile-social integration of sports information. that combined the banter and competitiveness of friends, The natural extension of this is to look at how social media, along with a guaranteed prize fund - unlike an accumulator which inherently connects people, can be used to help develop bet where one wrong result can mean no winnings. sports betting services. “Since launch we’ve had phenomenal interest with strong As mentioned elsewhere in this issue, professional footweek-on-week signups. I see that this is down to Bets of baller Dave McGurk, a defender with York City, is hoping to Mates challenging the status quo when it comes to sports betscore with his latest business venture, a unique new ‘social ting, and offering something refreshing and new.”

Narrative underpins all technology marketing decisions. Effective strategy is never based on products alone.

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telemedia issue 32

Epayments processing suffer none of these issues simply because of the quality and quantity of direct acquiring banks connected to our gateway. Epayments Processing are therefore not burdened by the constraints of the type of risk factor of merchant we can acquire for, nor volume, nor issuance of MIDs For an informal discussion about how Epayments Processing can assist you with merchant payment solutions, please contact Andrew Darling: andrew.darling@epaymentsprocessing.co.uk Tel +44 7968 166 407

www.westpiermedia.com www.epaymentsprocessing.co.uk

28/03/2013 5:12PM

SUPPLIER DIRECTORY

Best UK Outpayments… Largest Range of Number Price Points from 0.5p to £1.53 Choice of 09, 08, 07 numbers Numbers accessible from abroad Local geographic numbers for virtually every part of UK Per minute and per call rated numbers Build numbers instantly and see real time traffic online

Cheers

Your future is our technology

Specialist of Premium Rate Calls in Sweden, Norway & Finland www.viatel.se sales@viatel.se +46 8 50 60 10 00

Check out our rates, visit : www.cheers.co.uk/uknumbers4u Tel: 0844 489 6446 I Email: info@cheers.co.uk

txtNation

International Premiums is a worldwide telecom media services Provider and Aggregator. International Premiums has acquired the sole distribution rights for Sierra Leone, Somalia, and Guinea offering the HIGHEST Payouts with monthly, biweekly, weekly and DAILY payments.

txtNation is an Award-Winning Mobile Aggregator and Tier-One provider of Mobile Billing and Mobile Messaging. From Premium SMS, Bulk SMS, Short-Code services to Direct Billing, we have it all. txtNation provide a range of mobile solutions to businesses worldwide that include Mobile Billing, Messaging, Campaigns and Content.

e: info@interprems.com w: www.interprems.com

Contact: Web www.txtnation.com E-Mail: sales@txtnation.com Tel: London, UK: +44 (0)203 283 8828 | HQ: +44 (0)1752 484 333

Felix Telecom IPRN, Audiotex, Premium Rate, SMS Solutions Felix Telecom is expanding. If you’d like to enjoy the benefits of working with a team of experts that have been leading the way in audiotext since 1994 - get in touch. Contact sales@felixtelecom.com www.felixtelecom.com Building quality business relationships since 1994

Orca Digital is the UK's leading provider of interactive platforms for mobile, web and TV. Voice short-codes: UK's largest supplier of 5-digit numbers, from free to £2/min. VoiPay: Add web telephony to your voice services, billed via credit card. Live video chat: Across web, mobile and TV - our clients generate £millions. Participation TV: We power interactive services for 40+ UK TV stations. ShowCaster: Broadcast live web TV shows. Professionally. Socially.

orcadigital.com // hello@orcadigital.com // 020 8819 5710 // @orcadigital

Contact Will Douglas 0333 332 0133 will.douglas@xonadu.com www.xonadu.com

White label text chat providers with a difference. With so many real girls and guys in our database we offer genuine premium rate sms contact and dating. Using our peer to peer platform real users actually flirt and date by text. Dating, Adult Chat or Psychic - white label it with xonadu.

VOICEBLADE VoiceBlade is a high availability hosted telecommunications platform. It combines the capabilities of a switch, an IVR and a billing system and makes all these elements acessible via an easy to use web interface.

Visit www.voiceblade.com for more details or contact us on +44(0)800 031 9141

telemedia issue 32

SUPPLIER DIRECTORY

Atlas Interactive provides you with a unique international portfolio of Web, SMS and voice billing solutions. Atlas Group global presence allows you to monetize your content and internationalize your business all over the world

Billing solutions and media applications in +85 countries: ✓ Web Billing ✓ PSMS ✓ PRS and IPRS ✓ Full payment Platform ✓ IVR Platform ✓ Service numbers ✓ Media Consulting Please contact our sales team phone: +49 (0)40 41 33 00-185 email: sales@atlasinteractivegroup.de website: www.atlasinteractivegroup.de

sundial telecom

engaging telemedia services since 1996

+ 44 1223 200 000

IP Communications, Europe’s vast leading premium rate carrier, offers a broad portfolio of value added, competitively priced service number solutions to assist service providers in reaching their goals around the globe. We offer innovative solutions coupled with world-class expertise. With IP Communications, customers receive a comprehensive portfolio of voice services. With specialised pricing, support options and financial services and a dedicated team of specialists focussed on customers requirements, IP Communications provides the relationship customers need today for the business they want tomorrow

sales@sundialtele.com sundialtele.com/telemedia

Untere Donaulände 21 – 25, 4020 Linz, Austria Tel: +43 732 24 11 24, E-Mail: office@ahooly.com

* voice & text chat platform & fulfilment * virtual chat for the Irish market * WEB & WAP instant messaging platform * iPhone and iPad app development * menu driven customer service numbers for regulatory compliance

AHOOLY - IP COMMUNICATIONS

TRODAT TELECOM

Your Direct Source for the Industry’s Most Reliable International Premium Rate Numbers

Services in Arabic, Hindi & Dozens of Languages.

