Last week Bango held the latest in its long-running Nexus event series, in San Francisco, CA. Bango Nexus is a prestigious, invite-only event that brings together key players shaping the mobile internet.
The theme this year was “Making money from the mobile web” – both the central opportunity and challenge for today’s giants of mobile. Consequently the speakers at Bango Nexus were charged with identifying the long-term strategies for effective mobile monetization.
These speakers included Rick Fant, Vice President, Marketplace at Mozilla, Wayne Thorsen, Vice President, Global Partnerships at Telefónica Digital and Dr. Ronjon Nag, Vice President, Storefronts and Payments at Research In Motion (RIM). The speakers were joined by more than 50 C-Level attendees, from companies such as Facebook, PayPal, Groupon, Sony Mobile and Samsung.
Bango Nexus coincided with the ‘App Nation 2012’ conference down the road, and some Nexus attendees paid a visit, taking the opportunity to take the temperature of the app ecosystem. A discussion point at Nexus was the growing number of mobile ad networks at App Nation, reflecting the dangerous over-dependence on dwindling ad revenues to fund content. This contrasted well with the key theme of Nexus 2012 – the shift towards direct charging models.
The first speaker at Nexus 2012 was Rick Fant from Mozilla. Rick outlined a radical future vision for mobile apps, with his central contention that apps should migrate to the cloud and be accessed on demand. The transformative effect of such a shift would be threefold:
- Apps become seamlessly discoverable – With the formal app store being just one of a broad range of discovery methods
- Apps become instantly ready – Run from the browser, with no download required
- Apps become inherently social – With no walled gardens governing sharing mechanisms or who we can share content with
Mozilla is essentially arguing for apps without an app store. Within such a landscape, app developers would write apps and services for a single platform – the web – and refine from there. The barriers to entry would be low, there would be no mandated business models and to quote Rick, “the mobile web becomes open for full innovation”.
Next to speak was Dr. Ronjon Nag of RIM, Ronjon lifted the veil on RIMs new BB10 operating system, which is expected to launch in late January 2013. Ronjon’s presentation particularly focused on the payments strategy for BlackBerry 10. While the media narrative for RIM has long focused on the negative, RIM has traditionally scored popularity points within the developer community due to its embrace of low-friction operator billing (a service provided to RIM by Bango), and the consequent high conversion rates compared to other stores. The BlackBerry App World of 2012 has grown 54% over 2011, and is considered to ‘punch above its weight’ in terms of developer monetization.
BB10 brings with it a rich content ecosystem, including apps, music, video and TV for both rent and purchase. Ronjon gave an overview of how the BlackBerry Payment Service within BB10 will enhance RIM’s monetization credentials. The service will become a highly flexible platform, giving content owners access to a conventional payment system (app purchasing and in-app purchasing), and also a subscriptions system for digital goods. In this way, RIM will unlock a wide variety of charging models for developers, supported by an excellent user-interface and frictionless billing.
Then came Wayne Thorsen, Vice President, Global Partnerships at Telefónica Digital. Wayne focused on the differing monetization challenges between developed and developing world countries. The central observation was that mobile services in the broadest sense find fertile ground in countries where mobile penetration is high, but access to conventional banking services, bank accounts, credit cards, etc, is low.
The result of this is that developing economies present very different and broader opportunities for mobile monetization. These opportunities are often anchored by operator billing, and may include transport ticketing; money transfer; contactless payment; bill payment and much more. Indeed for many, the developing world has become the centre of innovation in mobile payments.
The final Nexus speaker was Bango CEO Ray Anderson. Ray delivered a highly practical presentation, focusing on conversion rates, and the quest for “the Holy Grail” of 100% payment conversion. Drawing on Bango’s massive payment reach, Ray discussed the key variables which must be considered to sell digital content effectively. Most importantly, Ray outlined the disproportionate positive effects on profitability caused by relatively small increases in conversion rate percentage, and invited the audience to consider whether conversion rate is treated with sufficient priority amongst large content owners, compared to the normal “hot point” of payout rates.
Ray’s key factors which influence conversion rate are:
- Smooth user experience (simple click-to-buy)
- User optimized billing method
- Trusted branding on payment pages
- Lower price drives higher conversions
- Content provider brand “quality”
Bango Nexus concluded with an on-stage panel discussion, chaired by the dynamic Rajeev Chand, Managing Director and Head of Research at Rutberg & Company. Here panellists picked up where Ray left off, with a focused debate on payment conversion rates and the commercials that underpin operator billing. A key question was whether mobile operators bring unrealistic expectations of their own take from operator billing, though it was widely acknowledged that most operators have been prepared to demonstrate flexibility, in order to reach agreement amongst the different stakeholders. All agreed that in both developing and mature markets the propensity for paying digital content and services on a mobile phone is very high.
What can be concluded from Nexus 2012? With Android and Apple slugging it out in the smartphone wars, working to demonstrate developer value, with RIM’s BB10 due out in the first quarter, with Mozilla driving a browser-first approach, with Telefónica and others supporting huge growth in the developing world and Bango advancing on key partnerships announced during 2012, 2013 promises to be a pivotal year for monetization on the mobile web. The success of mobile content ecosystems will be influenced more by effective monetization of content than by mobile advertising strategies.
Close attention to the detail of what makes paid content sell will separate the “Amazons” from the “Also rans”.
Bango would like to thank all of the speakers and attendees who made Nexus 2012 such a success. If you attended and would like to provide feedback on the event, please send your thoughts to [email protected].