Micro-billing: the key to charging for media content

Good news for telemedia microbilling companies: a recent study by media consultancy Oliver & Ohlbaum Associates has found that consumers are not going to be that willing to pay subscriptions for online news services, preferring instead to pay small amounts for each article they access.

The survey of 2600 consumers in the UK conducted in November as News International prepares to start charging for content, suggests that even a monthly sub of as little as £2 for a single news site will not be popular – especially, if all major news organisations introduce it at once.

Instead, the report’s findings show that micropayments for individual articles would be a much more popular – and workable – option, allowing anyone to look at whatever they want, whenever they want.

“Per article charges allow users to remain promiscuous so would be the best way for the sector to pursue payment from most users, who prefer to mix and match news sources,” the report concludes. “If all newspaper websites charged for access using article charges of 10p, the likely take up doubles compares to a monthly charge of £2.”

The study backs up what many in the telemedia sector have long been lobbying the media for – very vocally at Telemedia360 in Liverpool in October in particular. Some newspapers, such as the Washington Post and the Financial Times have managed to create and sustain a subs model from day one. Others, especially in the mainstream, tabloid market, are unlikely to really benefit from trying to get subscribers on board. Their fortunes lie in these so called promiscuous readers hitting them every now and again.

The model is also one that will, in time, also be applied to UGC services – mainstream and adult – whereby the monetisation lies in microbilling for individual hits, rather than trying to buy people’s loyalty. Sure, there is a loyalty angle to this, but really the monetisation revolves around allowing for users to hit what they like, when and where they like and charging them a small amount to do it.

The trouble is, you need a trusted, effective, one-click payment service to do it with, so that buying anything from anywhere is not a hassle or passwords and usernames, PIN numbers, security codes and so on.

And this is where telemedia comes in. Billing services are flourishing, in a sense, as the scramble to get billing tools in front of consumers grows apace. Payforit3.0 is coming in March, aimed squarely at trying to tap into web billing via mobile, but the real prize is for those out there that have the billing tools that can be easily adapted to microbilling for media and UGC content. We’ve been doing it for years and now Rupert Murdoch et al need you… darn it, the public need you.

In fact its rather essential that telemedia billing does make paying for online content more palatable: I for one think that Rupert Murdoch is fighting a losing battle trying to reign in the web. If someone goes looking for a story and finds it on one of his sites, but has to subscribe to read it, they will go elsewhere. Ideally they will look for a free version, but – and this assumes that the media industry works together on this – will go to the source where they pay the least and in the easiest way. And that brings us right back to microbilling.

As a journalist I want to get paid for writing all this. As a consumers I want it for free (or at the very least for a very, very small charge). With my consumer hat on I will probably forgo some aspects of quality to save money. All the media companies really have is their brand and trust in that brand. That is what they are selling, not the content per se.

I also strongly believe that if you start micro-charging for content on news sites, people will soon arrive at the decision that a subscription could be a better deal for them if they find themselves at the same site all the time. And that is where it gets interesting. But that is some way off, and perhaps by then Murdoch senior and his old school view of the media won’t be with is anymore.

Technology changing too fast? No, we're just tweaking

We all like to think that, being in the technology game, we are in a fast moving, era-defining job. Nothing moves fast then technology, right? And that’s a good thing, yes?

Well, no on both counts. According to Rory Sutherland, Vice-Chairman on Ogilvy Group – who took to the stage at MIG’s Digital Media & Interactive Lunch yesterday in London – technology isn’t really moving that fast: all we are doing is finessing what we already have. The real innovation in any sector tends to take place in the first 10 to 20 years. After that, its just tweaking.

Take the motor car, suggested Sutherland: the technological leap between walking and driving a Model T Ford was huge. The leap between driving a Model T Ford and today’s Mondeo is really not that great. The interface as been improved and the design safer and more refined, but really its basically the same technology.

The digital world is the same. The leap between the invention of radio communications and the mobile (and even the internet) is similarly not that great a leap from no radio to radio.

So where does this leave us on the eve of 2010? Well, while things like the iPhone and the web have really shaken up telemedia this year, they are not really the rapid steps forward that many would have us believe. They are a finessed version of what we already have.

Sutherland was talking to the 120-odd heads of mobile from leading broadcasters, agencies, retailers, e-tailers, operators and media companies that MIG had gathered together about what they should be looking for from the future of mobile. And strangely – and quite refreshingly – his take is that rather than always looking at bleeding edge tech and what it can do, the next decade will be more about finessing what we already have: using technology to make life better rather than inventing stuff and trying to put it to work.

This he dubs “un-vention”: the application of more psychology than technology. In Africa people routinely walk 5 miles each morning to be told there is no work for them today. The mobile phone, even in the poorest countries, is replacing this walk: it makes life better and more productive. We should be applying the same here in the developed world.

Why, asks Sutherland, don’t all goods a serial number and a shortcode on them so that the owner can simple text to re-order? And he doesn’t just mean when you’re running low on milk, but also when you want new socks, trousers, a TV, a microwave, a car…. Everything. Simple and, from a retail perspective, a great boon – customer for life or what?

Sutherland also touched on the big theme of the day: payments. While the telemedia community waits with despondency the arrival of Payforit3.0, thos wanting to sell things are busily looking at all billing tools. Echoing what David Sheridan from MX Telecom told me the other day, people want a wealth of payment options. In Sutherland’s view “at least 20”. Give the retailer and consumer the choice of how to pay for things, even if that means bowing to the zeitgeist: “WAP:, no one pays,” says Sutherland. “Call is ‘app billing’ and everyone pays”.

