Christmas is coming... and m-commerce is ready to get fat

As Christmas approaches, I am getting very excited. I can’t hardly sleep for anticipation. I pace. I fiddle. I can’t concentrate. No, not because I am counting down the days until Santa arrives at Telemedia Towers, but because soon, very soon, the deluge of predictions as to how much commerce will be done on mobile around Christmas are but days away from deluging my in box.

It’s my favourite time of year. Everyone, usually, gets very carried away about how much shopping people are going to do over mobile this year compared to last and how the mobile retail revolution is upon us. It validates me and makes me not feel like such a dork for doing all my Christmas shopping on my phone for the fourth year running. I am, it makes me feel, not alone.

But while I wait, Verdict Research has looked into how much commerce is going to be done via mobile by 2017 and concluded that, in its words, “m-commerce is set to grow a whopping 504% between now and 2017 – resulting in almost £1 in every £4 spent online being through a mobile device in 2017”.

What? Only 25% of online shopping being done on mobile by 2017? Really? Already there are more smartphones in the US than normal phones (51%, a milestone reached this week) and sales of smartphones and tablets combined are likely next year to outstrip PC sales. By 2017, the way everyone will connect to the web will be via a smartphone, a tablet, or some sort of combination of the two (a smablet?). Now, a lot of this will be via wifi, but is it still mobile or is it online?

In fact, it doesn’t matter. It will all be digital commerce and by 2017 I don’t think any organization is going to really care where the sale comes from, so long as it comes.

What I think we will find is that most ‘e-commerce’ will be initiated from something running what we think of today as a mobile OS, and so, even if its running off wifi via a tablet on someones’s desk (or even a laptop come to that) its m-commerce.

What Verdict’s findings overlook is the natural convergence that is happening between devices, networks, operating systems and people’s habits. Touch screen devices – smartphones, iPads, Andriod tabs, even the Surface – all offer a much better user interface than desktops. They are also cheaper, more flexible and convenient. They are going to be the mass market tool for web access in 2017 (if not long before – I reckon they are already well on their way to being so, as Christmas data will reveal: the reason I am so excited).

What Verdict does get right (well, sort of) is that it believes that consumers will use mobile to research what they want to buy, but won’t actually purchase through mobile because, they don’t feel comfortable transacting through mobile.

Here, the researchers have a point – up to a point. Right now there is some consumer wariness about paying using mobile payments. But there are two things wrong with this argument.

Firstly, most commerce transacted through mobile devices can be done through PayPal, iTunes, or sites that have stored card details. It is not different to online shopping in that regard – its just a different device.

Secondly, mobile payments that actually use mobile are already starting to gain consumer trust here in 2012. Thanks to charity donation initiatives, the rise of Payforit and the use of in-app payments for gamers, gamblers and consumers of adult are starting to get people using m-payments. Initiatives underway by everyone from banks to retailers to network operators are going to see the use of m-payments rocket – not by 2017 but during 2013.

I believe that by 2017, mobile will be THE payment tool of choice for most people.

So, while I am excited about Christmas and all the positive reinforcement I am going to get from the analysis, I am also looking forward very much to Christmas 2017 (only 1825 sleeps away!) to be proved right: everything will be mobile and your kids will marvel at how ‘online’ used to be accessed from a big box that sat on a table.

Happy mobile shopping!

WORLD TELEMEDIA 2012: That was the show that was

This year’s World Telemedia in Marbella once again showcased how the telemedia sector is growing and, while booming maybe putting it too strongly, there is cause for some cheer.

What the event showcased was that there is still plenty of money to be made in ‘traditional’ telemedia services, as well as offering an insight into how new opportunities around publishing, TV, social media and all things m-commerce are all starting to offer some lucrative new markets.

According to David Ashman from AIME’s state of the nation address charity, virtual goods through the likes of Facebook and other services and international payments are all growth areas, helping propel PRS earnings, according to PPP figures at least, to nearly £1billion in the UK alone.

In Germany, virtual goods are worth some £139.3million while the UK is not far behind with £93.1million. The UK has the largest average spend of some £19 per person who spends on virtual goods, which the French have really embraced it spending £28 per person.

Facebook is, unsurprisingly, leading the march, with some 15million of its European users purchasing virtual goods, of which three quarters are doing so via Zynga games.

But, as Ashman pointed out, as Facebook has announced a phase out of its Facebook Credits and the cancellation of its Facebook Wallet, there is now a huge opportunity for telemedia billing services to mop up here.

But the traditional markets are also doing well. According to AIME figures chat and dating is a £1billion market, and accounts for some £33.5million of UK PRS revenues and is expected to grow by some 57% in 2012, making it potentially the soaraway success of the PRS market, if it can be capitalised on effectively and scams and bad press are avoided.

