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.

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