High Rates with Fast Reliable Payments www.trodat.com

info@trodat.com

ENARPEE SERVICES LIMITED

SILVERSTREET BV

Compliance Issues taking up too much time? Operating in UK, Ireland, Europe, USA, Africa, LA, Asia? Don’t Understand what Your Company is required to do? Enarpee Services provides Compliance, Regulatory, Legal and Business Support across the Globe, covering Telecommunications, Broadcast and Gaming Sectors. With 50+ years combined experience & knowledge and a client base that ranges from small start-ups to large corporates, we deal with everything from Contracts, Due Diligence, Product & Service Audits and Review through to complex legal and Breach cases.

Silverstreet is a specialist in Mobile Messaging (SMS), Fax Broadcast, Mobile payments and actively invests in start-up .com companies. Silverstreet has offices in The Netherlands, London, Australia, Africa and Malaysia and our group of companies has a global footprint with over 100 employees and 100m EURO in consolidated revenues. Silverstreet has become an incubator of early stage internet companies and expects several of these seed investments in Social, Digital Marketing and Mobile Payments to help support the company’s aggressive growth over the coming decade.

For more information contact Neil or Paul on +44(0)844 357 3938 or visit us at enarpee.com or email for further information – info@enarpee.com

Contact: Eric Dadoun E: eric@silverstreet.com W: www.silverstreet.com Skype: vceric

telemedia issue 32

SUPPLIER DIRECTORY Mobile Messaging Direct Billing IVR Video Shortcodes Location-Based & Mobile Crediting Services

OX YGEN

Global Provider of Integrated Mobile Solutions

GROUP

Oxygen8 is at the forefront of interactive communications, offering global reach with local service to all clients including: • Global PSMS & PRS services • Mobile Marketing & Messaging • Direct Billing/Payforit

Text sales to 88600 in the UK. STD operator charges apply. Tel: 0845 666 7778 (Int: +44 20 8987 8855) Fax: 020 3095 5080 (Int: +44 20 3095 5080) www.openmarket.com/europe

• IVR, Call Handling & Voice Broadcasting • HLR Lookup and MSISDN Capture We can help you integrate new revenue streams, improve business efficiency and increase customer loyalty. Find out what Oxygen8 can do for you – call 0808 208 0808, email info@oxygen8.com or visit www.oxygen8.com

oxygen8-90mm_48mm.indd 1

C o m p l e t e Te l e c o m m u n i c a t i o n S o l u t i o n s

IMImobile is an industry leading mobile service provider. In the UK IMImobile manages over 40 million text messages every month. With direct network connections to all UK network operators as well as various international messaging routes (such as Africa and India) IMImobile is the ideal partner for mobile messaging and mobile payment (via Payforit, Premium SMS or Credit Card).

Phone: +44 (0)1494 750 586 Email: tom.broadfoot@imimobile.com

01/02 03 070 0800 0843/44 0845 0870 0871 09 Millions of UK numbers available at www.telecom2.net We also provide: - International SMS - Hosted/Deployed PBX - Developed solutions tailored to your needs! Fi n d u s at 2 9 t h Fl o o r, 1 Ca n a d a S q u a re, Ca n a r y Wh a r f, Lo n d o n i n fo @ te l e co m 2 . n e t | + 4 4 ( 0 ) 2 0 7 0 5 8 1 0 0 0 | w w w. te l e co m 2 . n e t

CORE TELECOM

INTERNATIONAL PAYOUT NUMBERS

Core Telecom is an independent network operator which provides a full range of 07, 08 and 09 numbers, coupled with ultra-reliable outpayments and industry-leading call management solutions which are specifically designed for large businesses, resellers and service providers.

Kwak is one of the leading providers for international payout numbers and domestic premium rate numbers, we offer ■ Extensive portfolio of international payout numbers with worldwide access ■ Domestic premium rate numbers from over 25 countries worldwide ■ New interactive neutral client area with the ability to generate sub-customers

Contact: t: 0844 504 0010, e: marketing@coretelecom.co.uk www.coretelecom.co.uk

02/04/2013 13:59

MASVOZ

PREMIUM O

Your leading Spanish telecommunications network operator, focused on business communications for companies.

Premium O is a specialist B2B telecom solutions provider & network operator within the interactive communications industry. We offer a range of solutions such as Premium Rate and Mobile Numbers , IVR Solutions, SMS, Call Management and all ranges of Non-Geographic Numbers. Premium O has proven to be a significant source of new revenue, improved efficiency and enhanced customer retention for many of its clients.

