SMSGupShup, the Helion and Charles River Ventures funded SMS based mobile community, has launched a Mobile Store, retailing content. Interestingly, GupShup’s appears to be a direct-to-consumer retail model, which bypasses the mobile operator.
The content costs appear to be lower than through the operator network:
— Wallpapers: Rs. 5 (compared to Rs. 10)
— Videos: Rs. 10 (compared to Rs. 15-20)
— Truetones: Rs. 6 (compared to Rs. 10-15)
— Polytones: Rs. 5 (compared to Rs. 10-15)
— Themes: Rs. 10 (compared to Rs. 30-50)
(Note: operator network rates via Rediff Mobile)
The Buying Process
In order to buy a wallpaper on SMS GupShup, one first needs to set up a prepaid account which needs to be recharged using a credit card, debit card, online net banking or cash cards (ZipCash & ItzCash), or even by mailing GupShup a cheque or making a bank deposit at an ICICI branch.
A user then pays for the content, and a download link is sent to the user via SMS, which means the user must have an active GPRS connection, and data charges will apply.
While it appears GupShup has tried to enable all means of buying content, the fact remains that this process is still more complicated than the billing via the mobile operator network. Content purchase is often an impulse decision, and unless one has set up a GupShup prepaid account already, buying content from their mobile store clearly isn’t.
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Other means of monetization
Gupshup is trying to monetize its SMS services by offering premium services over and above the free SMS:
— Paid Messages: are 260 characters in length, without any advertisements, and are charged at Rs. 0.20 per SMS (so Re. 10 if you sent to a group that has 50 members). All paid SMS messages are sent over a high priority SMS pipe to ensure very low delivery time. The problem is that these have to be sent via GupShup’s website, because any message sent by the user to GupShup through the operator will entail a cost of Rs. 3
— Premium Groups: these are priced at around Rs. 30 per month, similar to what the mobile operators charge for their push SMS services. Take a look at some premium groups here. Some groups, however, are priced much higher – the Reliance Money Research group has 50 members, and charges Rs. 1150/month for sending stock market tips. INFOMBA is priced at Rs. 25/month. Some stock specific groups are priced at Rs. 120/year. However, there appear to be only 42 premium groups so far.
With advertising hard to come by, offering premium services over and above regular services is an obvious means of monetization. However, to make the business viable, GupShup will need a decent conversion rate, and the premium users will subsidize the free users until advertising also kicks in.
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