Maximising Mobile Over-The-Top (OTT) Services, Maximising Monetisation Opportunities
As quickly as the smart device app phenomenon has taken off (which has really happened in just a few years), all over the world, mobile users have been rapidly adopting free-to-use, over-the-top (OTT) services – particularly social networking, messaging and communication apps. Whether it’s Facebook, Twitter, Skype, WhatsApp, Snapchat, Line, Kik, Viber, Yo, Whisper, Tango or another variation, the list is forever growing, with new variants of the ‘social messaging’ app launching on an almost weekly basis –this now accounts for over 2300 in the app stores today.
It is estimated that by the end of 2014 there will be over 2 billion OTT apps installed globally, and at least 700 million monthly active users. According to Analysys Mason, the total volume of messages sent from mobile devices via OTT services in 2013 totalled 10.3 trillion. A number that now already exceeds SMS messaging. By 2018 the number is expected to reach 37.8 trillion – mobile users just can’t get enough of sharing, sharing, sharing – but how does a mobile operator or any business for that fact, make the most of this and ultimately maximise monetisation opportunities in a world which is fast moving and sometimes free!
How to compete in the ‘new world’ of fast, furious and free?
For mobile operators and businesses, the new social world has proven to be a significant disruption to the status quo. With user behaviours now moving away from using traditional voice and messaging services, which was once lucrative network traffic (generated from core messaging and voice infrastructure), to newer, competitive OTT communication services. While SMS still equates to being a fundamental engagement tool, the old ways of conducting business, including operator business models, have come under threat. In this world of fast, furious and free, operators and businesses must now deliver engaging new OTT services, which meet a need, create a trend, are relevant and may offer something different but at the same time can be monetised to maintain revenues.
So what can be done to fulfil a new requirement in the app rat race? What needs to be considered and what are the new monetisation models which can be deployed to build a stronger more profitable business?
- Firstly, anyone looking to deploy an app needs to look at the lowest hanging fruit – what is easy to promote, gain interest and build traction – and what will device users gravitate to and stay using?
- To make an app truly monetisable, it is about attracting the early adopters and long stayers – the more users, the more data, the more you can add tailored services, promotions and marketing which, in turn, make money.
- Any service today needs to create connections, elevate people prominence, followers, build communities and gain a CULT STATUS, as well as have the legs to last the distance – something that is cool but stays cool…not a passing fade – the cool kids want to play all day and won’t stray!
- This app needs to keep people’s attention – it needs to have “Addictive Value “
– Users keep going back – several times a day
– Fills a void / gap – especially when boredom kicks in they turn to your app
– Needs to be part of people’s daily lifestyle – not just an app you use for one off functionality – that’s when users lose interest
– Gives people the opportunity to express themselves and share more of their life experience.
Creating the next killer app may sometimes be down to pot luck – and none of us can really know what may or may not take off. However, Acision has given some thought to what can help you take a piece of the OTT and pie and how this can be monetised.
fuseMe by Acision offers operators the creative answer to addressing OTT services, turning market challenges into opportunities. With the core principle being, share your world…smarter, fuseMe is a communication client, which provides adopters with the capabilities to launch a one-stop-shop application, in order to react quickly to market shifts and changing consumer behaviours. The solution provides core functionality including messaging, chat, voice and video with additional features beyond those that current OTT players in the market. These include split screen and drag and drop capabilities, see-what-I-see, in-app web browsing, gaming, media channels and feeds , as well as SMS, MMS interworking and fall back, which means always-on connectivity when broadband is unavailable and when mobile users are not on fuseMe or still using feature phones.
fuseMe by Acision offers a number of new opportunities to generate additional revenue, with some of these monetization models set out below. However, to get people really using an app and hooked from the outset so they keep using it long-term, the operator for example, should, and in order to compete, provide their users with a core set of communication features for free. With this approach, in-application purchases or subscriptions to premium services, such as voice or video conferencing, as well as a variety of other endearing features within the application, can be charged for if it is over and above the basic service.
For example, a user can pay on a per transaction or subscription basis to unlock service functionality within the application either through a recurring monthly subscription fee or charge ($x per month for premium service) or a one-off fee / charge for specifically designed service ($x per transaction). As well as these additional money making opportunities, app owners should also bear in mind that by offering existing customers a range of free services within the app they can also help protect existing revenues and reducing customer churn.
For more details on how to ramp up revenue opportunities please carry on reading. While the below is not an exhaustive list, and may vary in relevance dependent on the market, it is intended to demonstrate the real business potential of adopting a market relevant, commercially viable OTT application and making it valuable for you and the user.
Ramping Up Revenue Opportunities
Once a branded version of an app such as fuseMe has been installed by customers for free from the app store or preloaded on a phone, there are a number of ways to start generating revenue. To increase ARPU, operators can either offer 1) premium service add-ons or 2) third party content extras. Examples of this are below:
Message personalisation service add-on
Operators or businesses can provide their end users with the ability to tailor and personalise their application, specifically messaging apps, with services such as auto-reply, auto-signature, message copy, personalised black / white list, wall papers and alias services. We have found that consumers have an affinity for services personalised for their preference.
Research conducted by Acision showed that two thirds of mobile subscribers indicated a high level of interest in personalised messaging services and significant numbers were willing to pay extra for these types of services. To make money out of such services, a user pays a premium to have these additional services incorporated into their communication app as part of their subscription. This can either be a recurring monthly subscription fee / charge for example ($x per month for premium personalisation service), or a one-off fee / charge for specifically designed messaging bundle ($x per bespoke personalised messaging bundle).
