Business Models for Mobile Content Players: Strategic Options & Scenarios 2007-2012

Published by: Juniper Research Limited

Published: Sep. 1, 2007 - 135 Pages

Table of Contents

Glossary of Terms

Executive Summary

Mobile Content Value Configurations

From Value Chains to Value Configurations

Mobile Content Players

Users’ Expectations of Value are Changing

Mobile Content Business Models

Generic Business Models

Wholesale Business Models

Mobile Content Revenue/Profit Models

From Revenues to Profits

From ARPU to AMPU

The Wholesale Margin Opportunity

Retail Mobile Content Charging Mechanisms

Flat-Rate Charging

Event-Based Charging

On-Portal Charging

Direct-to-Consumer Charging

Wholesale Mobile Content Charging Mechanisms

Scenarios for Mobile Content Revenues

Forecasts

Key Forecast Findings

Mobile Content is not yet Significant to MNOs

The Real Battleground will be Smart Pipe vs. On-Portal

The On-Portal Model is not Dead - Yet

Content Providers will Continue to try to Bypass MNOs

Third Parties may be at Risk

Key Forecasts by Scenario

Table ES1: Total Non-Messaging Mobile Content Revenues, 2007-2012 ($m)

Dumb Pipe Scenario

Table ES2: Global Non-Messaging Mobile Content Revenue Distribution, Dumb

Pipe Scenario, 2007-2012 ($m)

Smart Pipe Scenario

Table ES3: Non-Messaging Mobile Content Revenue Distribution, Smart Pipe

Scenario, 2007-2012 ($m)

On-Portal Scenario

Table ES4: Non-Messaging Mobile Content Revenue Distribution, On-Portal

Scenario, 2007-2012 ($m)

Recommendations for Mobile Content Players

Mobile Network Operators

Mobile Content Providers

Third Parties

1. Mobile Content Value Configurations

1.1 The Mobile Content Value Chain

1.1.1 Controlling the Entire Chain is no Longer Possible

Figure 1.1: The Mobile Content Value Chain

i. Disaggregation is Creating Value Networks

ii. From Value Networks to User-Centric Value Configurations

Figure 1.2: User-Centric Value Configuration Example

iii. Value Configurations will be Application-Centric

iv. Key Functions within Value Configurations

1.2 Critical Success Factors for Value Configurations

1.2.1 Roles and Responsibilities must be Clearly Identified

1.2.2 Partnership Management Systems are Essential

1.2.3 Interoperability to Enable Innovation

1.3 Mobile Content Players

1.3.1 Four Main Categories of Mobile Content Player

1.3.2 The Sticky Issue of Customer Ownership

1.4 The Value Contradiction

1.4.1 Defining Service Provider Value

1.4.2 Defining End-User Value

1.4.3 The Value Contradiction Leads to Reduced Value

Figure 1.3: The Reduced-Value Conundrum

1.5 Reconciling the Value Contradiction: User-Centricity

1.5.1 Mobile Content Availability is Changing User Expectations

Table 1.1: Changing End-User Expectations for Services 3G & Beyond

1.5.2 MNOs are Losing Control of ARPU

2. Mobile Content Business Models

2.1 What is a Business Model?

2.1.1 MCPs Need to Re-Think Their Business Models

2.1.2 Multiple Business Models will Co-Exist

2.2 Generic Business Models

2.2.1 Brokerage

2.2.2 Infomediary

2.2.3 Merchant

2.2.4 Direct-to-Consumer

2.2.5 Outsourcing

2.2.6 Advertising

2.3 Wholesale Business Models

2.3.1 Wholesale is Growing Fixed Operators’ Revenues

2.3.2 Wholesale Could Reverse Mobile Revenue Decline

2.3.3 MCPs Should Consider a Value-Added Wholesale Approach

2.3.4 MNOs Need to Understand Wholesale User Requirements

2.3.5 Three Categories of Value-Added Wholesale Services

2.3.6 Wholesale Services Should be Fully Monetised

3. Mobile Content Revenue/Profit Models

3.1 Revenue Models

3.1.1 The Usage-Based Charging Model Will Decline

3.1.2 ARPU Does Not Reflect Mobile Content Revenues

3.1.3 The Need for a New Revenue Model

3.1.4 The Operator-Push Revenue Model is in Freefall

Figure 3.1: Operator-Push Revenue Model

3.1.5 Wholesale-Pull Revenue Model Can Offset Some Margin Leakage

Figure 3.2: Wholesale-Pull Revenue Model (MNOs)