The Future of TV

Who’d have thought that the appearance on BBC TV’s Question Time of odious Nazi nutter Nick Griffin would have given so many middle aged, middle class technophobes a vision of the future? No I don’t mean that Griffin and his theatre of hate are going to seize power (God forbid), more that it saw usually passive TV viewers reaching for their mobile phones and Twittering and Facebooking away like crazy while the show was on air.

If you are under 30 you will probably think so what, but to me – as I approach middle age – I was astounded by how many people I know who never update their Facebook profiles suddenly appeared and started ranting about Griffin. Then others joined in. Pretty soon – about 10 minutes into the broadcast – there was a huge heated debate between people I know, people I don’t know but who know people I do, and people none of us know about  the programme. All on mobile.

And this is what really made me feel good inside. Suddenly a bunch of people who usually poo-poo the idea that we are all going to be interacting while watching TV were doing it. I have, because of the business I am in, long been a user of my mobile while watching TV. I tweet, I Facebook, I email, I Google stuff, I Shazam tunes that are playing. But most of my non-telemedia friends don’t.

But now they might. Presented with something that they were interested in got the older crowd going and what a riot it was: we were all broadly in agreement over the content of the show, but people raised new and interesting points and even some great jokes. It was a real experience.

But this is the future of what we do. It starts, as Question Time showed, with some social networking banter, but it won’t be long before the augmented reality services we see on mobiles are linked to TV programmes and we suddenly become two screen viewers.

This has huge ramifications for how the media and telemedia industries develop. The services that can be created using what we have today and this buy in from viewers could be huge. The question is how can this be monetised?

Well in the most obvious first instance is to start to look at what can be done around advertising on TV and the device; what can then be done with augmented reality for TV advertising; and then looking at how to perhaps keep those engaged on the second device on the air and spending through value-added services.

As Telemedia360 in Liverpool showed on 21 October, the real key is relevance. Question Time also showed this. The social interaction that that particular show spawned was a result of it being something that engaged a particular demographic with a topic that compelled them to communicate with their peers. And this is the lesson that we all need to learn to drive media interaction forward: make it relevant, make it good and make it cheap – and people will pay.

TELEMEDIA 360 LIVERPOOL Out with old media and in with the new

People across the UK are still consuming more traditional TV, radio and newspapers than new online media, according to KPMG’s first Media and Entertainment Barometer, launched this week, but with the rate of new media growth, this may not remain the case long term once the industry has got to grips with how to monetise new media channels at TELEMEDIA 360 in LIVERPOOL on 21 October.

The Barometer, based on a KPMG commissioned YouGov survey, found that online media is catching up fast – almost half of us (47 per cent) visited social networking or blogging sites in the past month, 37 per cent accessed online news feeds, 29 per cent played games online and 22 per cent downloaded music.

But despite growing online audiences, getting consumers to spend money on online media remains challenging; only 11 per cent of consumers indicated that they currently spend anything on online media. And of those that don’t spend, only 11 per cent thought they might begin subscribing to any online media in the next 12 months.

Mark Challinor, European director of the International News Media Association (INMA), a partner in TELEMEDIA 360 LIVERPOOL agrees: “It is crucial for all media companies to embrace new technologies such as mobile. Many traditional newspapers are now starting to realise that their future rests on the ability to adopt a multi channel strategy that can be nurtured over the next few years in terms of interaction, database and content distribution. They are also realizing that significant new revenue streams can be achieved through an integrated mobile marketing strategy. Telemedia360 is the event where this all comes together.”

Don’t just take our word for it, Telemedia360 in Liverpool on 21 October is the place where leading industry experts will be debating the key issues facing the media and telemedia industries as we look at how to monetise cross-platform services and technology.

“We have to explore the tension between traditional and new media: where do the two collide and where do they compliment one another. Which platform is going to win out: PC, mobile phone or TV? We will be exploring this at Telemedia360 in the new channels session”

Paul Maidment, Business Development Director, BBC Worldwide, chair of ‘NEW CHANNELS: Engaging consumers through Social Networking and UGC’ session at 12.30 on 21 October

“Telemedia360 needs to help the industry explore how much can you make from mobile advertising, how big is the market and what is holding it back at the moment.”

Jon Mew, Head of Mobile, Internet Marketing Board, a panellist in ‘MARKETING: How can you use Telemedia to market what you do’ at 16.45 on 21 October

“One of the main themes in monetising media content is CRM. The key to CRM in the modern world is to make it as easy as possible and mobile does that with its ubiquitous nature, fast & simple interaction mechanism SMS and the freedom to make the interaction spontaneously and where ever you are.”

Lee Bowden, MD of Piri and panelist in DATA & CRM: ‘Getting to know you…’ at 15.45 on 21 October

“I will be showing how different platforms and themes attract new customers. 93% of callers to our Live Psychic service are female. However, the text a Psychic and email a Psychic created a 44% male client base. In addition, we are currently trialing a new counselling service to target customers not into Astrology/Horoscopes and also the male/GLBT market via Sexual Health counselling.”

Kevin Parker, Russellgrant.com and panellist in the ‘NEW REVENUE STREAMS FOR MEDIA: What games, gambling, competitions, chat

and psychic bring’ session at 11.30 on 21 October

“I’ll be keen to discuss two things around Revenue/business models – billing models and revenue models. Billing models are a big issue due to high percentage payouts on slot style games – I’d like to get an update on what the operators are doing for alternatives to credit cards.”

Dawn Cooper, commercial manager, Million-2-1 and panellist in the ‘NEW REVENUE STREAMS FOR MEDIA: What games, gambling, competitions, chat

and psychic bring’ session at 11.30 on 21 October

So how do you do this? At TELEMEDIA 360 in LIVERPOOL on 21 October delegates will learn among other things:

• Where the old media and the new media worlds collide – and where they compliment one another

• How UGC can work with produced content – and what will consumers pay for?

• Which platform will win: PC, mobile, or TV?

