Wireless industry trade association CTIA is hoping to spur direct-to-consumer revenues by expanding the industry’s short-code program.
The industry group, along with short-code administrator NeuStar Inc., announced open registration for six-digit short codes. Wireless subscribers can access content or services by sending a key word or phrase to a short code, which today consists of only five digits.
The move allows businesses more flexibility in creating memorable short codes-a music label could use the code HIPHOP, for instance-and increases the number of available codes tenfold.
“There were some limitations around (five-digit codes) primarily with people who wanted a boutique number because it matched” their company name or brand, said Jay Emmet, president of the Americas for mBlox Inc., a California-based company that provides mobile data and billing services. “The reality is, making more numbers available gives marketers greater latitude and choice to match a brand name or pick (a short code)” that can easily be remembered.
Third-party companies encourage users to send a message to short codes to join chat services or subscribe to content offerings. VeriSign Inc.’s Jamster, among others, has generated substantial revenue in the last two years by marketing its short-code-based service on the Internet and youth-targeted media outlets such as MTV.
But some observers say that just as text-messaging uptake has lagged in the United States, consumers have been slow to embrace short codes. One recent study commissioned by startup Zoove Corp.-which markets the competing “StarStar” service-found that only 47 percent of mobile users know how to send a text message to a short code, and 85 percent of those users found the process too difficult or time-consuming for practical use.
“The original thought was that mobile-originated (short-code usage) would be a huge opportunity for brands and content providers to have consumers interact with them,” said Tim Jemison, Zoove’s chief executive officer. “But it is nowhere near the level that anybody in the marketplace thought it would be.”
Indeed, even staunch supporters of short codes concede uptake in the United States has failed to live up to overly optimistic forecasts of several years ago-much like nearly every other wireless data application on the market. While short codes have gained widespread acceptance in Europe, where text messaging is far more common, several factors have hindered the market here, according to Atte Miettinen, chief marketing officer for End2End ApS, a Danish provider of content management and messaging services.
“We’ve seen significant growth in the interest in SMS short codes (in Europe),” Miettinen said. “In the U.S., we’ve seen a lot of interest, but I think there have been issues holding back the development of the market. In the U.S., the operator wants to be in full control over what’s happening.”
The rise of off-deck activity seems to be spurring short-code activity, however. According to M:Metrics, 1.2 million subscribers used short codes to access mobile images in April, and 1.7 million consumers downloaded a ringtone via a short code. Emmett estimates short codes generated $50 million to $75 million in May alone.
Such activity is bound to increase as big media companies and well-known brands employ short codes in mobile marketing campaigns. A cost-conscious user may not be willing to pay a few dollars for the latest ringtone from Eminem, for instance, but might be eager to use a short code to receive free promotional materials from the artist. And although subscribers eventually may turn to WAP or other technologies to discover and purchase content, short codes will likely continue to serve as the delivery and billing mechanism.
For now, though, interactive campaigns on radio and television shows continue to spur the use of short codes. More than 15 million consumers-8.3 percent of all U.S. wireless subscribers-used their handsets to participate in such polls in April, according to M:Metrics. By contrast, fewer than 14 million used their phones to access mobile e-mail, and only 12 million send wireless instant messages.
The Fox Broadcasting Co.’s “American Idol,” which is largely credited with launching the first successful short code-based voting campaign several years ago, generated an astounding 64.5 million text messages throughout the show’s 2006 season. Other shows have gained traction with similar polls, using wireless to create new revenue streams as they build brand recognition and increase viewer loyalty.
So while usage of short codes may lag the sky-high projections of several years ago, Emmet scoffs at the idea that the five-digit codes have failed to gain mass-market usage.
“This is a $500 million market that 18 months ago did not exist,” said Emmet. “Would we call that a lack of traction? I don’t think so.”
