Mobile operator share of content market plummets, but direct carrier billing offers $13 billion revenue opportunity by 2017
Operators have practically relinquished any hold on the content market according to a new report. However, they are able to make up for lost content revenue through direct carrier billing opportunities.
Revenues from mobile content, monetised through direct carrier billing, is expected to rise from $2 billion last year to more than $13 billion by 2017, according to a new report from Juniper Research.
The report observed that operator storefronts and portals now accounted for just 6% of content downloads worldwide, with Google Play and Apple's App Store now comprising nearly 70% between them. While Google has surpassed Apple in terms of app downloads on an ongoing basis, monetisation levels of Android apps are markedly lower, the study showed.
Indeed, the report noted that the increasing popularity of over the top stores had led to many operators closing their own storefronts. However, it found that by offering carrier billing to third party storefronts, operators could more than offset the continued decline in portal revenues.
According to the report, storefronts which have already integrated carrier billing solutions have seen a five to six times increase in conversion rates compared with credit card billing, together with an uplift in average transaction values.
Furthermore, it observed that the implementation of carrier billing allowed storefronts and developers to monetise unbanked or underbanked regions and demographics for the first time.
As report author Dr Windsor Holden pointed out: 'While many operators have now abandoned the own-brand storefront approach, by leveraging their billing relationship with the end user they can retain a foothold in the content play. Simply by offering consumers a billing choice, monetisation rates will rise dramatically.'
However, the report cautioned that carrier billing for higher value content would be less effective amongst prepaid users given the relatively low top up levels in most markets.