3.1.6 Increased Wholesale Opportunities for Specialised Third Parties

3.2 Profit Models

3.2.1 Margin Measurement is Critical

3.2.2 The Benefits of Understanding AMPU

3.2.3 The Wholesale Margin Opportunity

3.3 Retail Revenue/Profit Models

3.3.1 Multiple Retail Revenue/Profit Models Co-Exist

i. Basis for Retail Revenue Generation

3.3.2 Retail Mobile Content Charging Mechanisms

i. Flat-Rate Charging

ii. Event-Based Charging

Figure 3.3: Event-Based Revenue Model

iii. On-Portal Charging

iv. Direct-to-Consumer Charging

3.4 Wholesale Revenue/Profit Models

3.4.1 The Role of Mobile Content Wholesale

i. Mobile Content Wholesale is Not Only for MNOs

ii. Mobile Content Wholesale may Improve Profitability

iii. Size of the Mobile Content Wholesale Opportunity

3.4.2 New Wholesale Mobile Content Revenue Streams

i. Wholesale Mobile Content Service Layers

ii. Social Networking: A Threat to Current SMS/MMS Wholesale

iii. The Mobile Advertising Wholesale Opportunity

iv. The Wholesale Mobile Search Opportunity

3.4.3 Wholesale Charging Mechanisms

3.4.4 Wholesale Revenue-Sharing Arrangements

i. MNOs and Content Providers

ii. MNOs and Third Parties

iii. MNOs and End-Users

4. Scenarios for Mobile Content Revenues

4.1 Scenario 1: Dumb Pipe

Figure 4.1: Dumb Pipe Scenario Illustration, 2012

4.2 Scenario 2: Smart Pipe

Figure 4.2: Smart Pipe Scenario Illustration, 2012

4.3 Scenario 3: On-Portal

Figure 4.3: On-Portal Scenario Illustration, 2012

5. Forecasts

5.1 Forecast Approach

5.1.1 What is Included?

5.1.2 What is Excluded?

i. Assumption

5.1.3 Methodology

Figure 5.1: Forecast Methodology

5.1.4 Retail Revenue vs. Retained Revenue

5.2 Forecast Highlights

5.2.1 Mobile Content is Not Yet Significant to MNOs

5.2.2 The Real Battleground will be Smart Pipe vs. On-Portal

5.2.3 The On-Portal Model is not Dead - Yet

5.2.4 Content Providers will Continue to try to Bypass MNOs

5.2.5 Third Parties may be at Risk

5.2.6 Roles and Responsibilities are Poorly Understood

5.3 Mobile Content Subscriber Forecasts

5.3.1 Monthly ARPU per Subscriber

Table 5.2: Monthly ARPU per Subscriber, Split by Voice/Data by Region 2007-2012

5.4 Cellular Market Growth

5.4.1 Introduction

5.4.2 Growth of the Cellular Market

i Global Cellular Subscriber Market

Figure 5.2: Cellular Subscriber Growth (m) by Region, 2005-2012

Table 5.3: Cellular Subscriber Growth (m) by Region, 2005-2012

Figure 5.3: Cellular Subscriber Base, Market Share by Region (%), 2005-2012

Figure 5.4: Cellular Subscribers Penetration (%) by Region

5.4.3 Regional Cellular Market Growth

i. North America

ii. South America

iii. Western Europe

iv. Eastern Europe

v. Far East & China

vi. Indian Sub Continent

vii. Rest of Asia Pacific

viii. Africa and Middle East

5.5 Mobile Content Revenue Forecasts

5.5.1 Total Annual Data Revenues

Figure 5.5: Total Annual Data Revenues ($m) by Region 2007-2012

Table 5.4: Total Annual Data Revenues ($m) by Region 2007-2012

5.5.2 Non-Messaging Mobile Content Revenues

Table 5.5: % Non Messaging Data ARPU by Region 2007-2012

Figure 5.6: Non Messaging Data Revenues ($m) by Region 2007-2012

Table 5.6: Non Messaging Data Revenues ($m) by Region 2007-2012

Figure 5.7: Total Non-Messaging Mobile Content Revenues ($m) by Region, 2007- 2012

Table 5.7: Total Non-Messaging Revenues (End-User Generated plus Adspend) ($m) by Region 2007-2012

5.5.3 Forecasts by Scenario/Type of Player

i. Dumb Pipe Scenario

Table 5.8: Global Non-Messaging Mobile Content Revenue Distribution ($m) by Category of Player, Dumb Pipe Scenario, 2007-2012

ii. Smart Pipe Scenario

Table 5.9: Non-Messaging Mobile Content Revenue Distribution ($m) by Category of Player, Smart Pipe Scenario, 2007-2012

iii. On-Portal Scenario

Table 5.10: Non-Messaging Mobile Content Revenue Distribution ($m) by Category of Player, On-Portal Scenario, 2007-2012

