“Don’t compare the US Market (for Mobile VAS) to the Indian Market,” said Viren Popli, SVP & Head of Mobile Entertainment For STAR India, responding to a question at Mobile Monday Mumbai (MoMo Mumbai). “The US market is built on a $3 ringtone, while the Indian market is built on a Rs. 7 ringtone. When you are told in the US that you’ve got a 100,000 ringtone downloads, you are paid for a 100,000 ringtone downloads after 1 month. In India, if you have 700,000 ringtone downloads, you’re told you’ve got 100,000, and you get paid for 30,000, one year after its done.”
Popli rubbished claims of India being a competitive market, saying that while in the US, there are only 3 mobile operators, the revenue shares are much higher, despite their being at least three times as many mobile operators in India. A rather shocking revelation – “If you have ever dealt with mobile operator, you will know that after your meeting ends with one operator, every mobile operator knows what you’re talking about.” I don’t know about you, but the word CARTEL comes to mind. No wonder some VAS players are pushing for standardization and transparency in this space.
So is the solution in going off-deck and allowing advertising to pay for the content? Says Popli: “In telecom, operators have actively discouraged free content. If you put your content up for free – the amount of money I make off advertising on a per-click basis, is equal to the money I make the revenue share I get out of a Rs. 3 SMS. It is actually encouraging me to destroy existing business models. So if a big media company suddenly decides that it’s easier to give the content away for free, because it is easier to collect Rs. 1 lakh from an advertiser than revenue share from an operator, the whole game starts changing.” I think that argument is valid only if you have a fill rate of 100 percent for advertising.
The other issue here is – while a big media company with its marketing muscle has this option, smaller content owners do not. Hence, the opportunity for a large content aggregator, to do what a big media company is doing.
The Mobile Monday held in Mumbai a couple of days ago, was rather charged up; Veer Bothra and Aditya Mishra were kind enough to allow me to participate virtually, via mobile from Delhi. Am impressed that Veer’s phones battery lasted for over the two hours that I was on the line.