Saturday, May 18, 2024

    Putting the value back into VAS

    To make value added services valuable to consumers, the whole industry needs to think again about what ‘value’ means and how to deliver it. Jacqui Jones suggests a radical new approach is needed

    There’s long been a huge focus on trying to get users to subscribe to services, but has anyone ever really looked at the quality of those services? In many cases they haven’t – and as the consumer world becomes accustomed to high quality subs services such as Netflix and Disney+, this is becoming a problem. Why pay for poor quality.

    Increasingly, content and VAS providers around the world get this and are striving to deliver the best quality content they can into this highly competitive market. Get it right and you attract more eyeballs and more subscribers. Get it wrong and…

    The issue is that these services come at a cost. What we have at the moment is everyone wants to access premium services, but the success rate in billing for the operators, content providers and VAS companies is going down, because people are not coming up with airtime, they’re coming up with data. So, for the ecosystem to continue to grow there needs to be a radical new approach to how we value these value added services.

    In short, for the ecosystem to work, everyone in the value chain needs to take a little bit less revenue. Just pause for a moment and let that sink in.

    If we want to open up the market, if we want to not limit the types of services offered through DCB and actually have a decent service, services need to be designed to be financially inclusive. It can’t just be that services are accessible, however, they need to be affordable.

    Currently, with everyone taking such big revenue shares from this increasingly expensive pot, it is slowly becoming impossible to sustain this model. Instead, everyon across the value chain needs to relook at the model: let’s open it up to other products so that we can ensure its sustainability.

    Let’s all start taking a little bit less revenue, because bringing products to the market cost more money – a cost that is only going to grow as demand for higher quality content grows.

    Advertising agencies, for example, need to come to the party; CPA’s have gone up and billing success has gone down

    It also comes down to the MNOs. There are of course different revenue models across all territories, but certainly within South African market where we operate, the average is approximately a 50:50 split with revenues. Everyone talks about DCB being financially inclusive, but to accommodate for this split and other costs associated to bringing products to market, we increase the price of our services/products to ensure the viability of the model for ourselves. But this comes at a cost to the customer, who is now paying more than the true value of a product.  So I guess the question is, is DCB really financially inclusive if you are charging more for products through DCB than through other payment options even though they are worth less in value?

    Instead, right now I believe direct carrier billing is not a payment gateway, rather it is a sort of a revenue share model. If we want to make it a payment gateway that can actually compete and include people, then it needs to take what the banks are taking for transactions.

    This helps to make creating inclusive services that are affordable to the end user easier, as well as seeing everyone make more money overall simply from targeting more customers.

    For the VAS content market to be sustainable, we need to open up the scope of products being offered too. Right now we are limited to digital products with a perceived value, rather than a real value. If we want to start offering a more tangible product that has a real cost associated with it to differentiate the individual product itself, then we’re going to have to change the revenue share models in order to open up that market.

    And if we can change our way of thinking we can make up ‘lost’ revenue in volume instead. Essentially, if everyone takes a little less, we could ultimately open up the market to a vast array of really high-quality products, which actually then make more money.


    Jacqui Jones is CEO of Worldplay

    What content works?

    Direct Carrier Billing (DCB) has become a popular payment method for purchasing digital content and services, writes Paul Skeldon.

    Here are some examples of content sold using DCB and the companies running these services:

    Mobile Games: Many mobile games offer in-app purchases that can be paid for using DCB. Examples of companies running these services include Google Play and Apple App Store, working with the likes of Boku, Fortumo and Centilli in the US and others including Worldplay in other regions to make the DCB happen. In addition, game developers such as King and Supercell offer in-app purchases through DCB, again using a range of well-known DCB providers in different regions.

    Digital Music:  Streaming services such as Spotify, Deezer, and Tidal offer monthly subscriptions that can be paid for using DCB from a range of players including Bango and TPay in Africa and the Middle East. These services allow users to stream and download music without having to purchase individual tracks. In addition, digital music stores such as iTunes and Google Play offer music downloads that can be paid for using DCB.

    E-books: E-book stores such as Amazon Kindle and Barnes & Noble offer e-books that can be paid for using DCB. These services allow users to download and read e-books on their mobile devices without having to enter their credit card information.

    Online Dating: Many online dating services, such as Tinder and Badoo, offer premium features that can be paid for using DCB. These features allow users to access additional features and increase their chances of finding a match.

    Video Streaming: Video streaming services such as Netflix and Amazon Prime offer monthly subscriptions that can be paid for using DCB. These services allow users to stream movies and TV shows without having to purchase individual titles.

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