5.5.4 Forecasts by Region

i. North America

Table 5.11: Net Revenues ($m) Forecast Summary by Scenario, North America 2007-2012

Table 5.12: Net Revenues ($m) Forecast Summary by Category of Player, North America, 2007-2012

a. Dumb Pipe

Figure 5.8: Net Revenues ($m) by Category of Player, Dumb Pipe Scenario, North America 2007-2012

b. Smart Pipe

Figure 5.9: Net Revenues ($m) by Category of Player, Smart Pipe Scenario, North America 2007-2012

c. On-Portal

Figure 5.10: Net Revenues ($m) by Category of Player, On-Portal Scenario, North America 2007-2012

ii. South America

Table 5.13: Net Revenues ($m) Forecast Summary by Scenario, South America 2007-2012

Table 5.14: Net Revenues ($m) Forecast Summary by Category of Player, South America 2007-2012

a. Dumb Pipe

Figure 5.11: Net Revenues ($m) by Category of Player, Dumb Pipe Scenario, South America 2007-2012

b. Smart Pipe

Figure 5.12: Net Revenues ($m) by Category of Player, Smart Pipe Scenario, South America 2007-2012

c. On-Portal

Figure 5.13: Net Revenues ($m) by Category of Player, On-Portal Scenario, South America 2007-2012

iii. West Europe

Table 5.15: Net Revenues ($m) Forecast Summary by Scenario, West Europe, 2007-2012

Table 5.16: Net Revenues ($m) Forecast Summary by Category of Player, West Europe 2007-2012

a. Dumb Pipe

Figure 5.14: Net Revenues ($m) by Category of Player, Dumb Pipe Scenario, West Europe, 2007-2012

b. Smart Pipe

Figure 5.15: Net Revenues ($m) by Category of Player, Smart Pipe Scenario, West Europe 2007-2012

c. On-Portal

Figure 5.16: Net Revenues ($m) by Category of Player, On-Portal Scenario, West Europe 2007-2012

iv. East Europe

Table 5.17: Net Revenues ($m) Forecast Summary by Scenario, East Europe 2007- 2012

Table 5.18: Net Revenues ($m) Forecast Summary by Category of Player, East Europe 2007-2012

a. Dumb Pipe

Figure 5.17: Net Revenues ($m) by Category of Player, Dumb Pipe Scenario, East Europe 2007-2012

b. Smart Pipe

Figure 5.18: Net Revenues ($m) by Category of Player, Smart Pipe Scenario, East Europe 2007-2012

c. On-Portal

Figure 5.19: Net Revenues ($m) by Category of Player, On-Portal Scenario, East Europe 2007-2012

v. Far East and China

Table 5.19: Net Revenues ($m) Forecast Summary by Scenario, Far East & China 2007-2012

Table 5.20: Net Revenues ($m) Forecast Summary by Category of Player, Far East & China 2007-2012

a. Dumb Pipe

Figure 5.20: Net Revenues ($m) by Category of Player, Dumb Pipe Scenario, Far East & China 2007-2012

b. Smart Pipe

Figure 5.21: Net Revenues ($m) by Category of Player, Smart Pipe Scenario, Far East & China 2007-2012

c. On-Portal

Figure 5.22: Net Revenues ($m) by Player, On-Portal Scenario, Far East & China, 2007-2012

vi. Indian Sub-Continent

Table 5.21: Net Revenues ($m) Forecast Summary by Scenario, Indian Sub Continent 2007-2012

Table 5.22: Net Revenues ($m) Forecast Summary by Category of Player, Indian Sub Continent 2007-2012

a. Dumb Pipe

Figure 5.23: Net Revenues ($m) by Category of Player, Dumb Pipe Scenario, Indian Sub-Continent 2007-2012

b. Smart Pipe

Figure 5.23: Net Revenues ($m) by Category of Player, Smart Pipe Scenario, Indian Sub-Continent 2007-2012

c. On-Portal

Figure 5.24: Net Revenues ($m) by Category of Player, On-Portal Pipe Scenario, Indian Sub-Continent 2007-2012

vii. Rest of Asia-Pacific

Table 5.23: Net Revenues ($m) Forecast Summary, Rest of Asia-Pacific 2007-2012

Table 5.24: Net Revenues ($m) Forecast Summary by Category of Player, Rest of Asia-Pacific 2007-2012

a. Dumb Pipe

Figure 5.25: Net Revenues ($m) by Category of Player, Dumb Pipe Scenario, Rest of Asia-Pacific 2007-2012

b. Smart Pipe

Figure 5.26: Net Revenues ($m) by Category of Player, Smart Pipe Scenario, Rest of Asia-Pacific 2007-2012

c. On-Portal

Figure 5.27: Net Revenues ($m) by Category of Player, On-Portal Pipe Scenario, Rest of Asia-Pacific 2007-2012

viii. Middle East and Africa

Table 5.26: Net Revenues ($m) Forecast Summary by Scenario, Middle East & Africa, 2007-2012

