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!