Mobile application based community Mig33, which monetizes by sale of virtual goods, has rolled out a partnership program in India, looking to tie up with mobile value added services companies (VAS) and handset manufacturers on a revenue sharing basis. As we had reported in June, Mig33 had emerged as the top free app on Airtel’s App Store. Indonesia remains its largest market, and the company claims that its members purchase more than four million virtual gifts per month, and exchange nearly one billion mig33 messages every day. Mig33 claims to have 40 million registered users, a third of which, according to Mohit Gundecha, Director of Business Development and Head of India for Mig33, are of the Indian diaspora.
India’s Olive Telecom is among Mig33’s first partners, and the company will pre-load the application and receive a revenue share on new users and signups. Others signing on include PT Numedia Global, an Indonesian platform provider and mobile VAS company, and Philippines-based ThumbMOB, a new consultancy specializing in digital media arbitrage, with in-house applications development, distribution and publishing capabilities.
MediaNama spoke with Gundecha about their business model, how they make an ARPPU of $1 from India without payment partners, why they’re tying up with VAS companies, not operators, and monetization opportunities.
How many Indian users do you have?
We look at regions and diaspora – the Indian diaspora on Mig33 includes Gujarati’s in Tanzania, Mozambique, Swaziland, South Africa; Punjabi’s in Australia, Canada; and medical students in Russia and Kazakhstan, apart from people from Kerala in the middle east. We have a large user base from tier-two and tier-three towns in India. Around one third of our use base would be the Indian diaspora. We want to go to the next level now, and we have to keep seeding organic growth. We are making money, and are in a position to share with our partners.
We’re announcing a distribution model where we’ll tie up with handset manufacturers and mobile VAS companies: we’ll give them a finders fee for giving us active users, and a revenue share in terms of the revenue we make out of the users. This is unique in terms of the mobile apps, because most of them don’t make money, and cannot share money with the ecosystem. We have a proven revenue model, based around the virtual transactions model of QQ-Tencent.
How will you be in a position to know how much you make from which partner?
We will give them a tagged client, which they (Handset manufacturers) will preinstall on the phone, and if users play games and buy virtual gifts, we will share with them. It’s an incentive for them to distribute. Most of these handset manufacturers are looking for these alternate revenue streams
But they’re looking more for buyers of handsets. The apps are a prop…
The hardware is a given now, and they know that the consumer is expecting a better user experience and applications. We work on even the lower MTK chipsets and Series 40 handsets, and the application is very thin – 147kb. It offers more than instant messaging. Tier two and tier three users want apps for pure entertainment. We want to make sure that this deal iscommercially attractive for them, and they make sure that they put our apps on as many phones. This is for the mobile VAS providers as well. It’s still a content market, and a low margin business. The applications business is hard, and getting a community going is hard. If there’s already someone doing it, and they have an operator connection channel that they can use to distribute this app, and we can offer them an alternate revenue stream.
How do you make money from India? Don’t your revenues come from overseas to India? In terms of microtransactions, there isn’t a transaction model for Indian users yet, so what will you distribute to VAS companies?
So, whatever we make out of the Indian user, we give. Doesn’t matter if we collect the money from India or the US. The model allows VAS companies to do deals with operators in terms of subscriptions and transactions, and there is revenue share for them. We’re planning to expand our social payments platform to India, and we will explore partnerships. The payments scenario is changing in India, particularly with Airtel being allowed to offer payment services. We are making money, and most of that is overseas.
Most or all? How are you making money from India if you don’t have transaction facility in India?
We have a social payments platform where some of our superactive users become our merchants. The merchant can locally distribute Mig33 Credits. He buys in bulk from us, and sells it locally for a profit. That has worked very well for us in Indonesia and South Africa. There are few merchants here as well, but we would need a dominant retail chain here, or a telecom operator route.
So you’re planning to prepaid cash card companies like Itz Cash, Oxigen etc?
We’ve done a similar deal in South Africa, and we are exploring options here. In South Africa, we have a tie-up with a company called Blue Label, which has 300,000 points of presence, where you can buy a Mig33 voucher, and redeem it for different things inside Mig33.
Instead of trying to go offdeck with “superactive users”, why not tie up with telecom operators like Ibibo has done for their microtransactions?
We want VAS companies that we tie up with to do this, because we cannot, as a startup, manage operator relationships. Our DNA is more around community and entertainment. That’s the reason why we are looking to tie up with VAS companies: they give us access, we give them community. There are a few revenue streams
– we pay for every active user
– then there’s a revenue share on the Mig33 credit consumption that happens,
– there is advertising revenue share
We give them a custom client. So a VAS company can have its portal inside the Mig33 client. They can put their content, and sell it to the Mig33 community, and we make a share of that. It might look like a complex structure, but we have the infrastructure to track by client that we give to the partner.
You’d earlier tied up with Lemon. Is Lemon moving to a revenue share model?
We’re in talks with them about the model. It’s not been closed yet.
How does the share work across the network?
Wherever the partner collects the money, they keep a bulk of the revenue share, wherever we collect, we keep a bulk. We’re keeping a bulk for advertising and microtransactions – the virtual economy model. In their case, the content that they sell. I think that is fair.
What sort of an audience are you targeting in the Indian diaspora?
What we’re seeing that – in my travels across cities – most of our users are not comfortable giving their true identity out on facebook and twitter. There are social taboos, inhibitions, and some discomfort about sharing their true life. Here they can put choose their virtual identity. We’ve seen uptake from tier-two and tier-three cities, the vast majority. I believe that today the GPRS usage of most of the telecom operators is driven by tier-two and tier-three cities. We want to make sure we grow our base there, and then look at the urban areas. We want to be the QQ of the rest of the world. There are two billion feature phones in the areas where we operate. QQ is landlocked in China. It’s a good opportunity to make it happen in these other markets. We’re already dominant in Indonesia.
What are some of the things that I can buy on Mig33?
You can buy a hug, a teddy bear or a kiss. In India, the flower, the hug and the teddy bear are popular, as well as the Kohinoor Diamond. There are social games on chat, like dice, heads or tails and Mig War are pretty popular. People buy emoticon packs. We’ve recently introduced avatars, but their takeup hasn’t been as much as virtual gifts and emoticons. Our focus will be to grow the avatar stream as well.
How much is your ARPU from India?
Our revenue per paying user (ARPPU) is a little more than a dollar for India. Most of the buying comes from International – and usage comes from tier-two tier-three cities.
What’s your take on RockeTalk? (ED: RockeTalk is another India focused application, with rich content like video. more here)
They are an interesting company. I’m not sure about the application size, though. In India, anything about 200 kb becomes an issue, because sometimes the network doesn’t support the download. The handset many not have memory enough memory to install those applications above 200 kb. Access and speed are two key aspects, that’s why we’ve kept ours at 147 kb, which is pretty thin. Our take is that if you have voice, video and rich media features, it consumes a lot of data, which can be a constraint. Also, we feel there might be an inhibition among people to be vocal in a social network if there’s a true identity attached.