Mobile Entertainment Market 2010 – Apps, Mobile Media Business Models, Growth Markets, M Commerce : Part 2

Continuing the part one of the updates on Mobile Entertainment Market 2010, here are the next set of panel discussions.

Apps: Planning for Success in the Apps World

This session was moderated by Dominic Pride the Managing Director of The Sound Horizon. The participants of the debate were:

James Parton, Head of O2 Litmus, O2 UK
Kunal Gupta, CEO, Polar Mobile

Patrick Mork, Vice President, Marketing, Getjar
Andrew Fisher, Chief Executive Officer, Shazam

The key takeaways of the panel discussion are:
1) Getjar has joined the one billion dollar club and has more than a billion downloads now
2) Shazam’s mobile music discover service identifies over one billion songs and has 75 million users now
3) Lee Epting responsible for Vodafone global content services says that an important topic is a discovery with around 40-50 app stores competing now for customer attention, all in a 4-inch screen. Vodafone is now engaged with every OEM and believes in coexistence. Lee believes that an enclosed system like Apple is not really a negotiated topic. For app stores, Lee says “You need good strong recommendation engine in the app store world. You should have a strong promotional program for the content provider and should look at criteria such as demographics of the customer and combine that with purchase behavior for strong recommendation capability. With recommendations, you see as much as 4 times more purchase behavior. Then you should back it with strong promotions.”

Question to Lee on Vodafone 360? How do you play with handsets and OS

4) 360 is quite different as you have a single instance platform for all of the content as well as the new apps

Andrew Fisher (CEO Shazam):

5) Discovery is the most important in 2 ways:
a. Halfway through once, you have got them there
b. Once they are there than in-store marketing for purchase. Retail-centric
6) Adsense model is the best model for apps. Allow developers for bid. Then they should run multiple campaigns
7) Personalization: so that every time an app is uploaded the consumer gets a personalized page. Developers and brands can then be promoted.

Patrick (VP Marketing Getjar):

8) (Do)Promotions for developers and brands through twitter and facebook. Get them to GetJar from there. They hit the page and that helps developers to promote.
9) Experience should be beyond the download and it should be engagement. How do you build engagement? In the publishing space, updating content can bring engagement- Daily, Weekly, Month, for some of the popular titles
10) Personalize the experience. Include stocks that user browses. Sport: Hockey teams refreshing the content and personalize. Apps have a Churn rate: shelf life of 14 to 21 days before they get deleted. How do you increase that
11) Customer acquisition: Spoke about Virtual credits that can be used for more downloads and which can be offered at the time of registration

Andrew Fisher: Shazam

12) Shazam apps have a big audience. You have to understand what who they are and what they do. So that you can segment. From ala carte to subscription-based to bundling and. All you can eat models which can be very broad but for the customers are willing to pay. Then you can decide how to share (between different players)
Some discussion on app city: all apps for all mobiles

13) The other key area that was discussed was in application micropayments. In application, micropayments have to begin which will allow companies to build the smarter application. Give them better information so that they can improve
Getjar Patrick:
14) In app store business, If you don’t have scale today then good luck. Already consolidation in this space. Getjar value prop is significantly different. Have 3 dozen deals were nxml feed to send content.
15) Viral marketing works well. 70% of the guys who come are recommended by someone.
Andrew Fisher: Shazam
Question? Which Platform.
16) Do you want to be a part of the iPhone 75 million devices, 200000 competitor, or a billion apps with 1.6 million visitors a day? The question is how much competition do you have? It’s not just about building the app. The prices are huge but you got to start. Look at the stats and then plan your strategy. Plan for success
Billing Pricing
17) Pricing strategies for GTM:
a. Free app
b. Paid app
c. Ask the customer to choose. 30% drop off from free to paid.
Getjar Patrick:
18) Free apps make money. 20% and more in the US is prepaid users. The fact is that many consumers won’t pay for content. You do have people that would pay for the content. A number of cases shazam, flirotmatic, nimbuzz virtual credit.
19) The best model is Freemium and then upsell content
20) In terms of content- Premium content will have a role. Apple shows that with the right system you can monetize premium content
Lee Vodafone:
21) Vodafone objective is to offer Tariff plans to have the best content propositions. Vodafone has to bring a differentiated offering. Really don’t have to care about other aspects. Then there’s the question of revenue share: 70:30, 80:20. Vodafone then leaves it to the likes of Andrew in Shazam

Other topics:
22) Should have an Advertising API and an Ad network that is suitable for that to allow you to do Freemium models
23) Brands and agencies are getting to grips with what iPhone represents now. How do I go beyond the iPhone?
24) Portal has to give way to the retail store. Deportalization of mobile internet and Appification of the mobile portals
Future hope:
25) DRM free world for apps
26) WAC
27) Get into 70:30 rev share model and premium placement and give the developer real value