• How brands, creatives and platform owners can create real loyalty amongst customers?

• How to build a converged interactive media business – the technical capabilities, consumer demand and channels to market are now aligned to allow for such an opportunity

• How much can you make from mobile advertising, how big is the market
What is holding it back at the moment and what’s been done to grow the market?

• How profiling and CRM data increases value considerably and has created a whole new revenue stream for those who see beyond the usual content driven products

• How m-web needs to be coordinated with the complete multi-channel campaign

• The use of online/mobile Horoscope/Astrology “teaser” content to drive incremental revenues in a declining publisher marketplace and the cross platform use of content

• How gambling-style games can increase revenue: successful marketing channels, placements, brand appeal / endorsement.

TELEMEDIA360 LIVERPOOL Take our interactive survey

As Telemedia360 Liverpool gets underway on 21 October next week, we are looking at taking the temperature of the telemedia value chain around the real demands and benefits of delivering media content cross platform.

Running in conjunction with Bomoko, we are carrying out a live on going survey and we would really like to gauge your views on the industry starting now and charting how views change through the show. The results will be displayed live at the M-web Explained session at 14.30 on 21 October.

So Text MOBI now to 81025 to take part. YOU CAN ALSO TAKE PART AT THE SHOW so we can then see how, thanks to our marvellous seminar programme, your views may have changed.

The day e- and m-commerce became one

Want to see into the future? Well look no further than Amazon. Or rather, it’s billing service. Amazon’s one click payment service – which users register to use online but can then use on the mobile – is starting to gain traction outside of Amazon, with games and apps store Handmark in the US integrating the offering into its services.

It is admittedly a small step for the multi-billion dollar billing industry and I doubt many telemedia executive will be losing sleep over it just yet, but it is significant for a number of reasons.

First up it marks a convergence of m- and e-commerce – something that has been coming since the iPhone launched – and looks significantly like m-commerce is merely an extension of m-commerce: different device, but the same basic site and purchasing tool.

Secondly, the move is a possible indicator as to where the mobile billing space is heading: away from network operators and towards merchants. This would be warmly welcomed by many in the industry as it increases the erosion of the stranglehold network operators have tried to exert over m-commerce since its inception. There are of course issues with PCI DSS compliance and the EU Payment Directive looming (see Telemedia360 September 2009), but a move away from MNO billing would certainly open up more varied price points, better payouts and encourage more merchants to start offering mobile commerce.

Thirdly, the move by Amazon comes at a time when the consumer is crying out for mobile commerce to take off. A study by ATG (Art Technology Group), a provider of e-commerce solutions out this week, finds that as many as 38% of UK consumers have tried to shop online from their mobiles, but 28% of those who have tried it find it a difficult, being especially concerned as to how secure the billing side of things is.

According to the study, more than one in three UK respondents (39%) say they would be more likely to shop using their mobiles if retailers provided secure and easy payment services. Twenty-four per cent think offering mobile-only offers and incentives will encourage adoption. Twenty-two per cent believe retailers should design websites optimised for smaller screens to encourage use.

The move to broaden Amazon’s billing reach can only help with this. It will also more than likely drive other online merchant billing stalwarts like PayPal to really go for it on mobile. It may even see others enter the market. It certainly offers a startling opportunity for some of the telemedia industry’s finest to look at how to make their billing tools much more mainstream and really reap the rewards.

Of course there are still many rivers to cross before the general public embraces m-commerce fully, and these must be addressed alongside the billing.

The ATG study found that, despite the growing popularity of mobile applications, just 15% of UK consumers feel developing specific commerce-related applications would entice them to shop using their mobile. The survey shows use of m-commerce would increase if retailers offered customers more personal optimised experiences to suit changing lifestyles and tastes.

This is something that the whole mobile commerce industry has to address: the whole m-commerce experience needs to change. The billing is a part of that – a significant one, from a security point of view – but just a part nonetheless. How the industry now combines personalization, social networking, status-based contacts books, apps stores and billing with m-commerce will be the next great leap forward for mobile and for telemedia. And something that will be debated at TELEMDIA360 in Liverpool on 21 October. Click here for details.

Tele 'cross the Mersey – T360 Liverpool captures the zeitgeist

Timing is everything. Just as we gear up for Telemedia360 in Liverpool on 21 October – where the media and telemedia industries come together to look at how to monetise cross-platform content and services – a flurry of activity out there in ‘the real world’ has shown that the timing of this show couldn’t really be any better.

Today the Internet Advertising Bureau has announced that, in the UK at least, online advertising has out stripped spend on TV advertising for the first time in the first half of 2009. This marks a momentous shift in the old world order and chimes very nicely with the appearance at T360 of Jon Mew, IAB’s head of mobile, who will be talking delegates through how mobile fits into this model.

At the same time, the Audit Bureau of Circulations (ABC) in the US has also published a study that finds that its US members in the print and online media industries are all desperate to take their brands mobile in a bid to increase revenues, reach, eyeballs and advertising. Again T360 features a raft of publishers that have all turned to mobile in one way or another to boost what they do.

The Financial Times will be on hand to demonstrate how it has used downloadable apps to drive people to pay for subscriptions to its website – the FT being the only publisher to charge for online access from day one, and so they are quite rightly, in the pink – while Future Publishing and Piri will also be there, speaking about how Piri helped Future use mobile to target third party adverts at its readers through mobile.

Bauer Media – the leading UK lifestyle magazine publishers – will also be joining in the debates at T360, with digital director Paul Wright, joining a distinguished panel that also includes leading UK newspaper group Trinity Mirror to look at how the print media has embraced online and mobile channels to expand from being simply a newspaper to being a multimedia set of channels – better serving readers and advertisers alike.

