Paul Budde Communications Stock Market Press Releases and Company Profile

Sydney, Aug 18, 2007 AEST (ABN Newswire) - In 2006 and 2007 the market is seeing significant increases in carrier portal services; however they are coming from a rather low level and are still well below the PSMS market. Traditional Premium SMS (PSMS) also showed growth, but that market is set to remain static, due to the impact of the Vodafone prepaid caps restricting access to PSMS. There is still much uncertainty about the future of the PSMS market.

It is also important to remember that close to 50% of all PSMS services is still text based: horoscopes, love predictions, etc.

True PSMS content is very popular in the following areas:

- Polyphonic tones - realtones starting to replace these where handsets are capable;

- Animated screensavers and wall papers also very popular. Most of this is being driven by TV and print advertising, with web based promotion on the increase;

- Chat / dating services are a strong second segment after personalisation;

- Marketing / votes and comps also remains strong in Australia - though by revenue as opposed to volume comparison is smaller than the first two sectors.

Music services remain a key growth market, with the music industry rapidly developing a whole range of new music services - both real tones and full track. Some full tracks may be already preloaded on phones and/or memory cards in some cases but activated and paid for by PSMS, or downloaded via PC or Bluetooth and activated paid for by PSMS.

Video based services are the largest new addition to the mobile content industry - both downloads (Girls and Goals) and uploads - (blogging apps). This market is set for rapid growth over this period - both via MMS and direct videocall type services.

Despite the new capped plans as well as the fractioned billing of content, demand remains high. The main problem remain the operators, in Europe they are tripping over each other to subtract value from the market by including in the capped plans, free videocalls, free Internet access and free multimedia services.

Despite this the industry is confidents it can find ways around these roadblocks. A strong demand has been created in the youth market for mobile content, and the right business eco-systems are in place to provide new services. As services extend their way across wider demographics the potential for mobile content remains strong.

New Mobile Virtual Network Operator (MVNO) models in Europe also point into the direction on better revenue sharing arrangements. It is expected that the market will move towards Wireless Application Protocol (WAP) and event based billing rather than per message billing in 2007, as operate in Singapore, France and the UK. This will lead to a more flexible charging model - and a better customer experience.

See separate reports:

Australia - Mobile Content - Industry Overview, Forecasts

Australia - Mobile Content - Premium Rate SMS;

Please don't forget our Roundtable on Digital Content this Thursday 23rd of August . More info:

2. Business models for content providers
Ever since the arrival of the Internet the question has been asked: 'where is the business model?'

Initially, most incumbent industries (telecoms, media, finance, film, music) discredited the Internet. Then they denied it would have any impact on its business. And, finally when they couldn't deny its success any longer, they attempted to dominate it.

However, none of these strategies have been overly successful for the incumbents, and they have eventually had to join the newcomers and in looking at new and different business models. Early leaders here are the BBC in relation to digital TV, News Limited with MySpace, ING with online banking, and so on.
The stage has now been reached where companies, both new and old, are working on new business models.

In mid 2007 I gave a presentation at the Australian Film TV and Radio School (AFTRS). I have met with students of this school in the past, and always very much enjoy interacting with these creative young people.

The school has produced an interesting overview of the various business models that exist around sites such as Yahoo, Google, MySpace and so on.

Content providers can make their content available on these sites.

Table 1 - Selection of some business models
Site Business Model TurnHere Fees of up to $1,000 per clip, based on popularity Revver 20% of ad revenues; 50/50 split portal and CP Metacafe $5 per 1,000 views (minimum 20,000 views) Amazon 50% of own product BlipTV Click per pay ads; 50/50 revenue split Brightcove  Ads inserted in content revenue-sharing

(Source: AFTRS)

The industry is still waiting on models from companies such as Google Video, YouTube, Apple iTune, Joost, Bablegum and many others.

The students were encouraged to try out some of the models and report back to the school. This would give valuable feedback to the school, and to the content industry as a whole.


PAUL BUDDE Communication Pty Ltd,
Ph 02 49 988 144 (international x 61 2 4998 8144)
Fx 02 49 988 247 (international x 61 2 4998 8247)

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