Partnership to spur greater wireless content adoption: KPMG

Wireless carriers are going to have to do a better job of forging partnerships with content providers if they hope to spur greater adoption of premium content services. That was one of the main conclusions of a recent KPMG survey, Consumers and Convergence II: The Search for Value, Choice and Convenience in the Digital Age. "From a percentage perspective, most people said no" to paying more for premium content, Kathy Cunningham, industry sector leader for KPMG's communications and media practice, tells Report on Wireless. KPMG measured consumers' willingness to pay more to access services or applications on their mobile devices they currently get for free on their PC. Shaking the "Internet is free" handle will be difficult in the mobile world, and the evidence demonstrates that fact. Those not willing to pay outpace those willing to pay by a large percentage. However, the results do highlight some potential opportunities for carriers looking to make money from mobile content. About one-quarter of survey respondents are willing to pay for access to multimedia entertainment on their cell phone, while a similar percentage (22%) wouldn't mind receiving advertising on their device to access the multimedia content. There is even a higher percentage (24%) of those interested in blogging and social networking who are willing to accept advertising compared to only 17% of those willing to pay to access this content. With consumers overwhelmingly unwilling to pay more for additional premium content to their handset, Cunningham says wireless carriers are going to have to get creative if they want consumers to adopt high-value wireless data services. Operators will have to develop a pricing model amenable to consumers or create partnerships that entice users to consumer more mobile data while at the same time generating revenue for the carrier, she adds. The report highlights the potential that advertising can bring to the mobile Internet experience. "Just as consumers have gotten used to the fact that Internet content is free, but underwritten by advertisements, the same level of acceptance is growing with regard to mobile content services," reads the study. "The mobile Internet, therefore, is far from worthless to consumers - carriers and content providers just have to position it with the same, largely advertisement-driven, value proposition as the fixed Internet."There is other good news from the survey though: carriers are experiencing higher downloads of multimedia content. "Even a year ago, the use of the mobile phone for such things as multimedia content downloads and instant messaging was low; this year we can see that it is much more prevalent. Increased penetration of smartphones and increasingly affordable third-generation services have clearly had an impact on consumers' willingness to treat the mobile phone as just another Internet access device," states the study. Device linked with applicationThe survey focused in large part on the consumers' attitude toward convergence of services and applications across multiple platforms. While many operators are trying to capitalize on the mobile Internet, many users still associate a type of device with a type of application. The survey indicates that SMS is still seen as a mobile-to-mobile application while IM is for use on PCs, and industry players are going to have overcome this "silo mentality" to capitalize on convergence. "To truly exploit and profit from the sense of convenience and utility that consumers are starting to feel in the ‘any-to-any' world, consumers must also feel that they are free to communicate with any other user in the mode they desire, at any time they desire, regardless of whether the other user is on a similar service platform or the same type of device," states the report. "This creates a tremendous opportunity for content players, carriers, and device manufacturers to integrate unified communications and Internet presence technology into their offers."

Partnership to spur greater wireless content adoption: KPMG

News | October 31, 2007

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