The other interesting development in the past few weeks that again chimes with what T360 is looking to do is explore how micro-billing – in fact all kinds of non-operator billing – are really the key to making media services succeed in their goal of monetising these new channels. The launch this week of Coinz from Charge2 is a case in point.

Debuting at T360 next month, Coinz provides online & digital businesses trading within the new media sector with a viable and effective payment solution to charge the new generation of micro-consumers for content, services or products. Any Coinz spent within the digital arena are able to be redeemed or exchanged by the respective Merchants for monthly revenue out-payments.

A Coinz user is provided with an individual secure account that can be dynamically charged using a variety of standard and widely acceptable payment methods such as credit/debit card, bank transfer, mobile recharge or PRS mechanisms. The Account converts and stores the value of money into Coinz and provides the user with a simple, consistent, secure and anonymous user experience across a multitude of digital businesses.

News and media are being consumed differently today and publishers are struggling with a vast reduction in circulation figures and the conversion of their readers to an online, payment based alternative. With circulation & advertising revenue dramatically falling in the commercial sectors and an increased number of broadcasters offering online catch up TV, the demand for charging micro-payments is being heavily supported within the industry. The boom of “Tube” style websites has also contributed to the trend to micro-consume content and has been extremely detrimental to businesses trying to gain equivalent revenue through pay-as-you-go and subscription based services. Coinz aim is to facilitate the “Billing of the Un-billable” by bridging the revenue gap between the online Premium and Free market sectors, which to date have so far remained elusive or at best difficult to capture.

Similarly, other alternative billing tools are also coming to the fore in the telemedia world, circumventing the old skool PRS and PSMS routes and opting instead for innovative ways to use credit and debit cards, and even cash, through the online and mobile channels.

Core Telecom, for example, will be at T360 exploring the role of its unique per minute credit card billing tools, which offer the ease of PRS, but without having to use PRS. Txttrans will also be on hand to discuss how it uses text in innovative ways to deliver flexible and interesting billing solutions.

Of course, there is far more than just these zeitgeist-grabbing topics at T360 on 21 October, but I just wanted to illustrate just how topical what this event is looking to do actually is. There are some major issues out there within the media – not least how to make enough money to keep going. Telemedia offers the channels, the billing and the track record to help them deliver this. Make sure you are there.

Sign up here TODAY.

Time for banks to join MNOs as pipes and let the cool brands handle the customers

The not-too-distant future could see banks shutting their branches, losing their brand identities and becoming ‘dumb payment pipes’, handling transactions from a new breed of online and mobile-based service providers. Or they could carry on much as they do now.

These were the two conflicting views posited in the Sibos Labs Innotribe debate on the future of banking, which sought to navigate its way through the likely impacts on the retail banking sector of mobile, social networking and, well, mobile social networking.

All sounds very familiar doesn’t it: it’s the same debate that the telecoms industry is having about the role of MNOs in the ‘who owns the customer’ debate (not to mention the will MNOs become banks debate)… In fact, odd as it may seem, the world’s of retail banking, mobile and telemedia are surprisingly closely linked.

Banks will continue to handle the movement of value, but by not getting in early on developments in mobile and social banking, they will simply be payment processors for a new breed of service providers that offer the services. The same has happened to telcos: they wanted to own the customer, and have failed. In the future telcos will carry the traffic and banks the transactions – the customer will be interacting with other, cooler, brands.

But it goes deeper than that: most retail banks are now really ramping up their trials of contactless payments with mobile devices, the use of mobile devices as card readers and payment authorizers, mobile banking and the wifi/wimax-based, location-based possibilities of banking and much more.

Billing for online and mobile content and services is also slowly become the preserve of the banks and credit card companies too. Its an interesting time.

But what it shows is that the banks and the MNOs are destined to become pipes: one for money and one for the content. This is a massive shift in the world order and doesn’t come a moment too soon. It will allow those with the service ideas to dominate the customer facing element of business and lets, finally, the boring, generally poorly regarded massive corporate banking and telco brands disappear.

Its already happening. Google and Apple, while not dominant in numbers, are the dominant brands now in mobile and online. They will soon become the dominant customer facing brands in retail banking, telecoms and billing – but only as the customer sees it. They will get all the glory, but the old world gets all the cash!

But still the old world clings to the misconception that it still has a role to play. Here at dull banking conference Sibos in Hong Kong, the ‘old world’, represented at a panel ‘face-off’ by Richard Jaggard, Head of Sales Global Payments and Cash Management Asia Pacific, HSBC, and Mary Knox, Research Director, Banking and Investment Services, Gartner Industry Advisory Services, Gartner argued vociferously that all the web, mobile and social networking brings to banking are new channels to customers and that, basically, what banks do will never change.

Chris Skinner, Chairman of the Financial Services Club & CEO, Balatro, and Tim Collins, Senior Vice President, Experimental Marketing, Wells Fargo, on the other hand, tried to convince the audience that mobile, not only offers the consumer “a branch in their pocket”, but also that mobile web access and social networking, are the tools of the upcoming generation and, whatever banks think, it is how they will interact with their customers in the future.

“Banks continue to put their heads in the sand when it comes to mobile and social networking,” said Collins. “It tool 10 long years to get banks using the web and they will take the same slow approach to mobile. But their customers get it and are bemused that their banks aren’t getting it. As a result telcos, and Google and Nokia and others will fill the gap and the banks won’t be involved.”

Skinner cited the example of Kenya, where Vodafone is now the biggest bank in the country. “In developing countries, the vast majority of banking is done using mobile and they are way ahead. This is what the future will look like.”

Knox, however, pointed out that, while this was certainly true in developing markets, “it is only because they have no better alternative. In the US and Europe, bank branches are very strong and will stay strong as they work and its what people want to use to interact with banks,” she said.