  Voice services   Micropayments   SMS services Contact: José González-Gómez · pepe.gonzalez@masvoz.es +34931220713 · www.masvoz.es

Tel: 0800 849 8877 Email: info@premiumO.co.uk Web: www.premiumo.co.uk

TALKTALK BUSINESS TalkTalk Business provides communications solutions including Hosted Voice and Call Handling and Data Connectivity, to over 400,000 businesses and public sector customers, and work with over 350 wholesale partners. With over 16 years’ experience in serving the needs of business customers, our dedicated team can provide you with solutions to suit you.

Visit us at www.talktalkbusiness.co.uk/partners Call us on 0800 954 0764 Email us at getintouch@talktalkbusiness.co.uk

telemedia issue 32

PEOPLE Three’s Maguire joins ImpulsePay Rory Maguire, the former head of payment services for the mobile network Three, and one of the founders of the Payforit Scheme, has joined ImpulsePay as a parttime consultant. Rory will help ImpulsePay increase the usage of Payforit across small merchants, individuals and innovative enterprises. Much of the UK mobile payments industry is stagnating, but ImpulsePay’s figures show that Payforit offers an exciting, profitable and easy-to-use mobile billing alternative. “Currently the wider mobile payments industry in the UK has stalled due to too much complexity and the absence of a common approach to collecting payments from mobile consumers,” says Chris Newell, CEO of ImpulsePay. “Most of the UK’s digital merchants now want to offer a mobile option for their customers, but are often confused by the complex state of the market and by the highly complicated process required to set up many of the current payment services. Yet our figures show that mobile billing can be a huge success for merchants.” Rory is also set to become a regular contributor to Telemedia’s monthly electronic newsletter from April. Adam Maxted bags m-retail role at Velti Adam Maxted is joining Velti this month as VP Sales, heading up the verticals for Retail, Brands and Gaming as Velti commits to bringing in experienced people from these sectors to market a wide range of relevant, innovative mobile marketing and advertising solutions. “Western Europe represents a key market for Velti in terms of existing clients we serve as well as opportunities for growth. We are delighted that Adam’s joining Velti, with an outstanding track record in the industry, he will be a key member of our senior commercial team,” says Barry Houlihan, General Manager, Western Europe, Velti. Tim Duncalf joins Telecom2 as sales director Tim Duncalf is set to join Telecom2 in May as the

telemedia issue 32

company’s new Sales Director. Tim, who joins from Oxygen8, brings with him a wealth of experience in the telecoms arena and will help Telecom2 solidify its national and international position. “With Tim’s involvement, we can bring a new level to our young and dynamic organization,” says Rob Johnson, Chairman of Telecom 2. “He has always been a pleasure to work with and he certainly has the requisite skills for this position.” Fremantle Media appoints Keith Hindle as head of digital and brand FremantleMedia, one of the largest creators, producers and distributors of TV brands in the world, has appointed Keith Hindle as CEO of its newly created Digital & Branded Entertainment division. Based in New York, Hindle will craft and lead the digital and branded entertainment strategy for FremantleMedia around the world, reporting to FremantleMedia CEO Cecile Frot-Coutaz and sitting on the company’s Operating Board. Ex Betfair head Cunningham launches real money mobile poker Gerard Cunningham, founder and CEO of Koolbit (and former President Betfair USA) has announced that Koolbit, the San Francisco-based Virtual Currency Mobile Casino Network, has expanded into real money wagering by launching iGoSlots.com, the largest, real money, mobile casino in the UK. Koolbit’s partnership with Cozy Games Management Limited, the leading specialist provider of online, mobile and social gaming technology, has enabled it to rapidly enter the highly competitive, real money, iGaming market with the largest mobile casino in the UK. www.iGoSlots.com will launch with 25 of Cozy’s games including slot machines, scratchcards, roulette, blackjack, video poker and bingo.

Telemedia magazine is part of a stable of media products covering the value chain for media and content companies, to third party service developers and providers to network operators and billing companies. Our products comprise: Telemedia-news.com an online news source, updated as the news happens and the home page for all we do

Telemedia Week a weekly email news digest of the news from the week served with an incisive and witty comment on key events

Telemedia360 a monthly fully interactive PDF newsletter featuring comment and analysis behind the headlines and backed up with full web linkage and, new for 2010, video interviews

TelemediaTV our dedicated YouTube channel featuring news interviews, background interviews, conference coverage, demos and all sorts of video material to embellish what we do through traditional media channels

Telemedia360 Blogspot our regularly updated thoughts on what is happening in the fixed line, mobile and web worlds Telemedia Magazine our bi-annual gazette of in-depth industry analysis and comment, industry survey data and research

World Telemedia Events we also put on conferences and expositions all over the world

Felix Telecom IPRN, Audiotex, Premium Rate, SMS Solutions

Felix Telecom is expanding. If youâ&#x20AC;&#x2122;d like to enjoy the benefits of working with a team of experts that have been leading the way in audiotext since 1994 - get in touch.

Contact sales@felixtelecom.com www.felixtelecom.com ME

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Building quality business relationships since 1994