You can call it off-deck, off-portal or off-network, but the stampede of companies looking to sell content directly to consumers is unquestionably on.
Off-deck activity has long dominated the wireless market in Europe, where a lack of garden walls has encouraged subscribers to use short codes and browse Internet storefronts for mobile content. But U.S. carriers generally have been loath to allow users to go directly to content providers for ringtones and other goodies, preferring to control transactions by packing offerings on already-crowded decks.
Those attitudes are evolving, though, as major media companies aggressively target mobile users directly. Off-deck activity has increased dramatically in the last 18 months, analysts say, as mobile-content purchasers aren’t hesitating to bolt outside the crumbling walls. The Yankee Group estimates the U.S. market for off-deck content will exceed $700 million this year.
“In the U.S. right now, off-net revenue is about 20 to 25 percent of the total dollar volume of premium content today,” said Steve Shivers, general manager of OpenMarket at Qpass, a division of Amdocs Ltd. “If you look anywhere else in the world, the ratio is much higher.”
Amdocs hopes to tap the booming off-deck market with a Web-based offering targeting media companies looking to build direct-to-consumer Internet storefronts. The product, dubbed OpenMarket Exchange, is designed to support digital purchases and minimize revenue leakage from third-party transactions.
The technology was built by Qpass, a Seattle-based developer of billing software Amdocs acquired earlier this year for $275 million. The offering is designed to minimize losses that can occur when content providers sell wares directly to consumers but use operator statements to bill users. Such a convoluted business model can lead to problems regarding charge-backs, late payments and customer refunds, Shivers said.
“The media companies (with active storefronts for mobile content) are not only getting paid late, they’re sometimes receiving only 70 or 80 percent” of the revenue they’re due, he explained. “Many media companies that would otherwise be ready and eager to invest in the mobile channel are still sitting on the sidelines” because of such issues.
But while some may be dipping their toes in the water, others have jumped in headfirst. InfoSpace Inc. is the latest entrant—or re-entrant—to go directly to wireless content users. The company launched Moviso.com, an Internet storefront hawking ringtones, graphics and games from partners including Universal Pictures, Getty Images, Warner Music Group and EMI Music. Content is available at tiered subscription levels or a la carte, and is available though every Tier 1 operator except Verizon Wireless, which is the least receptive of the major carriers to third-party content.
The site takes its name from a ringtone company InfoSpace acquired three years ago, and its design is similar to Yourmobile.com, a little-known direct-to-consumer storefront run by InfoSpace. The company said the site will become more than just a ringtone retailer, though: InfoSpace hopes to expand the offerings by leveraging its success in mobile and online search services, and the company—like many other content providers—is working to bring community-based offerings to the site.
“The site is really designed to give customers freedom and control to personalize their device,” said Jon Nolz, director of marketing at Moviso. “Offering (community-targeted features) gives you a way to provide profiles and create stickiness.”
The Fox network was one of the first mainstream media companies to jump onto the direct-to-consumer mobile content playground. The News Corp. company launched Mobizzo.com earlier this year, selling ringtones and images from popular franchises including The Simpsons and Family Guy.
While Fox’s storefront and InfoSpace’s site may have remarkably similar names, the companies’ marketing strategies are strikingly different. Fox is aggressively pushing viewers to its site with online ads and primetime TV commercials, while InfoSpace is looking to less traditional methods to draw traffic.
“We’re going to have viral marketing, guerrilla marketing and grassroots marketing programs,” Nolz said. “Your typical TV (commercial) is not your best way” to reach mobile content consumers.
While that may be true, the contrasting strategies underscores what may be the biggest hurdle most off-deck content providers face: how to market on a shoestring budget. Blockbuster media brands such as Fox and Disney will have no trouble spending their way onto a consumer’s radar screen, but smaller players must rely on less expensive methods and more compelling content.
Kargo, a New York-based content provider, is hoping to lure consumers to its FeverMobile site by offering exclusive content such as voice tones from comedian Gilbert Godfried and ringtones from the late reggae icon Bob Marley. Like InfoSpace, Kargo plans to use unconventional marketing methods to raise awareness of the site, which is currently being beta-tested.
“The big question is how innovative are you in terms of coming up with a really interesting way to reach your consumers? That’s the challenge,” said Harry Kargman, Kargo’s chief executive officer. “Somebody will get it right, whether it’s me or somebody else. Hopefully, it’ll be me.”