But, this may well be true today, but tomorrow’s ‘digital native’ consumers – kids that have never known a world without the web or mobile – will be very different indeed and will want to use social networking, mobile and other services, through consumer brands they trust, rather than going in to a bank branch, said Skinner. And that this is why retail banks face an uncertain future.

Jaggard, in defence of the banks, countered with the argument that “banks do get it and we are not ignoring it. But we are being realistic about the challenges of doing it – and anyway banks will underpin the whole thing anyway”.

MNOs hedge their bets with own credit cards

Much has been written – at least here on telemedia360 – about how mobile billing is seeing a shift from the poor payouts of operator billing towards alternative, credit and debit card billing mechanics which offer better pay-outs and, thanks to the rich inventiveness of the telemedia billing industry, a raft of flexible services.

All this means that, despite operator billing still being the predominant payment mechanism, the writing is on the wall for MNO control of the space.

So what do the MNOs do? Well, to cover all bases they are launching credit cards of their own. In the UK O2 has rolled one out and now Telekom Austria’s mobile arm, mobilkom Austria, has done the same.

It has long been mooted that operators would enter the financial services world. For many years they were so cash rich, thanks to their pre-pay services, that they rivalled banks for capitalisation (until of course we found out that banks were grossly under capitalised and were recklessly gambling with what money they did have – but that’s another story).

MNOs also had a huge – and profitable – FX (foreign exchange) business. Thanks to high roaming rates and the growing move to cross border services, they made tidy profits on simply moving money around.

All this made them look, to all intents and purposes like banks. Fast forward five years and banking is a dirty word and the idea of MNOs moving from their core business to join the throng of bankers is largely pooh-poohed. Its non -core and banking is now a dirty word.

But, launching credit card does leverage MNOs banking like operations, opens up a new revenue stream and, perhaps most importantly, means that, as credit card billing eats into operator billing, the MNOs still get a slice of the action.

There is other good news for telcos in the banking space also. At the Sibos convention in Hong Kong this week, strategists from Forrester Research, Microsoft and London Business School all painted a picture of tomorrow’s retall banking sector that relied almost entirely on delivery through wireless channels – that’s networks, wifi, wimax etc – and that relied on contactless payments and wireless web.

I’ll spare you the real boring details, but suffice to say the vision of the future is that you will travel in an electric taxi – paying automatically and contactlessly as you get out – enter the mall, where there will be a ‘bank space’ that will automatically recognise you and start pumping data to your handset and screens around you. You will then interact through you rmobile bah blah la did ah.

It all looks wonderful. But its Microsoft, so it probably won’t work very well. It is also mobile, so will cost a bomb and/or not work very well. Anyhoo, its an interesting idea.

Unpaid fines see PPP put the squeeze on outpayments – could this be the end of PRS as we know it?

News that PPP fines are going unpaid as companies – particularly fixed line service providers – plead insolvency may seem a bit of jolly wheeze: after all, its not that unlikely that some of these people are, as PPP attests, setting up shell companies, running a scam, then dodging the fine by ‘going out of business’. It’s the oldest trick in the book.

The problem is that PPP is now telling network opeators to withhold outpayments on anyone that looks slightly like they are in financial trouble in a bid to out manoeuvre the hucksters. The result: the already hard hit PRS market is suffering even more than usual with this extra squeeze.

When asked about the move and whether it was perhaps heavy handed, PPP reiterated its statement on the process thus: “In its recent Scope Review, Ofcom has recommended a registration process that is intended to improve due diligence processes, and the development of a new edition of PhonepayPlus’ Code of Practice should lead to additional protection. Until these arrangements are in place, PhonepayPlus intends to use existing powers to target certain types of organisation that have a profile of susceptibility to non-payment, by using directions to withhold revenue in Standard Procedure cases which meet the criteria set out here. Networks will be familiar with these procedures, which are currently already in use for Emergency Procedure cases”.

The move is one more step towards forcing service providers to start to adopt web based service provision and could, in my view at least, mark the death knell for the old way of doing PRS with telephones and operators and the like.

The move towards alternative billing solutions, better broadband and the acceptance of using the web to make calls, do messaging and so on are all making the idea of looking at new ways of delivering premium content and services ever more attractive. Moves like this by PPP to put the squeeze on even further will only hasten the end of trad PRS – and indeed hasten the end of what PPP seeks to regulate.

All this – and more – will be debated in depth at Telemedia 360 in Liverpool on 21 October. Watch this space in the next five working days for details of how to register for this key UK industry event.

Social networking is no longer a teen-scene... thank the gods

Research published last week by Ofcom reveals that about 19 million people in the UK – which amounts to half of all internet users – visit Facebook, spending an average of six hours a month on the website. This is an increase from four hours in May 2008. The report also found that the proportion of 25 to 34-year-olds who said they had a social networking website grew by six percentage points in a year to 46 per cent, while the figure also rose among 35 to 54-year-olds to 35 per cent.

Ofcom also found that the younger demographic, the teens were seemingly abandoning Facebook, MySpace and Twitter, deeming the sites uncool because their parents used them. This news was greeted with the usual near hysteria in the media, who decided that kids not using Facebook, mobile social networking and everything else ‘mainstream’ was a bad thing and the golden age of social network was dead.

Surely it isn’t? I may be wrong, but if I was running a business I would want to attract me to use it as I have money. The teenagers who hang around where I live don’t, so why target them? The same applies to smartphones. While it may now be the height of uncool to have an iPhone and use apps for it (as pointed out, somewhat laboriously by the never-off-my-tv Charlie Brooker), the demographic it targets is the golden slice of society: tech savvy, monied, showy-offy and game to try anything – and game to try and find new things before their mates do, so you don’t even have to spend on marketing to them.

