Premium SMS Proves The Deal [or No Deal] Of Mobile Content and Payment
by Ewan Spence
Premium SMS messages are one of the first steps towards a mobile phone based payment system, and it’s nice to see that the uptake it the US is matching that in Europe. With Telephia reporting that in the first three months of 2007, US carriers racked up revenue of over $273 million, just from premium SMS, you can be sure that their efforts to market this to third party organisations will continue – grow the market and demand for services using premium SMS, and make more money for little extra effort. Perfect.
So where will the focus be? Well the most profitable messages were for purchases (making up some $215 million of the $273 million); people buying ringtones, ringbacks and content such as regular horoscopes. Content is king, as they say, and while the Web 2.0 entrepreneurs may look at these services as basic, it’s all in the marketing – but if the bulk of subscribers are looking for this, then why not make sure that revenue can be derived?
What’s more interesting is that the largest volume of messages was delivered from electronic voting and ‘sweepstake’ competitions (think of the voting numbers to text on American Idol and you’re there). But the killer is this. Half the revenue and half the volume came from one property, Deal or No Deal. Given the concerns on making sure that this potential Golden Goose is not killed by regulators and in the battlefield of public opinion is going to take a careful balancing act. But if successful, the handful of big hits they have now could be joined by a rapidly growing long tail from the large network quiz shows to, potentially, the local talk-radio stations running a quick survey.
It all counts as the networks look to keep the ARPU numbers strong.
