Operators Focus On Content Revenue Prize
Carrier billing is set to play an increasing role in digital content transactions, with operators eyeing content revenues, while the likes of Apple are branching out in the market, Juniper Research has found.
Juniper expects that digital content transactions paid for by carrier billing will reach US$47 billion by 2020, up substantially from 2015’s total of just under US$11.3 billion.
According to the research, carrier billing solutions could apply to a number of different environments, potentially becoming a key means of monetising content from connected cars to in-flight infotainment.
Juniper states that the decision by Apple “to test carrier billing in Germany and Russia is likely to herald a substantial number of further deployments in the medium term”.
The research also argues “that the move will be essential if Apple is to monetise unbanked owners of refurbished devices in emerging markets, who would otherwise be limited to paying for content via iTunes gift cards”.
Daily or monthly carrier bill spend set at low-level limits, designed to minimise exposure to fraud or compensation claims, is, however, counterproductive, the research found.
“If you have a daily spend limit of $20 in place, consumers are severely constrained in the amount of content they can purchase, particularly given the fact that many content bundles, such as Clash of Clans gems bundles, are priced at close to this level,” research author Dr Windsor Holden commented.
“Any savings from customer care time spent dealing with inappropriate or unauthorised purchases can more than offset by customer care time spent on failed purchases.”
The majority of payments (69 per cent by value in 2020) will continue to be made via debit and credit cards, however other payment mechanisms, including PayPal, are likely to experience significant growth.
According to the research, this would also remain the case for mobile device-made purchases, which are increasingly being used by consumers to pay for higher-value content, subsequently consumed on connected TVs or games consoles.