This same idea should apply to social networking. Everyone is still trying to find the business model for Twitter (relax, there isn’t one), when all they have to do is look at the like of Flirtomatic, which has cleverly and lucratively worked out how to make social networking pay: and it isn’t for kids.

Same with adult. Definitely not for the younger demographic, the adult market has long made social networking pay – we used to call it chat and dating, wife swapping and even swinging. The sector is also making UGC viable too.

Again it’s the grown ups that make this possible. It might be my advancing years, but why is everything targeted at the young? Most of them are in college or (currently) unemployed. When I was a student (and a Dole-ite in the holidays back in the day) I had no money to spare and got all my content – music – by taping it off the radio or other people’s records. The channels may have changed now, but the principle is the same. Roll on getting kids off social networking and hoorah for a world where the web is for grown-ups – it will also help usher in the new world order where people pay for content.

Advertising falls through the floor, media companies look to make money from content – T360 has the answer

Hello and Happy Friday! Three very important things happened this week. Firstly, the UK’s largest commercial broadcaster ITV posted a massive £11million loss for the first half of the year. That’s better than the same time in 2008, but is still a horrible reminder of how tough the advertising market is out there.

The second monumental thing comes on the coat tails of another loss: at mighty News International. Murdoch’s publishing empire made a loss, too, because the bottom has dropped out of the display ad markets around the world. The move has prompted Rupert to bare (geddit?) all and go head long into charging for news content through new channels.

These two things are linked by more than just the fact that advertising isn’t dong so well in the ‘old’ media. In fact these two losses exemplify how the old world is being hammered by the new and how something really has to be done to drag the old media into the 20^th Century – if we can find a way to make it make money while remaining attractive to consumers.

Murdoch’s desire to charge for content has long been mooted, but this year’s losses have cemented the plan in his mind. Like most media outlets, News International used the internet as a free channel from day one. Now it, and everyone else, is ruing that decision.

The Financial Times has always charged for content and is, while not growing, makes money from it’s online content and is accepted as a paid for site. The others aren’t.

And therein lies the rub. Consumers want their media content free online. Moving from this expectation to a paid-for model is going to be hard. Murdoch rightly believes that his company’s content is of high value and costs a lot to produce, so why give it away for free. TV companies are in the same position. And these days, apart from the novelty of mobile, ad-funding is looking like a busted flush.

Micro-billing for things – I mean the order of cents – is one options. Combining this with being able to earn from UGC posting in cents too is another. But how can that be brought to bear on the likes of ITV, News International, and other massive mainstream media outlets? And will consumers buy it?

The answer is to look at how the telemedia industry monetises services and how that can be applied to media content.

Which brings us to the third important thing to happen this week: the launch of the Telemedia 360 event, which is taking place on 21 October in Liverpool. The event aims to bring together the media – print, TV, online, everyone – and show them how, through innovative billing, innovating services, and the power of the mobile web, they can start to look at monetising their content and using new channels to market profitably.

Running in conjunction with the International News Media Association (INMA) and the Online Publishing Association (OPA)’s annual European conference on the 22 and 23 October, Telemedia 360 is open to all their delegates, as well as our own and looks set to be the place that the media industry and the telemedia industry can get together to mutual benefit in these tough times.

Of course there are more details to come, and they will be up here in due course. But for now, check out the brochure online here and do drop us a line if you want to take part.

Taking billing power away from operators?

For years I have been waiting for the killer app. Literally years. And now it might be here, though not everyone agrees, largely because it has come along in the form of a nebulous sort of ball of change that is sweeping over the telecoms, content, entertainment and marketing industries like a rolling summer storm.

I talk of the change ushered in by the iPhone, Android and the apps store revolution. Oh no, not bloody apps again, I hear you shriek. Like girls. But bear with me, I think we are in the middle of something special here.

The iPhone has raised the bar in what consumers – whether they have a smartphone of not – expect. This has had a knock on consequence of changing how brands want to interact with those consumers. It has also fundamentally shifted power away from mobile network operators both in terms of network use and in billing.

And to my mind these shifts are a very good thing at a very tough time.

Take networks first. The wifi capability of smartphones is seeing more and more surfing being done outside of the control of the MNO. They can’t see what you are up to and it is also offering a blast of self determinism among customers. As this trend increases, the veracity of offering wider wifi (Wimax) networks in cities and other shared spaced gathers pace. The once seemingly unshakable qunitopoly grip (in the UK) on network – and therefore price – is being relaxed.

Which leads nicely to the second thing that this revolution is, err, revolutionising: billing. Operator billing has some advantages. But it has many, many disadvantages. And these are now being capably addressed in our brave new world.

Mobile web and wifi, apps and smartphones are all making other microbilling tools viable for use. Credit card services run by TxtTrans, TxtNation, TeleBilling and others are suddenly all the rage. Per minute credit card billing is now also possible with Core. And Wallets and even bankless payments – courtesy of PayPal and UKash – are also gaining ground.

The mantra that operator billing is easy and trusted is slowly being blown out of the water. People now trust new billing tools, because they work with their smart device, which they trust. And indeed, right now it is. TxtNation reports that PSMS is still the biggest billing tool for microbilling on merchant websites, but it is early days. This will change.

And yet, still there are some that argue that Apps And All That (A3T, as I like think of it) is not a mass market and that really the old way is the best way – and will stay as the best way. It can be no coincidence that within a week of each other, both Bango and Netsize – now pretty much 'the establishment' when it comes to billing – have released solutions that aim to bring the new world back into the grubby mits of the old. Bango is offering operator billing over wifi and Netsize is doing the same for in app billing.

Both cite that operator billing still brings about more sales and that people trust it. But I am not so sure. To me it seems that the old guard are determined not to be outflanked by the new. As we reveal in our features in the inaugural issue of T360, the final part of the A3T revolution is that it is shaking up business models. Things aren’t like they used to be. And that is good.

