Once betting on the power of free and the concept of ‘Invertising’, Netcore has re-introduced MyToday services in a paid avatar, calling it an “SMS Superstore”; looks like advertising can’t pay for everything. MyToday, which has always followed the publishing model to SMS content, and was looking to monetize its SMS reach with advertising, has set up over 200 daily SMS packs.

It’s partners including Rajshri Media (a company funded by MyToday founder Rajesh Jain), business information site MyIris, The Economist and India Knowledge@Wharton. It’s probably only a matter of time before Greynium, which Netcore acquired last month, also comes on board as a publisher. Greynium’s has over 25 channels on Google SMs, with over 64,000 subscribers. Also worth noting that trade media publisher CyberMedia, which used to power the tech channel for MyToday, is not in the list (yet).

Cost & Pricing

– Content mix: spans Bollywood, Sports, News, Health, Lifestyle, Spirituality. Note, in particular, the filmstar based channels from Rajshri Media, priced at Rs. 10 for 30 days, that mirror initiatives from Indiatimes, with 58888 Follow.

– Pricing appears to based on the type of content, not necessarily the publisher or the frequency of updates. Some services from MyToday are priced at 5 credits (i.e. Rs. 5) for 30 days, some at 10. Business content from MYIRIS is priced at Rs. 20 for 30 days.
– Credits system: useful for loyalty points and for allowing users to try various services. Can help MyToday upsell new content, by offering free credit to paying customers. More importantly, it allows users to buy credits on MyToday in one shot, and use it for making payments for multiple subscriptions, instead of paying for one service at a time.

Revenue Shares, The Payment Challenge

MyToday’s free services repeatedly ran into trouble with telecom operators in the past: when it comes to data and value added services, mobile operators in India aren’t open or neutral: they control and limit consumer access to services, and operate several consumer services as their own offerings powered by vendors who white-label. Mobile operators aren’t like ISPs. Period.

Among the services that telecom operators offer to consumers are SMS subscription packages, most of them priced at Rs. 30 a month. From what we gather from an industry exec, after telecom operator revenue shares and taxes are taken out, the distributor gets around Rs. 6, of which only Re. 1 is paid to the content partner. The cost of SMS is minimal (based on bandwidth allocation), and works out to a maximum of around Rs. 0.02 per SMS (0.12 per month per subscriber). [ED: Feel free to correct us on this]

Now most of the services in MyToday’s SMS superstore priced much lower at between Rs. 5-20 per month, and clearly take on telecom operator services head on, whether free or paid. It will be interesting to see whether MyToday is enable telecom operator billing for its services (which Rajesh Jain has said before needs to be standardised. Viren Popli had been critical of it too).

How Is MyToday Enabling Payments?

The credit card base in India is limited, debit card base larger, but still tiny compared to the operator billing option. Still, MyToday is trying to monetize that base by allowing credit card based payments using the Interactive Voice Response System, a standard model for making mobile payments.

However, probably in order to reduce cost for itself, MyToday hasn’t enabled IVR based callbacks for collection of payments. Users first have to SMS PIN to 09212 012345, for a phone transaction PIN. They then have to call any of three Mumbai numbers ((022) 26814370, (022) 40366870, (022) 67237670), and enter their mobile number, the PIN, transaction amount, credit card number, expiry date and CVV number. The problem here: any non-Mumbai customer would probably end up paying more for the call than for a subscription service on MyToday. In twitter lingo, that is #FAIL.

However, what is particularly interesting is that MyToday is also asking customers to enable auto-debit, so they have to enter details only once.

This issue just highlights the problem that there is a monopolistic situation that favors telecom operators when it comes to mobile payments, and that situation isn’t conducive to growth.

One last thing

One could say that there isn’t a substantial value add for customers who have access to WAP and can seek similar details, keep in mind that the power of the push model should not be underestimated. As any online publisher will tell you – newsletters work. Which is why so many Internet business have launched newsletters.