Adult is also a rich area for PRS, generating some £125.7million in the UK.

Psychic however seems to be on a downward trend, showing a 4% drop in PRS revenues this year against the while PRS industry largely being up by an average of 9.5%.

The other potential growth area for all content types – including the psychic sector – is in delivering in-app billing for developers. Many are following the freemium model, offering free ‘lite’ versions that either generate revenue through in-app purchases or upgrades to richer versions from within the app. This is starting to be a growth area for the sector, with Payforit ideally positioned – and it has form here, as we saw last year – to help offer this to non-iOS store apps.

To this end, AIME is developing a PRS flow model for Payforit in apps and is working with MACH to deliver these services through 2013.

But all of this is nothing without balanced regulation, argued Square1’s Mark Birkett. Complaints about PRS services are up, he said, but that is largely down to closer scrutiny by the regulator and the apportioning of ‘blame’ across the whole value chain. This, Birkett believes, is a good thing, but PPP has to have balance in how it adjudicates, since we are seeing some very high fines being levied for issues that previously would have attracted much less censure.

So what does the coming year hold? There are issues of media fragmentation several speakers warned and the industry has to be keen to look at how different billing mechanisms suit different people in different circumstances depending on how they are looking to consume media and services. This is something that has to be addressed through the coming year – and something we shall see a lot more of at the next World Telemedia in 2013.

There will also be an increasing focus on m-commerce, video services and cross-media offerings. The industry is also seeing a smattering of new start-ups which is encouraging, said Shawn Brown from Converto, He believes that we are going to see a lot more clever applications and monetisation around mobile social commerce offerings.

That is true, said Graham Halling from Spoke in his opening keynote, but the industry and the new start ups face the challenge of developing the right business models to support an growing amount of interactivity across media types. Brands, TV companies, print and charities are all looking at how to generate monetisable interactivity and new services are emerging, but working out how to monetise them is a challenge.

The good news is that these verticals need guidance in how to do this, and that is something that telemedia business can help them with.

One challenge that the whole business is going to face, believes Halling, is the emergence of Me-tail, where brands and retailers slowly start to become media outlets for relevant media and content around what they sell, either as advanced marketing or as a revenue stream. This is going to be very challenging for the established media, but also presents an opportunity for the telemedia sector.

Me-tail – the key to telemedia's bright future?

Following the triumph of World Telemedia Marbella we took a bit of a breather – hence the late arrival of your weekly newsletter. But what a show that was. So many new and familiar faces, so much talk and networking – and business – and, of course, quite a lot of fun and games. I won’t go into the real details of the latter, that is what the World Telemedia VIP group and Telemedia-news Facebook groups are for (join if you haven’t already).

In among all this great partying, however, was some really meaty content. One thing that really stood out for me was the Me-tail theory espoused by Graham Halling from Spoke in the opening keynote. The idea is that, while mobile commerce is becoming the de facto place to do business these days, there is move for brands to look at how to do it themselves.

The argument goes that the likes of Nike know more about, say, sports than a national newspaper or non-dedicated sports channel, so why not offer sports news. This suddenly changes the game. Where once media were king, now brands are. And through this, they start to own the customer not just when it comes to, in Nike’s case, selling them trainers, but also where they turn for sports news.

And what’s in it for the telemedia industry? Plenty. You guys can help these brands monetise their engagements with these consumers, not only through content billing, but also through monetising social interaction and user generated content offerings that will go with it.

As Spoke’s Halling put it in Marbella: “Me-tail is an interesting re-imagining of our industry”.

But we won’t have an industry to re-imagine if we don’t get to grips with fraud, Josef Bruckschlögl from Kwak Telecom warned delegates in the day two opening keynote. PBX hacking is still rife, and there are worrying increases in high jacking, not to mention the raft of new technology frauds that are being perpetrated, particularly in Russia and China.

In some ways these are old frauds, often delivered in new ways, but they are still problematic. They cut revenues for everyone in the value chain, as well as eroding both consumer and potential customer confidence in using PRS.

And this is the dilemma that we face. There are rich pickings out there for many as brands and media companies vie to deliver content and services and monetise them, but unless the industry can present a clean image to these brands then something else will step in and make it happen.

The same issues affect billing and m-payments. PRS is still a great tool for microbilling and may yet have its best days still to come. But there are increasingly new ways – not least Apple, Amazon and Google – waiting in the wings to steal much of this brave new world. Oh, and the operators – who didn’t bother to come to the show, shame on them – are also trying to grab a piece of the action. Fat chance, IMHO, but we shall wait and see.

Full show report in next Telemedia Month, out soon!

