Monetising Mobile 2: Accumumulate

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Andreas MacMahon of Accumulate discusses the market for pre-loaded mobile content in emerging markets. This presentation was given at ME's Monetising Mobile conference in September 2010.

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Monetising Mobile 2: Accumumulate

  1. 1. Monetizing Mobile Maximising revenue through preloads
  2. 2. About Accumulate UK Ltd. <ul><li>Mobile service provider focused on retailing </li></ul><ul><li>Core offering – Flexion - empowers retailers to generate more revenue from content and services </li></ul>
  3. 3. What is Flexion? <ul><li>“ Flexion gives the retailer full control of pricing, license and distribution models …” </li></ul><ul><li>… or to put it differently… </li></ul><ul><li>… the death of the one price fits all model… </li></ul>
  4. 4. Why use Flexion? <ul><li>The Gap... </li></ul><ul><ul><li>80%-100% of customers have at one time or another played a mobile game but around only 5% buy. </li></ul></ul><ul><li>The Challenge... </li></ul><ul><ul><li>How do we grow the market for mobile games and apps without resorting to price and revenue reductions? </li></ul></ul><ul><li>The Solution... </li></ul><ul><ul><li>Flexion bridges the gap </li></ul></ul>
  5. 5. Setting the stage <ul><li>A large majority of customers in Asia use pre-pay </li></ul><ul><li>Many of these have low credit </li></ul><ul><li>Low credit is not just a result of “customers don’t have money” </li></ul>
  6. 6. So, the basic situation is thus something like… <ul><li>Many customers who want to use games or apps </li></ul><ul><li>Many of these can’t do that, either because of … </li></ul><ul><ul><li>A) data charges mean they can’t find or download games or apps </li></ul></ul><ul><ul><li>… or… </li></ul></ul><ul><ul><li>B) low credit means that many of the one’s that can fail their purchases </li></ul></ul>
  7. 7. Sound familiar? <ul><li>This is not an “Asian” problem </li></ul><ul><li>It’s just the age-old problem of prepay </li></ul><ul><li>Same patterns in any market with prepay customers </li></ul><ul><li>So, the same problems as in e.g. the UK </li></ul><ul><li>This means we can use the same solutions too </li></ul>
  8. 8. So, what do we do then? <ul><li>Option A: </li></ul><ul><ul><li>Zero rate all data (not viable) </li></ul></ul><ul><ul><li>Charge peanuts for the content (not likely unless you’re a philanthropist) </li></ul></ul><ul><li>Option B: </li></ul><ul><ul><li>Take the market conditions as given </li></ul></ul><ul><ul><li>Find new ways of distributing and charging for your content </li></ul></ul>
  9. 9. The Flexion flavour to Option B: <ul><li>Preloading of full versions with in-/on-application billing </li></ul><ul><li>Demos won’t really work… </li></ul><ul><ul><li>… ease of purchase… </li></ul></ul><ul><ul><li>… the demo experience being sufficient… </li></ul></ul><ul><ul><li>… most importantly : demos don’t solve the two core problems </li></ul></ul>
  10. 10. So, preloads it is then… <ul><li>Yes, but without creating more work for the value chain </li></ul><ul><li>Bespoke builds with in-app billing are tricky on account of… </li></ul><ul><ul><li>time to market, a device won’t wait </li></ul></ul><ul><ul><li>bespoke development & testing </li></ul></ul><ul><ul><li>not letting stakeholders play to their respective strengths </li></ul></ul><ul><ul><ul><li>Should a publisher/content provider really also have to focus on billing? </li></ul></ul></ul><ul><li>The obvious solution: use a content agnostic wrapper solution with billing out of the box (no surprises there…) </li></ul>
  11. 11. The story so far… <ul><li>Use preloads, try and buy and multiple pricing options to: </li></ul><ul><ul><li>Maximise distribution – games are available to any customer </li></ul></ul><ul><ul><li>Maximise revenue – get more customers engaged and more of them spending </li></ul></ul>
  12. 12. One more thing… <ul><li>Preloads need a device to sit on </li></ul><ul><li>Preloads can end up on a device in four ways: </li></ul><ul><ul><li>Factory (OEM) </li></ul></ul><ul><ul><li>Factory (Operator variants) </li></ul></ul><ul><ul><li>Distributors (Flashing) </li></ul></ul><ul><ul><li>Virtual preload (e.g. SD card) </li></ul></ul>
  13. 13. What about that “one thing”? <ul><li>A lot of the devices sold through operator channels are open market handsets </li></ul><ul><li>The operator variant route, normally the simplest path, is not always open </li></ul><ul><li>Getting games on to operator devices also means getting on board with OEMs </li></ul>
  14. 14. OEM preloads <ul><li>Requires more from the solution </li></ul><ul><li>OEMs build regional or even global variants </li></ul><ul><li>“ One file fits all” </li></ul><ul><li>The preload solution thus needs to be able to handle: </li></ul><ul><ul><li>Billing </li></ul></ul><ul><ul><li>Payment flows </li></ul></ul><ul><ul><li>Pricing </li></ul></ul><ul><ul><li>Rules and governance </li></ul></ul><ul><ul><li>Localisation </li></ul></ul>
  15. 15. Isn’t the number of OEMs limited? <ul><li>“The old guard” OEMs: YES – in reality only a handful of players </li></ul><ul><li>Regional/local OEMs: NO… </li></ul><ul><li>40+ and counting… </li></ul><ul><li>Good device coverage in Asia means covering all OEMs, not just the “old guard” </li></ul>
  16. 16. In conclusion… <ul><li>If you want a profitable preload programme, then you need to… </li></ul><ul><li>Use a horizontal approach when working with OEMs on a global or regional level to maximise distribution </li></ul><ul><li>Use Try and Buy to maximise discovery and initial uptake </li></ul><ul><li>Use multiple pricing models to work around the issue of low credit customers and maximise penetration and revenue </li></ul>
  17. 17. What do you do as a content provider or publisher? <ul><li>Don’t reinvent the wheel – the solutions already exist </li></ul><ul><li>Focus on your core business – keep creating quality products </li></ul><ul><li>Outsource the headache – work with leading enablers </li></ul>

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