Table 5.27: Net Revenues ($m) Forecast Summary by Category of Player, Middle East & Africa 2007-2012

a. Dumb Pipe

Figure 5.28: Net Revenues ($m) by Category of Player, Dumb Pipe Scenario, Middle East & Africa 2007-2012

b. Smart Pipe

Figure 5.29: Net Revenues ($m) by Category of Player, Smart Pipe Scenario, Middle East & Africa 2007-2012

c. On-Portal

Figure 5.30: Net Revenues ($m) by Category of Player, On-Portal Pipe Scenario, Middle East & Africa 2007-2012

6. Recommendations for Mobile Content Players

6.1 Overview of Strategic Approach Required

6.2 Recommendations for Mobile Network Operators

6.3 Recommendations for Content Providers

6.4 Recommendations for Third Parties

7. Case Studies

7.1 Action Engine

7.1.1 On-Device Portal Market Development

7.1.2 Mobile Advertising via ODPs

7.1.3 Charging Models

7.2 Blyk

7.2.1 The Blyk Model

7.2.2 Mobile Advertising

7.2.3 Mobile Social Networking

7.2.4 The Role of Wholesale

7.2.5 Revenue Models

7.3 Cingular Wireless (now ATT Wireless)

7.3.1 Off-Portal Market Growth

7.3.2 Revenue Models

7.3.3 Partnerships

7.3.4 Off-Portal Revenue Streams

7.4 Comptel

7.4.1 The Threat to MNOs

7.4.2 Emerging Mobile Content Business Models

7.4.3 Mobile Content Billing Models

7.4.4 Revenue Models

7.5 JumpTap

7.5.1 Business Models

7.5.2 Mobile Advertising Market Drivers

7.5.3 The Wholesale Opportunity

7.5.4 Revenue Models

7.6 mBlox

7.6.1 Mobile Content Revenue Models

7.6.2 The Role of Wholesale

7.6.3 Enablers for Wholesale Market

7.6.4 MNO Wholesale Revenue Upside

7.7 Mobile Cohesion

7.7.1 Wholesale Market Development

7.7.2 Development of Value Networks

7.8 NewBay

7.8.1 Development of Mobile Social Networking

7.8.2 Mobile Social Networking Market Drivers

7.8.3 Mobile Social Networking Players

7.9 O2

7.9.1 Market Structure

7.9.2 Revenue Models

7.9.3 Business Models

7.10 Valista

7.10.1 Off-Portal Market Development

7.10.2 Revenue Models

7.10.3 Development of Wholesale

Abstract

This detailed report provides strategic planners in mobile content organisations with current and future total nonmessaging mobile content revenues. The in-depth study is backed up with pertinent research from interviews with key industry players and focuses on one of the industry’s most important debates: how will the sharing of nonmessaging mobile content revenues evolve by 2012, and who is likely to retain what portion of those revenues? To answer these questions, this forward looking report explores three different business model scenarios: Dumb pipe; On-portal; and Smart pipe, while providing a crucial analysis of the various strategic options available to optimise organisational profitability.

Key Questions Answered by this Report:

• What will be the size of the non-messaging mobile content (NMMC) market by 2012?
• How will the sharing ofNMMCrevenues evolve by 2012?
• What types of business models will emerge forNMMC?
• Which types of mobile content service provider are likely to profit most from theNMMCmarket by 2012?
• How will the type of business model affect the size of revenues available toNMMCproviders?
• What types of business-to-business or wholesale revenue models will generate the highest revenues by 2012?
• Which types of user-centric value configuration will be most important by 2012?

Main Benefits:

• A unique source of research, analysis and information for the business models for mobile content market including technologies, market characteristics and forecasts.
• Practical analysis of the emerging opportunities available to vendors and operators.
• Unique insights: includes interviews with leading industry players who have significant experience in the business models market.
• Benefit from fresh thinking and an intelligent market assessment from a respected thought leader.

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