“We’re off portal anyway,” said Neeraj Roy, MD & CEO of Hungama Mobile, during the first session of the content stream on Day two of the 3GSM Conference. The session focused on propositions for going off-portal, and bypassing the operator. Roy said that no one wakes up wanting to buy a ringtone or a wallpaper – it’s an impulse purchase, so an off portal strategy is necessary. The economics don’t yet justify an off-portal strategy because you need a healthy share to be able to spend on marketing. Sanjive Sethi, Director Telecom for Indiatimes said that they are considering partnerships in the off-portal space – they have their own infrastructural costs, and the content industry is not well organized; very few content owners have clear cut strategies to talk to operators. Operators, said Roy, started looking at VAS after they were asked about their ‘zero voice strategy’. There’s a need, not for lobbying, but for collaboration in order to grow the pie. There’s no format to push a site like wap.xyz.com and push it as a standard. Sethi feels that there’s a lack of education on both sides, and the environment is ambiguous, but should be sorted out in 10-12 months. A revenue share of even 60 percent would allow them to spend 20 percent on advertising. The value chain is a triangle, where the customer is approached by both the content provider and the operator. He also said that 8888 doesn’t get any subsidy on advertising in their group publications, but I heard quite a few voices disagreeing with his claim, afterwards.
Gopal Krishna, moderating this session, asked about what content providers can do next. Neeraj Roy responded that applications are an opportunity – a Dr.Batra’s Homeopathy Clinic application, or an Anjali Mukherjee Diet Plan application can be created. Sethi also brought up the point about billing in a 3G environment – if a movie is cut after 30 seconds of viewing, how does the viewer get billed – for zero seconds or 1 minute?
The industry is getting organized and there will be a significant retail push one that launches.
Zubin Dubash, GM-VAS for Tata Teleservices, in the audience, offered the operators perspective: We’ve opened up to short codes via SMS, and done something similar on voice side. There’s something like that happening in WAP. You can do the marketing role, since you have the media vehicle to do it. But there are no marketing spends from the content providers’ side. Higher revenue share will happen, though there are some constraints on the VAS side. The operators and content provider are just two of the stakeholders on the CDMA side, and Qualcomm is another in the mix. The operator has legacy issues, and pricing flexibility isn’t possible yet, but will happen in the future.
During his presentation, Sanjive Sethi put forth a case for third party billing aggregators and an integrated system of billing with the operators that offers data in real-time. Discrepancies are currently as high as 30-40 percent.He also said that content providers are to blame too, for the poor revenue share situation - they take on rights to movies for Rs.1 crore, and hence have a short term focus for recovering their money.