Content Providers to Gain More Control Over Pricing as Demand Rises for Mobile Media and Entertainment

(Business News & Technology News, 14 Feb 2008)

Mobile network operatos (MNOs) still dominate the mobile media and entertainment (MME) value chain, but content providers are likely to gain greater control of end-user pricing and the customer relationship as the market develops and consumers demand more innovation, according market researcher firm Analysys.

"MNOs are certain to resist this trend," says Andrew Parkin-White, Principal Analyst at Analysys and co-author of Mobile Market Perspectives 2008 (A summary of recent research into the evolving mobile market). "Revenue-share arrangements for most services are highly complex and, once the MNO takes its share, the remaining revenue is often divided among many content providers, making it difficult for them to achieve viable revenue streams."

Parkin-White says pricing of MME services continues to be too complex, often confusing consumers and inhibiting service take-up. "MNOs aiming to be more than bit pipes, and looking to achieve crtical mass in the MME market, should abandon usage-based data charges," he argues.

He believes that bundled offerings with fixed prices are likely to become the norm for most MME services. Device manufacturers are also active in the MME value chain and are promoting the growth of off-portal services. "Two good examples of this are Nokia's establishment of an MME system around its Ovi platform and Apple iPhone's new model for revenue sharing between carrier and handset provider," Parkin-White explains.

Parkin-White says a number of online service providers have the potential to be very disruptive in the MME value chain, among which includes Google, which has made numerous forays into mobile advertising and has acquired several mobile media platforms and networking sites.