Wi-Fi service bundle
Operators can provide their end users with a specifically designed service bundles (including voice, group chat, file transfer, SMS, MMS, file transfer, and content sharing) to extend the communication capabilities of their service package. An app like fuseMe app can be offered, alongside core network messaging, to enable users to continue making and receiving phone calls and messages when out of network coverage using Wi-Fi. Calls and messages can still be connected to their personal cell number. This service is a win for customers, and also helps operators with in-building coverage challenges.
Today Telefonica offers a similar service with their TU Go app for pay monthly customers. By downloading the messaging app across multiple, compatible devices (smartphones, tablets, and PC) customers can benefit from continued message, voice and voicemail connectivity when coverage is poor or a primary device is unavailable. Customer can continue to communicate across devices and networks with costs coming out of their monthly subscription charge.
To work effectively, a user signs in with their personal number to the app, and the cost of usage of voice and messaging comes out of their post-pay monthly subscription cost. Any additional usage is deducted from monthly subscription fee.
Return message fees
As fuseMe provides complete interworking with SMS / MMS it allows users to send messages to anyone in their address book. When a non-FuseMe contact replies to a message sent via Fuse operators can leverage the traditional charging model on the SMS message fees. So for example, the incoming reply messages from non-fuseMe contacts are charged standard SMS rates and a per-return message fee ($0.x per return message) is based on operator’s market rate plans – a great way to keep making incremental revenue out of traditional services.
Premium third party message service subscription
With the flexibility of OTT apps today, service providers can enable their end users with access to premium services previously used with limited functionality in SMS – these can include weather alerts, news updates, daily horoscopes, and other third-party provider content. All delivered via dedicated channels.
Premium services have always remained popular in many parts of the world for notification about sporting events, tele-voting in conjunction with TV programmes and personal content such as horoscopes. Users can subscribe for periodic content or use a designated code for content on demand. This can be monetised through a recurring monthly subscription fee / charge ($x per month for premium message service), a one-off fee / charge per usage ($x per content on demand), or sponsored by a business partner, which works well around a specific event.
Premium third party content channel subscription
Operators and businesses can provide their users with access to premium rich media content delivered via dedicated branded channels within the app. We have seen this work well recently with the alliance with Line and the BBC – BBC News is now delivered to Line customers who sign up for the service, giving that extra added functionality and service.
Another example is around world sporting events, such as FIFIA’S Football World Cup. Content provided by FIFA could be repurposed and delivered to an in-app content channel for users to subscribe to. In this scenario, operators and businesses can leverage the existing relationship that they might have with content providers to deliver premium content to their app end users – again providing that extra added value. In this case, a user can subscribe on a regular (monthly) basis per content channel or per bundle of channels. Or for a limited period only, one-off fee (i.e. duration of sporting event like World Cup).
Third party content & services in-app purchasing capabilities
Operators and businesses can provide their end users with the ability to purchase third party content, goods and services from within the app with one-click checkout tied to their service bill. Today, stickers & emoticons are currently very popular within OTT apps, particularly in Asia Pacific, but this could eventually lead to selling anything on the digital marketplace. Whatever is hot can be sold – digital pictures, digital consultancy, digital advice!
All a user needs to do is decide to purchase items of value to them either from branded channels within the app, such as games, digital content, stickers (emoticons), wallpapers, apps and physical goods. With one-click, and no need to fill out forms, the purchase can be made and cost added to monthly bill.
Revenue from Third party advertisers / content providers
With content channels already built into apps like fuseMe, not only can operators charge users for access to content but they can also charge third party content providers for access to the end users.
Branded content channel sponsorship
Operators and businesses can provide the opportunity for third party partners to deliver a channel of branded interactive communications & content directly to a community of users. The sponsor would provide dynamic, compelling, rich media branded content, messaging and advertising, repurposed for delivery within the app. The user would be able to select and control the delivery of content from the participating organisation via an opt-in process.
To make this monetisable, a fee would be charged to sponsor. The opportunity lies in building a large enough community of users that is of interest to the potential sponsors to want to target.
Gaming channel with advertising revenues
There is a huge opportunity for third party gaming developers to distribute their latest games to the communities (for example, using the Game Catalogue channel) with in-game advertising integrated. The user can select and play games within the Game Catalogue for free and be exposed to advertising as they experience the content. Gaming developers sells the delivery of advertising impressions to the based on the user audience on a CPM basis. Third party advertisers provide ad content / messaging to be integrated into the user experience of the game within the app.
In this scenario, a revenue share deal can be arranged with third party gaming developers / owners for example, whereby operator takes a percentage of the CPM rate.
Revenue from Partners
Other monetisation options available are to white-label an app like fuseMe out to other third party enterprises. Organisations such as healthcare providers, large consumer brands, or international consultancies who would benefit from a unified communication ecosystem can essentially rent or white label an app and fuseMe provides the perfect instance of how this can be done.
Operators can provide the features & functionality of fuseMe to an organisation with large internal and external stakeholder community and the organisation adopts and uses the app as its own. The operator can then charge a licence fee for usage per subscriber on a monthly basis.
All-in-all – an all-in-one app for mobile users and monetisation
All-in-all, an app can be the route to build a community of loyal devotees as well as the crux of further monetisation opportunities. While we have listed a few here in this article, the boundaries of what you can and can’t do are limitless …by giving the user what they want, making what you have appealing, and building a faithful fan base, who can access new content and services, you have a new business model for keeping customers happy and making money. All-in-all a good all-rounder!