The next session was

Enabling Services: Capitalizing on the Next Generation of Mobile Media Business Models

The participants were
Eden Zoller, Principal Analyst, Consumer Practice, Ovum
Tanya Field, Director, Mobile Data Group, Red Telefónica S.A.
Ray de Silva, Head of Enabler Commercial Partnerships, Vodafone
Jon Billings, Head of Technology for Mobile, BBC
Andrew Budd: mBlox

Jerry BBC
Key enablers for next-generation business models:

1) Location awareness. Future props on news weather, just to the regions where we are entitled to provide content. We cant broadcast to th US or ESPN cant do it here.
2) Quality of service is another point. Don’t know the actual dynamics of the network. Congestion: Visibility to these conditions and then can provide better services e.g. Networks is too congested. Visibility to choosing different bit rate and coding. We can even decide a different medium: text instead of video.
3) Cost expectation. Largely customers don’t understand billing. Terrified of billing. Offer super transparency to consumers on how they will be billed.
4) Having common technology: Common technology to address scalability. BBC is working with operators on a global level on this aspect

Andrew Budd
5) Delivery quality and cost of delivery
6) Billing
7) Handset gives a context link on where they are
8) Talks on single standards for APIs with all the operators.

9) On single API: not possible to have APIs for every regions and markets requirements
10) Web services APIs are going to be widely used
11) Fragmentation will exist. Needs to be done on a more holistic basis as Network operators are not the only players

Sender pays model, and GSM one API discussed

Telefonica Tanya:
Issues with future models:
12) Consumer Education
13) Mind share problem. Developer community is not particularly warm (with the operators). Don’t want to compete with future APIs on Google.
14) Operators missed the opportunity with the location, but there are others available with not necessarily 70:30.

Security issue discussion:
15) Vodafone Ray: Don’t over cook on the security on the APIs. There are 100 million people on facebook that are willing to share every piece of information. Though this is important.

There was a session on MEF Business Confidence post this session. You can get the full report from MEF. The discussion after this was on Growth Markets. The topic was:

Spotlight on Growth Markets: How Have Growth Markets Ensured Success?

The session was moderated by Gerrit Jan Konijnenberg, EVP Sales, Comfone. The participants were:
Ron Czerny, Chief Executive Officer, Playphone
Neeraj Roy, Chief Executive Officer, Hungama Mobile
Pavel Roytberg, Director of Product and Service Development, MTS
Evgeny Kosolapov, Chief Executive Officer, United Fun Traders (UFT)
Neslihan Ucar Cadirci, Partner and Services Management, Turkcell

Neslihan Ucar Cadirci, Turkcell

Key facts and ideas:

1) Turkey is a tough market. Very regulated. 2.5 M using 3G services. Data usage has increased. Mobile music and mobile tv are key. TuckeCell is very successful in mobile tv business in foot ball countries. Football is defining success on data usage. Decrease in revenue because of regulatory issues due to Misuse of billing. Now have double opt in. Adopting, good regulatory practices.

Ron Czerny, Chief Executive Officer, Playphone:

2) There is an Ingame virtual goods company for social media in Japan which has 4 billion market cap. (probably DeNA). You have 10-15 very interesting model

3) There is a company in china called 10 cents which has a market cap of around 10B. Operators must support social gaming eco system. Use this eco system like say a sales channel. And then do some kind of revenue share.

Pavel Roytberg, MTS

4) MTS is implementing NFC in Moscow metro. In Russia, WAP is for content and mobile internet for browsing and price difference between the two is huge. Mobile internet is 13 times more expensive. Traffic revenue is shared to for content. Premium internet traffic customer doesn’t pay for content or subscription. Customer allows distribution for content without payment if he is on premium traffic. Now some people cant understand so this model is an experimental model.

Other items
5) Currently, SMS is the billing mechanism but ultimately billing will be more full integrated with some of the services. Security issues around mobile. We are 5 years away from ultimate billing.
6) Neslihan, Turkey: In turkey mobile payment is growing very fast. Tax rate is 48%. Which is killing business. In turckcell, we are not sharing wap. But that is changing.
7) MTS Russia: You have premium sms scratch cards that you can buy anywhere and you can spend them for virtual goods. Facebook have their own billing system. Russian SNS tried to have some payment system for themselves. Biggest amount of money from social network came from premium SMS. In Russia, you have some payment terminals which is like a reverse ATM. Historically this was for mobile payment but now for virtually everything. These have become trusted. Cards became irrelevant in Russia because of reverse ATM machines
8) One of the speakers (Ron) : Smartphone arena in growth market is a long way to go. China Unicom sold only 3 out of 5 million inphones. Android will come with much more open architecture. Will the app store have the same kind of heightened impact in emerging markets. People who bet on the app store are suffering. Its not viable.

