2014 Pricing Strategies for Mobile Content Services
At the same time the introduction of Over The Top (OTT) services - which are substituting SMS services in particular - coupled with the rise of the Google Play and Apple App Store – allied with the adoption of Smartphones has loosened the hold of the MNO in offering its own content services directly to their end users.
And MNOs are under increasing pressure to find new sources of revenue to compensate for the pressure on blended ARPU levels and are looking to bundle additional services into their core package in order to add user ‘stickiness’ in terms of loyalty to the operator and so reduce customer churn.
With the rise of the Smartphone device worldwide, mobile devices are used for traditional MNO services including voice, messaging & mobile data, but they can also act as music players, provide social media access, act as TV or video players and provide overall entertainment. With the presence of services provided by non-MNOs - such as Apple iTunes - as well as other OTT companies including Line and WhatsApp, mobile operators have adopted OTT services as a means of providing additional user loyalty over time.
The driving force for the introduction of content services is primarily the pressure on MNO ARPU. The table below illustrates the reduction in blended ARPU over the last 12 months for a selective number of operators:
In some markets, there is supporting data suggesting an increase in mobile entertainment usage which has attracted the interest of a range of mobile operators.
For example, according to figures from ARIA (the Australian Music Charts) in February 2014, music streaming revenues nearly doubled in 2013, making up 5.9 per cent of the total music market in value terms. However, digital download revenue growth slowed and total sales, including CDs, reduced by 11.6 per cent.
In China, the relatively slow penetration of gaming machines, users have been using their mobile phone for Java-based games and increasingly, Smartphones for high resolution games – with as many as two-thirds of 3G Smartphone users playing mobile games.
But in many cases, MNOs are adopting similar generic services – and are in effect partnering with the OTT provider. In mobile music, for example, MNOs are introducing streaming services largely based on Spotify or Deezer 3rd party music services.
In some markets, there is supporting data suggesting an increase in mobile entertainment usage which has attracted the interest of a range of mobile operators.
For example, according to figures from ARIA (the Australian Music Charts) in February 2014, music streaming revenues nearly doubled in 2013, making up 5.9 per cent of the total music market in value terms. However, digital download revenue growth slowed and total sales, including CDs, reduced by 11.6 per cent.
In China, the relatively slow penetration of gaming machines, users have been using their mobile phone for Java-based games and increasingly, Smartphones for high resolution games – with as many as two-thirds of 3G Smartphone users playing mobile games.
But in many cases, MNOs are adopting similar generic services – and are in effect partnering with the OTT provider. In mobile music, for example, MNOs are introducing streaming services largely based on Spotify or Deezer 3rd party music services.
And in mobile social networking, MNOs are bundling the recognised brands including Facebook and in particular WhatsApp – even though arguably the messaging functions of WhatsApp contributes to the cannibalisation of an operator’s SMS revenues
About the Report
This new report includes examples of mobile content pricing from 90 MNOs in 52 countries around the world. It includes a survey of pricing for mobile music, mobile social media, mobile gaming, mobile TV & mobile cinema offered by MNOs worldwide. The report examines the main trends and new content services introduced in the main geographical regions using the unique TCL global pricing database.
Subscription based music
Mobile Music offered as a promotion
Mobile Music bundles as a VAS with postpaid tariffs
Mobile Music offered for free
Mobile Music offered as an own branded music service
SECTION 2: KEY MOBILE SOCIAL MEDIA STRATEGIES
Social Media offered as a bundle
Social Media bundled in tariffs
Social Media offered for free
SECTION 3: KEY MOBILE GAMING STRATEGIES
Gaming packages
Gaming packages offered with tariffs
Gaming packages offered as a promotion
Games offered via a web Portal
Games offered in conjunction with major Game platforms
SECTION 4: KEY MOBILE TV STRATEGIES
Mobile TV bundles
Mobile TV offered as a promotion
Mobile TV offered with tariffs
Mobile TV offered as an App
SECTION 5: KEY MOBILE CINEMA/MOVIE STRATEGIES
Cinema offered via promotions
Cinema/movies offered bundled with tariffs
The TCL 2014 Pricing Strategies for Mobile Content Services report uses the unique TCL pricing database and telecom pricing story archive which includes mobile content pricing from 90 MNOs in 51 countries worldwide. Data for the report was collected during the period from February 2014 to the end of March 2014.
Below TCL has segmented the MNOs covered worldwide into five geographical regions – including by the EU region, by the non-EU countries (Rest of Europe) region, by the Americas region, by the Asia Pacific region & by the Africa & Middle East (AME) region.
Also, there are five types of content pricing surveyed in the report which are detailed in the following five sections in turn:
- Section 1 - Mobile Music content pricing
- Section 2 - Mobile Social Media content pricing
- Section 3 - Mobile gaming content pricing
- Section 4 - Mobile TV content pricing
- Section 5 - Mobile cinema & movie content pricing
For each of the five pricing segments, TCL provides examples of the current content pricing from MNOs in each of the five regions (collected as of March 2014) and also includes a summary of all the pricing covered in each of the five content categories as a table.
All pricing shown is based on published MNO retail rates and includes the applicable taxes or VAT applied in each country unless mentioned differently.
All of the 90 MNOs included in the TCL 2014 Pricing Strategies for Mobile Content Services report are shown in Appendix II.
In the TCL 2014 Pricing Strategies for Mobile Content Services report, TCL analyses MNO pricing for Mobile Music, Mobile Social Media, Mobile Gaming, Mobile TV and Mobile Cinema & Movie services worldwide.
The landscape for mobile content services continues to evolve. Traditionally the MNO has sought to compete in the provision of content service to its users. But with the fragmentation of the market with the arrival of the Smartphone and OTT specialists who focus on digital media and content (including providers as diverse as WhatsApp, Facebook, Google & Spotify) the MNO has initiated a series of partnerships where it provides the mobile content for those providers.
In particular, the MNO is using the name recognition of the OTT brand (including WhatsApp, Twitter & Spotify) to bundle additional mobile music & mobile social media services in with an existing mobile package.
