Mobile Content
How much effort does it take a mobile service provider to increase the mobile content (ringtones, games etc) spend of a young customer by 50 cents?
Using the average data in the mobileYouth report and assuming mobile content accounts for an average of $0.6 per consumer, that’s an 83% increase in the current spending level – levels which have remained relatively stable over the last 3 years.
Now consider two things:
* how much effort would be required by a mobile provide to generate 50 cents of advertising revenues per subscriber per month?
* how much effort would be required to reduce the youth churn rate of an operator by 2% (ie from 40% to 38%) ? This would yield a significantly greater return to the operating margins and bottom line than an 83% increase in mobile content revenues.
What does this mean?
1) It’ll be some time before they all figure it out but the more proactive mobile providers know one thing already – mobile content is not their growth story. What will the CEO tell the AGM? content? advertising? operating margins?
2) If you’re selling youth mobile content you need to start looking at the business case for your content on the basis of its advertising & loyalty potential as opposed to the net impact on the operator’s top line. Remember, content is a mere fraction of a fraction.
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