Carrier billing keeping operators in the content game

POSTED BY Global Administrator
In the wake of the great app revolution, when operators became dimly aware that the scale of downloads from the App Store was, shall we say, a little bit higher than those from their own portals, their initial response in many cases was to dig out a paintbrush, cross out the word “portal” and next it daub the word “store” in slightly shaky letters. If consumers noticed, they rarely stopped by to check out whether the portal store in question had any new content, because they were too busy playing Angry Birds which they’d just downloaded from the App Store, the Android Market/Google Play or telling one another that now you could even get it on GetJar. Clearly, a number of factors were working against the operators here, ranging from the legacy browsing experience to economies of scale, and so after a while many of them have adopted a new approach. This has involved a dual strategy: in the first case, a “shelf in store” where the operator has its own little piece of virtual estate within an OTT storefront allied to its own brand storefront; this is accompanied by the introduction of carrier billing on said storefronts, so that even if you miss out on selling Joe Public an app directly you leverage your billing relationship and make a percentage that way. While the first part of that approach may be having mixed results (even if you go to shelf-in-store or the own brand storefront – usually by hitting the wrong icon – you realise that they don’t stock Angry Birds Space Premium and move elsewhere), the second is paying handsome dividends for a number of reasons, of which the primary one is this: many consumers don’t wish to enter their credit card details (or don’t have one) and so instead, when you’re asked “Do you want to pay for Angry Birds Premium on your mobile phone bill?” you go ahead and your phone bill is sixty-nine pence heavier. This is beneficial not only to the operator, but the storefront in question: since introducing operator billing, storefronts such as Nokia and Blackberry have seen a marked increase in paid downloads. Meanwhile, with freemium becoming the payment model of choice, many carriers are now offering the option of in-app carrier billing, thereby increasing the options available to the developer. Furthermore, storefronts are not the only players picking up on carrier billing: last month, Bango confirmed that it would be supporting carrier billing for Facebook’s sites in Germany, the UK and the US. It may not be the starring role in the content revolution that the operators had fondly envisaged back in the day when the 3G licences were being auctioned off for exorbitant sums, but it at least allows them to maintain a foothold in the content value chain.