The “Moolah” Movement – Revenue Flow with Content Based Applications…

1. Content Download Applications:

1.1 The Application

The content based applications are a great revenue source for Indian operators. In India the new applications and services mushrooming at regular intervals have been focused on this type of content. I am trying to highlight a few of the application areas and have tried to collect and club as many related services under this category

I would like to put it simply by saying that selling mobile based content is as simple as A, B and C:

1. Astrology and related services
2. Bollywood Related content
3. Cricket

Astrology and Related Services

For providing the information based services to the end customers like daily horoscope, a continuous inflow of data is required from the content provider. This set of services has seen a good uptake from the subscribers and have had a positive revenue flow for all the involved entities.

For expert services, the VASP or content aggregators own a call centre like set up wherein the dependency on the content provider is eliminated. The reasons I see for that to happen are great ROI and the quality assurance.

Bollywood Related Content

This is entertainment services section that has all the content that is made available to subscribers for download. The biggest revenue generator has been music though other content like wallpapers; mobile themes have also seen a decent uptake.

Cricket

The game India lives for. This is the single religion of the nation. This is the single thread that binds every Indian despite the cultural, regional and language differences. Subscribers were hooked on to their television sets and then came the mobile revolution where they could SMS and get the scores or call up a short code and listen to the updates.

Though all the content is available easily on web but the aggregators/VASPs prefer to rely on the expertise of content providers for this.

1.2 Value Chain Entities

1. Mobile Operator
2. VASP/Platform Owners
3. Content Aggregator
4. Content Owner

1.3 Prevailing Business Model

As per my understanding, currently the following two revenue share agreements exist:

1. Pay per Use Model: Mobile operator charges the customer for accessing the services. Operator in turn makes a payout to VASP and other players based on previously agreed upon revenue share. The VASP or aggregators get a chance to ask for a premium in case of expert services. The voice calls and SMS services are charged at different rates to subscribers and
2. Subscription Model: Subscriber pays out a monthly subscription fees to the operator for receiving daily alerts or tips. This revenue is shared in the same manner as in the above scenario.

1.4 Future possibilities
The future can not be predicted but just discussed. It is just a matter of time when I would realize whether my beliefs would still hold good or are shaken away. I would like to discuss the future possibilities in the content driven business under two separate heads. The content related activities and the business synergies between the various players.

Future of Content:

• Type of Content – The future content would be much more matured in nature. Two important things to be highlighted here are the availability of regional flavoured content and the optimization of content for delivery to mobile handsets. User Generated Content (UGC) would grow leaps and bounds with the advent of Mobile 2.0 and content tagging would be of great importance in the months to come.
• Content Sampling – Subscribers want to hear or see the content before paying for downloading. The sampling requires getting cheaper thereby reducing piracy to some extent. With a lot of importance given to multiple access mechanisms the manner of sampling would also take a new meaning. The advent of 3G would enable the content to be sample on voice and requested to be delivered via mobile web.
• Content Delivery Mechanism – Content would be made available agnostic to the access mechanism being used. The content could be requested from web and delivered to mobile or vice versa. This has already started happening but to a very limited extent.
• Gaming Content - The mobile gaming industry has not yet picked up to a great extent when we compare it to nature of population who believe in sports. The mobile games need to be subsidized and with the advent of mobile advertising the sponsorship of games is not to far away.

Future Business Model Evolutions

1. Subscription Subsidized Pay per Use – Not sure on this being the future as I think someone would have already started offering this to subscribers. The value offering is subscriber to a set of services and access at a low cost. Eg. Subscribe to cricket updates on voice portal and call up at 50% call rates.
2. All you can eat – The bulk model can be looked into with subscription to a particular pack would let you download content to a specific number with no access charges. Eg. Subscribe with INR 100 ring-tone pack and download 10 ring-tones with no IVR browsing charges.
3. Mobile Advertising Supported Model – The content uptake would definitely be triggered with the content being subsidized with the advertising revenue inflow and the advertisers would be more than willing to brand the quality content. So this would bring to light what content is considered quality by the advertisers and lead to innovations on the content side as well. Eg. Car racing game by branded an automobile company would be available at INR 20 rather than INR 50.
4. The Retail Model - This has already started happening as the content owners are trying to gain more out of their content and approaching the customers directly via retail chains. The reason – low revenue share payouts from the operator end.
5. Operators Eliminating Middle-Men – With a lot of movement by the players trying to take up additional responsibilities of other players in the revenue chain, the agenda is clear. They need additional revenue share for the content and services they are providing. This may lead to operators getting into direct relationships with various players at different levels.
   

Jatin Madan
jatinmadan@aol.in