How to become a content provider

Internet business

OR TIME TO ORDER MUSIC

More recently, goods such as pictures and ringtones for mobile phones simply did not exist, but in the past three years they have become very widespread.

“The final stage in adapting a product to a market is to adapt the market to a product.”

Clan james

According to experts, last year the market for additional services reached approximately $ 290 million. In its structure, the share of pictures and melodies was 58%, information and entertainment services - 17%, games - 6%, media integrated projects - 9%, dating and communication - 10%. This year, pictures and melodies, of course, still will not give up positions, but an increase in sales of java games, as well as the active development of media-integrated services and WAP services, are forecasted.

Among the companies that provide mobile content services, the most successful companies were i-Free, Infon, Jippi, Inform-Mobile, Nikita Mobile, Next Media, SMS Media Solutions. They currently “own” about 70% of this market

CONTENT IN RUSSIAN

The market of content providers in Russia has paradoxical properties - it is not oversaturated and at the same time cannot boast of diversity. We have very few companies that can expand the usual range of services such as pictures and melodies. Perhaps more obvious changes will come when content providers begin to offer consumers audio and video, including their own production.

It should be noted that many large players are involved in the Russian business of additional services. Firstly, these are mobile operators that provide billing and transportation services: VimpelCom, MegaFon, MTS; at the regional level - Volga-Telecom, Yeniseitelecom, SMARTS, Uralsvyazinform. Secondly, media companies that post information about services and content companies. Thirdly, content providers selling interactive products or services.

At the dawn of its development, this business did not require large investments. A few years ago, a simple advertisement in the offices of a mobile operator was enough for a surge in requests for services. At the same time, beginning content providers did not have any special difficulties with the technical support of their business. Often they began to work on platforms of their own production, gradually upgrading them. However, at present, only initial investments in equipment for serious work of a content provider in Russia amount to about 100 thousand dollars, of which approximately 25% goes to software. However, the largest expense item is advertising, especially on television; these costs can range from 80-120 thousand dollars to 800 thousand dollars per month.

However, according to the acknowledgment of our knowledgeable source, who wished to remain anonymous, this version of advertising is so popular that "on every channel there is already a queue of content providers for service." On MuzTV and MTV channels, no one is surprised at the running line with the clip code, which is displayed on the screen, as well as with the short number to which this code can be sent to receive a ringtone. Placement of announcements in the press, however, can also bring the desired effect, especially with regard to advertising melodies and logos. There are also special projects created to promote this content in the youth masses. For example, the ProTelephone magazine of the SPN Publishing House, most of which is occupied by picture galleries and ringtones.

The share of various services (by groups) in the structure of the mobile content services market for mobile subscribers

CONTENT INCOME

Any company that sells mobile services has three main revenue items: from the sale of content (specific games, ringtones, pictures, etc.), services (various services, for example, SMS flirting, voting, quizzes, tests), from development software and creative interactive solutions (creating a service or interactive programs, conducting market research, creating software, testing and supporting it in the process). For medium and large content providers, the sale of content and services brings up to 80% of the revenue, creative development and technical implementation of mobile services - no more than 20%. However, there are no general patterns. For example, there are such providers who sell only content or games, but do not do creative work in principle.

Java games and java services are a separate area in the sale of content. The fact is that in modern phones and smartphones can download third-party programs and games through the infrared port, via cable or gprs. Large game manufacturers are ready to take advantage of this, mainly western ones (famous giants, such as Astraware, Elkware, Sumea), but there are domestic ones (Reaxion, JoyBits, NewGround, NET Lizard, Mobile-Games.ru, Next Media, Infon, i-Free ) There are two models of financial interaction between content providers and copyright holders - a one-time license fee or royalty payment. Games of the first category, for example, brands with the name of series or films, are expensive, royalty rates are very high, but due to mass sales, providers can even agree to such conditions, up to leaving only 5% of the sale price. Games of the second and third categories can bring more money, but image games (representing advertising products or brand advertising, for example, the Dixis Adventure game (developed by JoyBits), which is published by the digital equipment sales network, Dixis, can be distributed for small money or completely free.

