mardi 17 août 2010

Google Android, Ovi, and the billing issue - why it's still an issue!!

Few days ago, Google reported discussing about integrating PayPal into its Android Market to allow consumers using their PayPal account to pay for contents.

Jolie O'Dell from Mashable summarizes the issue very well: "For many users, one of the biggest pain points in owning an Android device can be the experience of buying a non-free mobile app from the Android Market."

This summarizes very well the core issue about mobile entertainment: how do you  charge consumers and make money. Doing marketing is nice, showing off your brand and your services with cool applications is certainly helpfull and needed. But in the end, you need to make money out of it.

Besides iPhone, other "stores" are really lagging behind, including Ovi. Noticed they communicate on "downloads" and not on income?

As it has been proven over time that carrier billing is the best way to convert spontaneous purchases on the phone", and bluntly writes "What Google really needs to do is integrate carrier billing around the world to make it as painless as possible for consumers to click, pay and download applications" (make sure you read the comment from PhilipCohen" in this article)

So on one side, you have mobile stores with increasingly huge number of downloads (Android Market) but no income, and on the other side you have Mobile Operators with decreasing (that's an understatment) downloads on their own portals, but with the current most efficient billing.

Now you could think that guys like Nokia and Google are pretty smart guys, that they didn't wait for us to think about this. So why didn't they implement operator billing?

1. It's becoming sensitive grounds, as mobile operators have their own App strategy, which obviously competes directly against manufacturer's stores. See my post about Vodafone and Android....

2. Well, unlike credit cards and PayPal, operators are pretty darn expensive, they take a very large chunk of the revenues (30-50% average)! Of course operator payout is more efficient, but are they the one driving the traffic and the hype those days?

3. You know how many mobile operators there are out there. That means that many contracts, implementations... that's why even Nokia who started it a while ago with Ovi, still isn't there.

 On the left, an image (credit Ilogan) very similar to what I saw on my SE X10 today. I'm in France, but apps are listed in US dollars, UK Pounds or in Euros (of free "Gratuit")... go wonder why nobody buys anything!!

The issue is that if nobody agrees or find suitable solutions, there will be no eCommerce on mobiles, maybe advertisement, but advertisement for the "real world"; and advertisers will get tired very soon, once the "hype" is over!

Fortunately, there's still the iPhone; where we can still make some income!!

My bet: the way things are currently evolving, I'm placing a bet on credit card issuers like Visa or MasterCard.... But operators still have a good cards in their hands, but they shall use them, and fast!


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