Telco Troika? Forget the Content Flow, Watch the Money Flow
Some things never change, like people trying to get between us and our wallets. Or in this case, the long-struggling electronic wallets that have never quite caught on in the U S of A, as they have in Japan and South Korea (broadband penetration: 95% and counting). There is, though, billions at stake. So look at the stakeholders and wanna-be in-betweeners. It’s a partial list of the companies that are trying to determine our digital times, and lives:
- Apple
- Visa
- Mastercard
- and, of course, Verizon AT&T and T-Mobile
The latter three — Sprint’s apparently out there in 4G land — announced a joint venture to “develop a mobile payment service.”
We’ll see lots of head-banging among those companies in the next couple of years, as they try to re-create their middleman role on mobile.
Content-creating companies, unfortunately, sit on the sidelines here, again, rarely having a seat at the table. They are waiting for pieces of the infrastructure to come into place, and then see what kind of revenue shares they can negotiate.
There’s both promise and peril here.
The peril: the pipes (the telco companies’ JV is intended to make sure they don’t become “dumb pipes”, lower-value enterprises) and wallet middlemen take too big a share of revenue delivering paid content experiences, leaving publishers with some variety of pennies or dimes for their expensive content-producing efforts.
The promise: A stable, ubiquitous system of mobile payment, even run by a cartel, should give publishers a better ramp to mobile paid content, which, so far has been largely a non-starter. Apple wants its 30%, the erstwhile phone companies are deciding on their desired share and Google’s trying to figure out the nexus of Google Checkout and paid content. As whatever system develops out of that competition, publishers could finally have a means to more easily monetize mobile content.
Two intriguing questions, at least, for the moment:
- Where are the feds in this? The FTC has been aggressive in at least raising anti-trust concerns and giving air to the journalism crisis. Potential anti-competitive mobile billing agreements pose new issues. Just as the FTC is newly looking into standardized e-book pricing, mobile billing — a grander business with grander impact — may bear scrutiny.
- How will publishers, old or new, get access to their customers through mobile billing? These middlemen all want to own the data, and that means the transaction data as well, an issue for publishers (and others) used to maintaining their customer relationships. Even as the iPad rolls royally out, Apple hasn’t resolved this issue with publishers. It has even failed so far to come to a mutually smart way to sell subscriptions, witness the ongoing issue between Apple and Time, Inc. (as well reported by AllThingsD’s Peter Kafka, here) hanging up publishers’ embrace of the tablet platform.