Editor’s Note: Welcome to our Monday feature, Analyst Angle. We’ve collected a group of the industry’s leading analysts to give their outlook on the hot topics in the wireless industry. In the coming weeks look for columns from Jupiter Research’s Julie Ask, Current Analysis’ Avi Greengart and iGR’s Iain Gillott.
I was never very good at Ski Ball. I appreciated the concept, admired my peers who managed the roll with clinical accuracy, but if I had any hopes of earning enough tickets to get a paddle-ball or a yo-yo when we left the arcade, I needed to head straight to the Whack-a-Mole.
Growing up, going to an arcade-which is what you do in Ohio-I remember wondering why anybody who was there would play one of the games that didn’t spit out prize-earning tickets. To me it seemed simple: You could either pay to play a game that, though fun, gave no physical fruits to your labor, or you could invest your time and tokens in a ticket-yielding challenge that brought greater meaning to your play. I’d always go for the tickets: prizes are compelling.
In a related way, I guess I’m not surprised by the dramatic successes we’ve seen in premium SMS (PSMS) contests, where wireless subscribers play a game or enter a contest through SMS messaging that has an added fee associated with it which winds up on their bill. PSMS contests are one of the most unique media phenomenons of our lifetimes: a pay-to-play, prize-awarding economy where you can test your wits against thousands of players, all from the convenience of your optimal, personal gaming spot: for me, Chicago’s Brown Line train at about 7:00 AM.
People like to win, yes. But people love to win things. In that way, the arcade choice is not that different from premium SMS content. Indeed, today’s premium SMS contest providers seem to me to be doing a great job of attracting hopeful winners and garnering a not-insignificant share of wallet, in the process.
Just as fascinating to me is that the market for premium SMS contests itself brings forth new players every quarter. At Nielsen Mobile, we analyze mobile content transactions through the world’s largest telecommunications bill panel, representing more than 20,000 wireless accounts that represent 40,000 unique wireless numbers across the top five U.S. carriers. When new data are processed, we wait with bated breath to see the varied, and sometimes personally addicting, PSMS contests that have popped up in the recent weeks.
This quarter has been one of my favorites. Leading the pack in premium SMS contests in quarter three was an offering called Bid4Prizes from New Motion Inc. New Motion has created an addictive little concept where I can play a pretty high-stakes variation on pick a number with, they say, hundreds of thousands of other members. It’s similar to a concept Limbo Inc. brought to market not long ago. At $9.99 a month for a premium subscription to Bid4Prizes over SMS, or in a free web-based version subsidized by online and SMS advertising, how can I afford not to bid? My wife might disagree-but not once I bring home that Macy’s gift card for the holidays.
According to Nielsen Mobile’s Premium SMS Report, Bid4Prizes took in a staggering 50% of the revenue within its segment of the PSMS market in the third quarter. We group premium SMS contests in a premium SMS segment that includes other consumer participation offerings such as sweepstakes, TV participation and charitable giving. According to the same report, Bid4Prizes accounted for 11.8% of the transactions within this segment last quarter, reaching more than a million unique users.
In a segment prone to “hits,” Bid4Prizes was last quarter’s hit. So of course I had to give it a shot, for business reasons, really.
I think I underestimated my competitive set. If you haven’t yet played, the general concept of Bid4Prizes is to pick a number, any number, and hope that you have submitted the lowest unique number out of the thousands of members playing-with some guidance as to where the current “lowest unique number” falls. Upon entering my first, and I thought very unique, number of 27,117 for some holiday cash, I was politely told “nice try;” fourteen other bidders had already submitted that same not-so-unique number. So I moved on. 28,192; 27, 993; 27,994: taken, taken, taken.
I couldn’t stop. And apparently others couldn’t either. Twenty-five guesses and about as many minutes later and I was not, in fact, one Macy’s Gift Card richer. Sorry, Honey. Time to get back to writing my column.
Though Bid4Prizes had a remarkable market share in premium SMS contests in Q3, there were other important players as well. We continued to see transactions for Game On by 2way Traffic this past quarter. This text scramble game pulls in $9.99 a month at AT&T and $0.99 a game at other carriers. I gave it a shot and received the letters “ABENS,” hardly the challenge I expected at $0.99, and not personally as addictive as Bid4Prizes became, but we’ll see if I bring home the Game On grand prize. In terms of new PSMS contests, we’ve started to see transactions for TMG’s HHTrivia.com, TMG’s Thumbcircus.com, and Predicto Mobile as well.
Collectively, I believe these contests are contributing to a shift in the pricing models around premium SMS. Thanks to PSMS contests such as these, offering higher-ticket subscription models beyond $0.99, the average price paid for the consumer participation, campaign category premium SMS offering in the third quarter was $2.27, up from $1.02 in Q1. More broadly speaking, these types of campaigns have helped this particular segment move from 13% of the total premium SMS revenue in Q1, to 18% in Q3.
Nowhere is the unsettled but rapidly evolving landscape of mobile media more apparent to me than in the premium SMS space; and within that segment, the campaign market for games such as Bid4Prizes is both personally and economically compelling. I’m pleased to see the premium SMS market moving to a stronger subscription market. At the same time, it’s in some ways encouraging to think that those kids, old and young, who might once have been paying $10 to play Ski Ball for 30 minutes for a whoopee cushion might now be paying $10 to play a logic games for a Mercedes.
Whack-A-Mole, though. That one may still be compelling.
Please e-mail Jeff at jeff.herrmann@nielsen.com or RCR Wireless News at rcrwebhelp@crain.com.