READ MORE ON THIS IN THE LATEST ISSUE OF TELEMEDIA360 NEWSLETTER OUT NOW

PTV market faces new problems as regulators try to prevent "stupid tax"

Hello and Happy Friday! It’s all go – or rather stop – in the interactive TV market. As revealed in our new newsletter out today, Ofcom has pounced with some spot checks on broadcasters who run interactive services, demanding to see the audits that were supposed to be carried out last year.

Surprisingly, a large proportion of tier two broadcasters haven’t done them yet and have called in people to get them done… and what have they found? Most of these broadcasters would fail and Ofcom inspection.

It turns out that many of these companies – and none of them have been named, but it isn’t the ITVs of this world – just have bad processes in place. A lot of them state “terms and conditions apply” but don’t say what they are, many don’t have any process in place to show that picking winners is done fairly (though we assured that it is) and many have issues with when competitions actually close (is midnight on the 21^st 11:59:59 or 12:00:00, which is technically the 22^nd?).

There is also the ongoing problem that many of these companies agree how services will be run over the telephone with service providers, with no written record of who said what. Not in itself a problem, but could be an issue if someone does complain.

And that’s the issue you see: complaints. And refunds. Ofcom (and PPP) are being very tight about making sure consumers get refunds if they complain. All well and good, but it isn’t such a cut and dried issue is it.

Rumour has it that the much vaunted return of PSMS voting for TV shows by Christmas is now unlikely to happen – largely because the rules as they now stand insist that anyone who complains that their vote was charged for and not counted gets a refund.

All well and good, but what about those people who, despite repeatedly being told that the lines are closing at a certain time, still send it a text vote? Surely there has to be some leeway?

This is going to be a hotly debated issue over the coming months – and one which through our many outlets we intend to cover in detail – and is likely to continue to drag out the continued closure of a potentially massive mass market interactive service.

It seems to me that, while something certainly needed to be done about the scams in the PTV world, we have – as ever, once the regulator is provoked into action – ended up with something too draconian to work. And everyone loses: the TV companies, the SPs, the telcos – and most importantly the consumer, in who’s name this is all being done.

It’s an age old question about regulation: how do you tackle the fine balance between protecting people from unscrupulous practices and protecting them from their own stupidity. Personally, I think “stupid tax” is the way to go, but what do I know?

Apps really are here to stay – and could save telemedia

Hello and Happy Friday! The news this week that independent apps store GetJar has surpassed the 500million download mark is remarkable news. For all the naysayers out there who think that apps are a passing fad, this does tend to show that mobile users the world over do want apps.

GetJar is not only flogging apps in the UK and US either – there is a growing market for them in development markets such as India and Indonesia where they offer the chance for users to do all sorts of things that we in the west take for granted with our PCs on their mobiles. They make use of the processing power in the phone, you see, not what your MNO offers you via its network.

Sure, there will always be a role of online content and services, as well as the mobile web offering a great opportunity for delivering content, services and so on, but apps so far tick all the boxes. GetJar believes that the two will happily coexist, but that apps have a distinct advantage to users the world over – certainly for the foreseeable future.

You see the thing about apps is that they reside on the handset; mobile web services, in a cloud, reside on a network – and networks are always way less advanced than the handsets that sit on them. This is why, until the networks bridge the generational gap between themselves and handsets, the more apps will become a dominant business model for getting sophisticated content and services out to people.

Apps are also much quicker to develop, test, disseminate and update. And with the advances that are coming along in terms of in app advertising as launched by 4^th Screen this week and in-app billing as rolled out by Netsize, the telemedia industry is certainly backing the apps model.

I am sure that as things improve in the networks around the world, the industry will also start looking at how to exploit the mobile web (as discussed at last week’s AIME seminar), so the future is bright for mobile users…

… so long as the networks play ball. For there is, as ever, a fly in the oinment. Both the apps store model and the m-web model basically mark the first tentative step in turning network operators in to smart pipes, rather than content companies – a move that MNOs themselves have started to (grudgingly?) embrace: witness Vodafone announcing the end of its Vodafone Live! brand as it shifts more towards an open web portal to be called My Web. But that in itself is going to be a huge challenge for network operators.

A report out this week by analysts Ovum suggests that – surprise, surprise – the MNOs are already starting to over-hype the fact that they want to now be smart enablers. What Ovum suggests is that this move is not going to be a commercial magic bullet, rather it will be a hugely challenging cultural shift – and some won’t survive the transition.

What operators need to embrace, says Ovum, is that their networks, connections, customer data and all there other ‘assets’ are commercial propositions that they need to share with third parties to get value from in a smart pipe world: a major shift in how they look at what they do that some may not be able to embrace.

In the meantime, I suspect that the third parties that Ovum sites (that’s you telemedia!) will get on with making apps work, monetising them and embracing the raft of new alt.billing mechanisms that are coming on line and perhaps we won’t need smart pipes at all, just wi-fi. Who’d want to be an operator these days eh?

German SMS market in crisis

Hello and Happy Friday! In a week when AIME publishes its 12 step programme for termination providers (TP) to mitigate the punitive impact of PPP’s mad regulation that seeks to punish the carrier of a dodgy service rather than the service itself (and charges them for the pleasure of policing this policy), news reaches us that, for all the turmoil in the UK market, we must all spare a thought for our German counterparts: they are having a really torrid time.

Late last month a dodgy SMS chat service run by a company called MintNet got picked up by the regulator for purporting to connect users to real people’s mobile numbers for saucy chat, when really it was putting them through to an agent at the end of a PRS number. OK, not very nice, but pretty basic stuff.

However, the scam has unleashed a deluge of regulatory stick waving and, in turn, a massive underwear-browning among service providers, TPs and network operators about what they can and can’t do with SMS chat in Germany. As a consequence, the German SMS chat market has pretty much collapsed overnight.

