ShareContent with your Content Billing?
Everyone is in attendance! Traditional telcos, large cable companies, wireline and wireless operators of all sizes et al have jumped into the content bandwagon.
The advent of low–cost technologies like WiMax has diminished the entry barrier, thus paving the way for new service providers joining the ‘gold rush’, especially in the global mobile content services market. This market alone, according to Informa Telecoms and Media, will reach $150 billion by 2011, from the current $3.4 billion.
Now, the key for differentiation for these Value Added Service (VAS) providers are the type of content services they are going to offer and the mode of billing they are going to choose for their services. Following the traditional business model, if they decide on flat-rate billing, they will not need very sophisticated billing systems – ideally, they can manage with minimal impact on their existing OSS/BSS systems in this case. But at least in the long-term perspective, flat-rate pricing does not seem to be a good bet for the VAS providers, if they are trying to drive up profit margins and focus on core competence.
Let us get into the nuances of these new age services. Firstly, the operators need to get into innumerable relations (agreements) with content providers, and sometimes even more than one partner for the same service. The second aspect pertains to the revenue settlement model. Unlike the traditional interconnect scenario, the settlement between these players follow a different mode altogether. Unlike voice calls, content transactions could be of higher value. The existing tariff structures are designed to support access charging, and are incapable of differentiating content and supporting the price diversity it demands.
There were days when the operators had control over content service delivery. They fixed the fees to be charged per unit of content and also managed provisioning, pricing, billing, collections and all related back–office processes. As operators started to roll out content services to their customers, they began to charge these services in an ad hoc manner. This created havoc in the industry, since there were several reported instances, wherein telecom authorities like the US Federal Communications Commission (FCC), Singapore Infocomm Development Authority, Australian Competition and Consumer Commission (ACCC) and customers cornered Tier 1 operators, accusing them of inconsistency in charging their content service offerings. Adding to the chaos were the content value chain players, who were ready to get into a scuffle with the operators to enhance their revenue share for the content services offered. On the other hand, operators lost millions of dollars every year due to outdated billing systems, which were not capable of handling large volume of subscriber billings, downloads and SMS requests for the VAS.
Portio forecasts that the revenue share for operators from content services is likely to fall approximately 30% in 2011, due to the increasing pressure from aggregators and the emergence of big content owners. It also expects that the share of content aggregators would grow to 40% in 2011 and reports a higher share of the revenue for premium VAS for the content aggregators and owners in advanced markets already.
Ownership of content delivery is now shifting to the content providers and mostly to aggregators, who have the technological capability. Operators, who have acknowledged the need to bill these new services accurately for their customers, have started seeking the support of content aggregators. Aggregators are taking on the responsibility – not only to provide the content, but also to rate, bill and settle revenue. Operators are now happy in playing the ‘volume’ game, as all they need to do now is to allow content aggregators to push in content through their network and start taking in their customer access revenue share from the aggregators – no back-office hassles, no charging complexities and absolute focus on customer retention and traditional business lines.
Though content aggregators enjoy their content delivery ownership, they also understand that this is not a very easy responsibility to have. They need to not only sustain relationships with the right content owners to showcase the most attractive content services, but also act as technology enablers to deliver these services. They have to support these high–value and high–volume content transactions, charge them according to the content type and other attributes, as well as settle the revenue with both sides of the value chain – the service providers and the content owners.
Aggregators can easily meet all these challenges with a dynamic content provisioning, usage–based pricing and flexible revenue settlement platform. This capability will eventually become the lynchpin of their technology platform. On one side, operators will demand sophistication from content aggregators in these back–office functions. On the other side, content providers will feel safer to be assured about their revenue share while working with aggregators, who have a reliable BSS platform. Thus, whether they like it or not, content aggregators will have to implement billing and OSS systems that are capable of meeting the demands of both the content providers and operators.
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