Gsm(one - content distribution system using prepaid cards. Solutions. NOMOC Publishing

Distribution of content for mobile phones has become a rather attractive line of business activity due to the fact that at present the moving forces and trends of the development of this rather new but promising market can be easily traced. This market, though highly specious, has its own features. At present all possible ways of mobile content distribution come to two options: cooperation with mobile network operators or use of prepaid cards. Under the existing practice of distribution of funds between an operator and a content provider in the Ukrainian market, for example, the content provider will have 50% of the total sum of sold content at its best. In spite of the fact that it is the content provider who bears all organizational and financial load connected with creation of new services, advertisement support of projects and promotion actions, expenses for technical assistance and consultations for clients, payments to copyright holders for mobile content. Taking into consideration an ever growing competition among content providers in the market of entertainment for mobile users, the issue of profit increase is becoming more and more sensitive. With the growth of competition, expenditures for advertisement actions, development and implementation of new solutions, launch of new services also grow. Besides, royalties are also tending upwards because users become more and more particular about the quality of mobile content, and the development of high-quality content in its turn requires more expenses from developers. Prepaid cards as means of payment allow to abandon usual payment systems of mobile network operators. It s a rather simple and reliable solution which takes due account of marketing and technical features of this market. Implementation of this system will allow you to increase your profit from mobile content distribution.

Possible ways of conducting business

Two schemes of conducting business are now popular in the market of mobile content at present. They include distribution of content to users through payment systems of mobile network operators and distribution of content using prepaid cards.

Content distribution through operators

If using payment systems of a mobile network operator, the financial scheme looks the following way:

The main disadvantage of the existing system of cooperation between a content provider and mobile network operator is that a content provider has to settle all organizational questions as well as bear all expenses connected with system launch, its modernization and support. Besides, a content provider bears all expenses for advertisement and royalty.

Content distribution based on prepaid cards

However, the financial scheme changes considerably with the use of prepaid cards.

Even with the same amount of payments to the other side (organizer), the partner s profit increases due to the reduction of infrastructure and allocation of expenditures between the organizer of the system and the partner which is impossible in case of cooperation with an operator. There can also be an intermediate a dealer between the partner and his customer who represents the interests of the partner in the business of distribution of prepaid cards.

Business model

At present the organizing company offers two types of business models:

Partnership business model is intended for partners whose main activity is mobile content distribution. This business model implies close cooperation between the system organizer and the partner, the profit being distributed upon the sale of cards and royalty payments. Profit distribution on a percentage basis in this scheme depends on many factors and is to be discussed with the partner.
Promotion action business model when content on prepaid cards is used by the partner (mobile network operator, phone manufacturer, store chain) to boost his goods and services. For example, when a customer buys a mobile phone, the manufacturer gives him the most popular Java game of the season as a present or when getting connected to a mobile network operator, the client receives a prepaid service card as a gift. The card may have a certain value and give the client a possibility to choose content or buy a certain element of content.

Each business model may include exclusive cooperation. In this case cards are designed according to the partner s corporate style and demands and the partner is to buy a consignment of cards. Under this scheme the price of a card may constitute up to 50% of its nominal value for the partner, depending on the emphasis on certain types of content. Whatever the type of a business model, the system organizer is responsible for the operating capacity of the central system, ensures provision of content for the system, makes payments to copyright holders, provides technical consultations to partner s support service, produces prepaid cards. Organizer may also take upon himself the responsibility for installation, technical support and servicing of the partner s server if agreed with the partner. * If the partner takes the responsibility to print the cards, cost of printing is deducted from the card circulation cost