German regulators and the government have introduced drastic new regulations overnight, which compel service providers to categorically state not only the price of services, but also whether they are being connected to a real person or an agent. While this takes some of the mystery/fantasy out of the process for the punters, the real issue is that ads for these services will have to physically be bigger than before, costing a lot more money. And this the industry can ill afford.

While this is bad news for the chat sector, the vortex that this seemingly minor incident has created is sucking in everything from TV voting to voice chat services. The industry has got the willies across the board as to what they have to state regarding services, charges, minimum charges and so on. As a consequence mobile is being forced out of the interactive TV space and other services are under growing pressure. And all this at a time when economic woe is mounting.

Companies have already started going to the wall and the industry, through its union FST, is lobbying the government – both at a state and a federal level – to at least give it some time before introducing more regulation: at least until things pick up. Network operators are behind them, but with federal elections coming up in September, there is every chance that this will become a political football.

Here in the UK we have had our fair share of regulatory issues – heck, you STILL can’t use SMS voting on TV (for now) – but could the UK market face similar issues to what is happening in Germany?

Things seem reasonably stable in the UK regulatory environment currently. AIME has its 12 point guidelines which has attracted some industry buy in already and the MEF has set up a series of regulatory workshops to help the industry help PPP develop its next code of conduct. So far, so stable.

My worry, though, is that as times get hard and Quangos such as Ofcom and PPP seek to justify their existence they will increase regulatory pressure. And the only place this can go is into things that it currently doesn’t regulate – that new fangled Internet thing. Perhaps we are facing our winter of discontent along with the Germans? Anyway, more on this in the coming weeks and look out for an in depth piece in the next issue of Telemedia magazine out in September.

From next week, these weekly missives you have been receiving will be posted on our website as a blog, so check that out from next week at www.telemedia-news.com. Have a good summer!

Regulation: time for a change?

Hello and Happy Friday! As Chancellor Alistair “Move Over” Darling seeks to stiffen the regulation of the Financial Industry, leader of the opposition, David “Dave” Cameron has been calling for the curtailing – or at the very least streamlining – of Quangos (Quasi-Non Governmental Groups, or “Regulators” as we know and love them) to save the public money.

One of the key Quangos singled out by Cameron has been Ofcom, which he perceives as being over staffed, possibly over-reaching in its scope and frankly overpaid – Cameron reserving particular ire for Ofcom head Colette Bowe, who at £200,000pa for a three day week, earns more than the Prime Minister: a gripe guaranteed to chime with all politicians as they get used to having fewer tax-payers readies to bandy about on duck houses et al.

But beyond the obvious political machinations that Darling and Dave’s contrasting views on regulation, possible prime minister in waiting Cameron may have hit on something. Its not news that the telemedia industry isn’t a fan of regulation (which business sector is?), but telecoms is in a particularly strange position in terms of regulation, having as it does sets of national, European and global regs to content with – many of which apply in unison and contradict each other.

The problem with regulatory overlap – and, indeed, regulator over burdening – has been brought to the fore this week by Mobile Entertainment Forum (MEF), which has talked to its members and found that the UK mobile media market currently faces the most regulations of any country in the world and is tying itself in knots over which ones take precedence over others. And if that wasn’t enough, there are even more in the pipeline.

Currently, says the MEF, the UK telecoms industry is subject to the following consultations on yet more regs: BCAP/CAP consultations [recently closed]; Ofcom scope review [currently open]; Ofcom Audience Participation in Radio Programming – the use of PRS [currently open]; Ofcom Broadcast Codes Review [currently open]; PPP Discussion paper on next Code [currently open].

All this offers reinforcement of EU rules (both current and pending), as well as delivering new regs that apply to operations in the UK. Between them they lead to confusing messages as to what regulations telemedia firms need to obey. For example, some of the proposed changes to the CAP/BCAP Codes clash with the PPP Code.

Then there is the issue that in the UK we also have a range of bodies, all of which claim some jurisdiction over what the industry does: Ofcom, the ASA, PPP, the OFT and the ICO all have Codes or regulations that apply to the mobile media industry. Any ambiguity is likely to cause serious regulatory uncertainty and as a consequence, the regulatory burden on companies that run the serious risk of becoming disproportionate.

All this is a mess. But a mess that fits very neatly with what I wrote about the week before last: while all this ‘telecoms’ regulation is being superseded anyway. While the old skool telecoms regulators try and fit the square peg of current services into the round hole of their old way of looking at telemedia, the industry is moving on, looking to use IP-based technologies over the web (which is fixed and wireless these days) and is, as such, dodging current regulatory thinking.

The MEF believes that the current Ofcom scope review may well address this, I wonder whether, as the political will in the UK shifts towards cutting public spending, whether we may just miss a massive regulatory shake up. If that is the case, then we could see a burst of innovation in the telemedia sector in the coming months. If, on the other hand, we see a last gasp attempt by the old world to regulate the new, we may end up with a badly fitting regulatory environment that stifles innovation at a time when we really need it.

Welcome to Telemedia's new blog

Ever keen to keep up with the modern world, Telemedia-news is blogging. Instead of getting your weekly missive emailed to you on a friday (sooo 2007), we are blogging it each Friday – and in between when there are things that really need to be said – and pushing links to it through our presence on Facebook and of course Twitter... and whatever else comes along between now and when we decide to do something else.

The move to blogging not only reflects that fact that we think that its more in keeping with the world we operate in today, but also gives us the flexibility to comment on what is going on in the industry with greater agility. Moreover, it gives you, the telemedia community the chance to comment and interact with us, your fellow readers and the wider telecoms world.

So, keep your browsers pointing at telemedia-news.com and get commenting.