Carrier billing rides again

Great news from mopay – gaming, social media and dating services are driving an uptake in direct carrier billing as consumers start to see that simply adding the charges for these things to their bill while they are on mobile is actually quite a neat idea.

Couple this with the fact that iPhone5 has no NFC in it and I think we are starting to see how mobile payments is starting to shape up.

And it is all just in time for WORLD TELEMEDIA MARBELLA on 17-19 October, which is now shaping up to help the telemedia industry capitalise on this growing movement to alternative, shall we say, ways of monetising mobile.

With speakers from Spoke, RedBee, Outbrain, Crazy4Media, BuzzCity, Tradedoubler, Tree, ATS ImpulsePay, Square 1, C3, Kwak, txtnation, WorldWide Premiums, Converto Group, Sundial, Telserv, AIME, PPP and many more, the agenda is shaping up to offer a unique insight into how content and interaction with services can be monetised – often through on carrier and related third party billing.

The fact that consumers now seem to be getting it – especially around games, social and dating – really proves that, while the industry has changed, there is still quite a lot of potential left in telemedia services. We just have to get the message out.

And that is really the theme of WORLD TELEMEDIA MARBELLA: showing delegates from the media, TV, advertising, chat, dating and adult how to create engaging services and how to turn that engaging service into revenues – either directly or indirectly.

What is interesting from the mopay study is that some 30% mobile gamers and 25% of mobile daters are using carrier billing while playing on mobile. What is more interesting still is that once they have used it they come back for more. 55% of returning customers complete five or more mobile transactions once they have discovered mobile billing.

The role of mobile payments to monetise social media, however, is perhaps the most intriguing aspect of all this and WORLD TELEMEDIAMARBELLA will feature award winning company ShowCaster talking about how to turn live TV events into engaging social offerings – and hinting at how to monetise these.

There is much more detail still to come on the show as we confirm the last few speakers so keep reading Telemedia-news.com in the coming weeks as the line up gets finalised – so SIGN UP HERE to hear from some of the thought leaders around our industry, see some new ideas in action and, of course, network you're a*se off at the show.

Think global… act global

The introduction by PhonePayPlus in the UK of a mandatory registration scheme across the whole value chain of PRS providers has had some interesting upshots. Not only has it made the system more fair for most of those involved in the industry, as well as protecting consumers to a new an unparalleled degree, but it has also thrown up some very interesting stats about the use of PRS and the location of PRS services.

Of the 4000 companies that registered as providers with PPP, 14% have their HQs located overseas, based in 75 countries, including Australia, Russia, China, India, Nigeria, Argentina, Spain, Germany and the USA.

The attractiveness of the UK PRS market for international providers and investment is underlined by research published in 2011 by PhonepayPlus that shows while the average global PRS revenue per capita (based on 20 bench-marked countries) was US$4.57, in the UK it is US$18.70.

In addition, PhonepayPlus’ annual market review, Current & Future Market for PRS 2011, shows that some providers are capitalising on the ‘borderless’ reach of global sites, such as Facebook, by facilitating mobile payments across a range of international markets. In addition, many UK mobile aggregators are now part of international consortia. 

And this is, in part, why this year’s WORLD TELEMEDIA event is being held in Marbella to not only showcase the international nature of the industry, but also to tap into the growing level of PRS expertise being run out of the Oligarch’s Playground – not to mention the rest of Europe.

Like the show, this issue of Telemedia magazine is also looking at the international market for PRS services and their impact on everything from m-commerce to regulation to the some of the new frauds that are being perpetrated thanks to an increasingly digitally connected and international user base.

And these are vitally important issues. While the ‘traditional’ PRS services of chat, dating, psychic, horoscope and so on are all doing OK – albeit in a somewhat plateaued graph – the new money is certainly in exploiting the burgeoning world of apps, m-commerce and digital media. And, to paraphrase the old Yorkshire adage, where there’s brass, there’s muck.

The world of apps and mobile downloads – not to mention social media – has brought with it not only a raft of new ways to connect consumers with content, services, goods and billing, but also new ways for old scams to be perpetrated.

These are detailed in our feature in this month’s magazine – and will be tackled too in the sessions at WORLD TELEMEDIA MARBELLA (17-19 October), along with how regulators need to look internationally and digitally simultaneously to really nip a while new breed of consumer harm in the bud.

And there is everything to play for. These services are no longer on the edge of consumer markets, but are deeply entrenched in Joe Public’s everyday digital live – and they are the stuff today of big brands. Scams and problems that dent consumer confidence in this broad spectrum of digital commerce is going to have dire consequences all round.

So join the debate and book your place at WORLD TELEMEDIAMARBELLA to learn about new services, new ways to make money – and how to make sure the business is sustainable.