Services are usually sold by content providers through various SMS services. The most popular, of course, are SMS games (for example, Piranha, Fight Club, etc.) - each provider has from one to a dozen such games, and their development is most often carried out on their own, on the side rarely buy something. Their attractiveness for the content provider lies in the length of the game process: per month, an active user can spend only 10-15 dollars on SMS messages, which is equivalent to the average ARPU for the subscriber base of a large mobile operator. The SMS dating services are also quite profitable - since finding a partner is an eternal topic, you can always make money on it. In addition to banal search by criteria, interactive SMS chat functions are also added to such systems, which significantly increases paid traffic.

One of the options for “marketing” services is selling them through IVR services. They are voice versions of popular services, such as dating services and all kinds of help services. Psychological tests and erotic "hot conversations" are also popular. Most often the “iron aunt” communicates with the user, which the user controls by using the telephone keys. This is especially convenient for those users who are accustomed to perceive the necessary information by ear. The option of communicating with a live operator also exists, but it costs more (about a dollar per minute versus $ 0.5 in the case of a “conversation” with a computer) and is usually used on complex services - psychological assistance, legal advice, etc. It should be noted that the creation of such services is quite an expensive pleasure, Solvo International is the leader in this market, it produces IVR services on its own. The rest, and almost all companies in the Russian market, have IVR products purchased.

CONTENT PROJECTS

The market of content projects, no matter what the players say, is closed and tightly regulated. In Russia, aggregator companies are just starting to expand their activities - the essence of their work is that they collect interactive services from various small and medium-sized manufacturers and offer them to mobile operators as a single package. However, the development of such companies will require several more years. Now, for small companies producing up to 20 services with a turnover of up to $ 50, 000 per year, according to market participants, there is “nothing to catch”.

Content providers of any level sometimes have problems with business contacts with mobile operators. Only the cost of renting one short number (for example, 6464 or 4446, etc. - so that the subscriber can remember it) can reach up to 15 thousand dollars a year, but it can be paid back. Most of all, content providers are nervous about the need to coordinate advertising with operators - to provide materials 1.5-2.5 weeks before the launch of each new project. If we recall that the launch of new services can occur with a gap bukhno in days, then this is a somewhat inadequate requirement. But content providers who do not comply with these deadlines are subject to severe fines, the amount of which can reach the revenue from a number per month.

Almost every medium and large content provider has its own department of advanced developments, which offers new services for implementation. The same department is considering the possibility of buying or promoting “third-party” services. To make such a decision, it is necessary to know whether these services are in demand by the market and whether there is a technical possibility of user support for the technology. Next, you need to understand if the operator has enough resources to support these services and whether he will be able to bill users correctly.

If we consider the situation from the point of view of a small company, a content producer, then the term for proposing your idea to a mobile content provider is very long and rarely takes less than a quarter. The fact is that at this stage in the development of the market, any launch of the service passes through the mobile operator, which decides whether it is worth it. Unfortunately, Russia has not formed a system of content aggregators that would buy numbers, and then deal with their sale and maintenance. The operators themselves are involved in connecting services (as well as checking for compliance with their legal requirements) and they themselves inform subscribers about them.

It should be noted that mobile operators fundamentally do not like services that even theoretically can help the user pay for any services using a mobile phone. If the seller of content services just stutters that “users will pay via SMS”, such services are instantly disabled, and the provider himself is subject to a fine. The fact is that no one wants to risk a license - operators can provide communication services, not financial services. Therefore, there are no services in the Russian market and in the near future there will be no services in the description of which the term “payment by mobile phone” would appear.

Maxim BUKIN

Source: Business Review Magazine No. 3/4 2005

* The article is more than 8 years old. May contain outdated data