Another speaker (Evgeny Kosolapov)

9) China has 800m mobile subscribers and 800 m mobile devices. Half of them came from MTK chip which includes all the functionality of handset. Chinese can make any handset on this chip set. There is a market there.
10) MTS: Gray market for applications and subscribers want to have the full experience on the gray import of those handsets in Russia as well. On one side operator is a trend setter. You have the other side. Those who follow this gray market will increase their possibility of business models around it.
11) Turkcell: Ad funded model. Trying to mobilize the developer community which is closer to Turkcell and try the combination of entertainment. We had applications for the last number of years and hundreds of games.
The next session was mobile commerce. The topics was

M-Commerce: Leveraging the Unique Attributes of the Mobile Device to Drive Customer Acquisition, Retention & Conversion

The participants of the discussion were

Gary Schwartz, President and CEO, Impact Mobile Inc
Mark Britto, Chief Executive Officer, Boku mobile payment services- operator billing.
Peter Garside, Regional Manager, Western & Central Europe, Ericsson
John Orlando, Managing Director, 2 Ergo
Someone from Buongiorno and Orange as well

1) Consumers want to buy content in a simple fashion with Carrier billing in the background.
2) Peter Garside: premium SMS real success because of ease. Easy way to build for mobile content. Content companies can stomach it is convenience fee. And the consumers are prepared to pay for that.
3) Micro billing payments works best with mobile phones.

Boku (Mark Britto) Micro payment
4) Little back ground: Found 10 years ago. Connection with the carrier. Couple of years launched a service wherein you accept the payment on the website with a mobile number. Rapid growth in the first couple of year. Facebook networks and gaming industry adopted. You can access the game for free and then buy premium on the way and thus capitalize on the Impulse purchase. Mobile comes in as you capitalize on the impulse and get back to what you are doing. Gives end users the ability to do carrier billing and ease of use and flexibility over what bank networks offer. Initially, you are putting your mobile number and entering the pin and then you are tied now with your pin billing against that phone. You have a carrier relationship. In the per transaction basis, there is special account for you for other payments against that number. Mobile is different from the web. In mobile in mobile 2 clicks are one two many.
5) Boku has rules and regulations for 62 market places that they operate. It has begun to help new vertical and new merchants on how they can use mobile. One of the key values they bring, is that they enable the mobile operators to issue credit. Quite often work with resellers and then to those other resellers and other with single APIs.
6) Some discussion on Carrier billing: It is only 9 dollars that you can bill and then you limit and so the carriers have to offer credit. (Probably regulation on micro payment)

Premium SMS examples by Peter Garside:

7) Talking about wap billing and premium sms; We are educating the society and verticals on what are the other ways of using the payment
8) Some of the stuff that we have been doing is a voucher for ice creams in Scandinavia. Send the voucher through sms. Buy a bus ticket, train ticket. Billing is premium sms. Other project include one in retail in the UK you could go to a retailer you can check if they have got stock. Loads of new way wherein you are using premium SMS
9) Wap billing is fundamental. What important is the application of technology and education of the market. Payment points are inconsequential. Fulfillment through the device is important. Price payments of 10 quids or below qualify as micro payment- Under 10 dolllar or 10 pounds (regulatory)
10) How do you engage with the consumer at the point of decision. It doesn’t matter what is the cost of the item.
11) Classified advertising on eBay is an example of incremental revenue through mobile as a payment instrument. Similarly for the whole range of vertical markets- Online gaming, ticketing. Vodafone has the pizza hut service. Vodafone has offered new capability wherein you can get incremental revenue from customer position (location).
12) How does it appear on the customer bill?
a. Two models:
i. Reseller model: Selling content is operator responsibility. You are selling and show your sales of the ticket
b. Payment mediation model
i. Your part of revenue share in payment mediation model
13) Content services like rbt go into payment mediation model. These models are valid for all mobile content and all physical goods. There is no split as per vertical.
14) Operator in Europe are going through payment mediation model. Payment mediation charge for RBT is 30% and 7% for a movie ticket. You charge this amount as the convenience charge that you charge for the system.
15) Should the operators become a bank? China mobile bought a bank.
16) Premium SMS with apps: Mobile SDK project. Can embed and do one click payment. Its not really into apps tore. Give the developer new way to monetize.
17) In car devices, have meta data libraries and mobile payments may be an easier

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