M-Commerce Twice the Cash Value of E-Commerce by Darren Yates
Do you even know what M-Commerce is?
Well you better learn fast. Predictions in Europe for M-Commerce, the second
largest market behind Asia, are for a spend of ?7.4 Billion in 2006 that's over
$8 Billion. That's twice the predicted spend of traditional web services!
So what is M-Commerce? It's very simple, mobile / cell phone based sales.
Usually relating to content such as games, wallpaper, ringtones etc. But
there's much more to it than that. Keep reading.
What's the big deal? More people own a mobile phone than a PC, they're better
integrated in to daily life. People are very comfortable using them. They are
now in fact heavily relied upon, as the phone feature is only a small part of
what can be perceived as a miniature multi-purpose multi-capable portable
computer.
Mobile Growth Mobile growth already outstrips all other communication channels.
Half of all Americans are mobile phone subscribers. In the UK the ownership of
a mobile phone is equivalent to 1.5 phones per head of population. According to
research, mobile content services will be worth $121 Billion worldwide by 2008.
White label distribution of ringtones, images, games and other promotions will
drive up to 1/5th of the revenue generated. It's estimated 1.5 Billion people
worldwide own a mobile phone.
With more and more technology add-ons to tempt the consumer these devices are
now Cameras, MP3 players, game consoles, voice notepads, picture albums, diary
organiser, PDF readers etc etc.
In fact I'm writing this article on my PDA / Phone whilst sat in the sunshine
in the garden. With two taps on the screen I can hook up to my home wireless
network and check my emails, browse the net, update my Blog or edit and publish
article submissions on one of my sites all via broadband.
We are not that far away from always on Net connections. Once this arrives it
will allow anyone to do this almost wherever they are. Certainly in the major
cities around the world. When this happens there will be a third Internet boom
as Joe public try's out the Net connection again that was always too shoddy to
use in the past.
And what will they want? Content! ringtones, wallpaper, games, MP3's etc
But I'm getting ahead of myself. The real money isn't even going to be made via
a Net sale. The real money will be made via SMS(Short Message Service),
MMS(Multimedia Messaging System) and this ones a goldmine...Micro payments.
Recent research has shown a doubling of worldwide revenue from streaming TV and
sports bulletin subscriptions. 380 million people worldwide are expected to
subscribe to similar services in 2005. Including TV show bulletins particularly
from 'reality TV' shows, News bulletins or Soap updates.
Big deal you're not a TV network how can you make some money out of this boom?
I'll go into that in a second but first I want to go back to those Micro
payments I mentioned earlier. The real gold dust.
Micro Payment Profits Micro payments have been around for a while here in the
UK. A smaller land mass has allowed for a quicker rollout of mobile
technologies here. Nationwide Network coverage is easier to achieve. I believe
the first example in the US to take it mainstream was by the 'American Idol'
show. Viewers voted for the acts on the show via their mobile phone. They where
then charged a small premium for their vote on top of their networks regular
SMS charge. Think of the millions of votes that the show attracted and the
revenue generated.
That's micro payments in action.
The beauty of this is that people don't feel like they're spending money
because they don't need to whip out their credit card, it's an easier payment
method, usually involving a simple text to a small number and the payment is
small. They also trust their mobile for making payments unlike an online
transaction.
Any payments made will appear on their next phone bill. People are already used
to paying in this way, they're comfortable with it. Whether it's to vote for an
act on a TV show, for a game download or to grab the latest ringtone.
What have you got that you could take micro payments for? You should be
considering how you can utilise your current website network to tap into this
market. Do you offer subscriptions? Is there a service you offer that you could
convert to subscriptions.
How Can You Make Some Money? Here's a quick example. Your newsletter. Would
your subscribers be willing to pay a small premium to have your newsletter
delivered directly to their mobile? Wherever they are, without the need to be
sat in front of a PC. Thus bypassing the SPAM filter problem and guaranteeing
they receive your valuable content. You could sell it as valuable service for
your customers with added content not available on your site or via your
regular newsletter.
Or offer them up to the minute breaking news in their industry, which they
receive as it breaks and not when they check their email five hours later when
it's to late to take action.
Digital artists sell your wallpaper designs direct to the consumer via the
mobile phone. New bands forget the record company contract sell your music via
MP3's direct to the consumer. Investment advisors get subscribers to your 'Hot
Tips' bulletins. Store owners offer a sale bulletin service etc etc
The Future The omnipresent Google are moving forward with major mobile
initiatives. Spending vast amounts of money to stake a claim in this fledgling
market. There's the mobile version of Froogle for one and they've also
developed mobile business listings specifically for the potentially huge 'local
search' market. They also offer a free SMS based information service
http://www.google.com/sms/ and http://www.google.co.uk/sms/
Another major company Real Networks, creators of Real media Player, recently
bought Finnish mobile phone game developers Mr Goodliving for $15M. Essentially
buying a back catalogue of high profile mobile games.
NTL a cable TV company here in the UK recently streamed the Grand National, the
biggest race horse meet here in the UK, live to Nokia owning subscribers.
This is early days and that's a small glimpse of the future.
The M-Commerce Market is very different from the online market in terms of what
content consumers are currently paying for. The biggest revenue generators
online, 70%, are porn and dating sites. A similar percentage via mobile is for
games, music and video. Films, that's another one, Nokia are now distributing
Hollywood movies via memory card!
The technology specifically 3G, an always on network with transfer rates of
384kbs a second, is here and trickling into mainstream culture. These devices
are in fact capable of 1920kbs. Compare that to GPRS at 56kbs. You don't need
these speeds to take advantage of this market but you should keep them in mind
to realise the full potential of where mobile communication is going.
Here's a brief, eye opening, wish list from consumers for future mobile phone
payment abilities:-
10 Use your mobile as a key 9 Marketing communications 8 Retail checkout
payments 7 Vending machine payments 6 Flight check in 5 Credit / debit cards 4
Season tickets 3 Loyalty cards 2 Parking Meter payments 1 Mobile Coupon
redemption
Getting Started How do you Accept Payments? Reverse SMS is very popular at the
moment. It provides the ability for you to direct consumers to secret download
links on your site whilst taking payment through a premium SMS message. Another
method known as 'WAP Push' sends a link via SMS that automatically launches
when the message is opened. You will need to set up your own WAP / SMS Gateway
on your server which will require server administrator access to use both these
solutions.
But there are other easier solutions a number of websites are springing up that
allow you to upload your content available for download, games, video,
wallpaper, MP3's etc . A small fee is taken from each paid download by the SMS
Gateway company.
I've compiled a list of useful links to a number of the above solutions and I've
also thrown in a couple of links to 'mobaphile' websites were you will find
some interesting predictions for the future development of mobile phones along
with some real off the wall ideas for making money with mobiles.
http://www.how-to-make-money-online.info/m-commerce-Subscriptions.php
To paraphrase a strap line 'The future's bright the future's mobile'.
About the Author
Darren Yates is the owner of How-to-make-money-online.info a site focused on
How To Make Money Online
and Internet Marketing.
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