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BuzzCity Tours – June 2011

April 29, 2011 Leave a comment
The month of June is set to be a busy month for our team as they attend events in UK, Singapore, Africa, France and Taiwan. Here’s an update of the various events our team members will be attending:
  1. Daniel and Hawa from our South Africa office will be networking with industry experts at two events in Capetown, South Africa from 1st to 2nd June – Socialmedia World Forum Africa and AppsWorld Africa 2011.
  2. The BuzzCity Developer Garage which is a channel for developers to share experience, trends and insights on developing sites and applications on mobile internet, will be held on 3rd June at BuzzCity’s HQ office (Singapore). Mr Tan Yinglan, Head (Projects) at National Research Foundation and Tam Hock Chuan, Managing Director, Investments, at SingTel Innov8 will be speaking at this event.
  3. Joey from our Singapore office will meeting with professionals from the developer community at Planet of the Apps in Singapore from 8th to 10th June.
  4. Over in London, Ryan from our Paris office will sharing BuzzCity’s latest developments with mobile, internet and media experts at the Open Mobile Summit held over 8th and 9th June.
  5. Not too far away in Paris, Anna and Camille will be meeting up with mobile industry professionals at Buzzness Mobile 2011 held on 8th and 9th June as well.
  6. Anna will be on her toes again from 14th – 16th June at The i-Media Agency Summit in Brighton, UK where she will be meeting leading experts from the digital media, PR and communications industry.
  7. The BuzzCity Roadshow in South Africa will be held on 14th and 15th June in Johannesburg and Cape Town respectively. The event venue for the Johannesburg Roadshow will be at The Venue Melrose Arch and for Capetown it will be held at African Pride Crystal Towers, Century City. More details such as who the speakers will be and the confirmed programme will be updated soon.
  8. In Singapore on 16th and 17th June Jeffrey and Meredith from our Singapore office will be attending the event for digital marketers, AdTech Singapore, where they will be sharing the latest updates from BuzzCity.
  9. In Singapore on 16th June again, BuzzCity CEO, Dr KF Lai, will be speaking in a panel discussion at Echelon 2011 on the topic ‘Telco: Asia’s Goalkeepers?”
  10. Dr KF Lai, will be attending and speaking at the Chinese Carrier Conference on 20th and 22nd June on the topic ‘Mobile Challenges in Asia’
  11. The annual CommunicAsia2011 held from 21st to 24th June in Singapore will be attended by Jeffrey and Meredith who will be networking with professionals in the communications industry and attending various industry related talks.
  12. Dr Lai will be speaking at CommunicAsia’s CEO Power Panel on 23rd June in which the topic will be ‘Don’t leave home without it! How will the Mobile Wallet empower emerging economies?’
  13. The BuzzCity Roadshow in Thailand will be held in Bangkok on 24th June at the Arnoma Hotel at 99 Ratchadamri Road. More details can be found here.
    Feel free to email feedback [at]buzzcity.com to arrange a meeting with any of our colleagues at these events.

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    Categories: Uncategorized

    App Monetisation Secrets (Part IV)

    April 20, 2011 Leave a comment
    By Romulo “Je” Alipio, Executive Producer, Games

    Try & Buy, Virtual Goods, Mobile Ads, Mobile Rewards, Service Subscriptions, Upgrades & Updates, Cross-selling, Mix & Match . . . the number of revenue strategies has blossomed along with the market for mobile apps.

    Which strategy works best? Which is the most lucrative?

    I can’t answer that . . . because there is no single monetisation strategy that will work across markets. You really have to do your research. And it’s extremely important to have a business model in mind from Day 1. Waiting until a new app is finished before sorting this out is a sure way to lose money.

    Don’t despair, though. While it’s particularly difficult to build a game that will be successful in both developing and developed markets, I think there are three inter-related key variables for developers to keep in mind as they create games and take them to market.


    1. Time
    2. Mode of Consumer Payments
    3. Connectivity, Handsets and Platforms

    Time

    How do consumers in your target market value their time?

    Well, in high-income markets like the US and UK , where consumers have more disposable income, gamers are impatient. They will not support a game that requires them to watch an ad first. Nor are they likely to take a survey in exchange for free game time. So scratch Mobile Ads and Mobile Rewards off your list for these markets.

    Upgrades & Updates, on the other hand, are a successful strategy because American and British consumers are willing to pay a fee to extend the lifespan of a game they’ve already downloaded, assuming they like the game. Upgrade fees provide these consumers with an additional return on the time already invested in a current version of the game.

    In emerging markets like Indonesia and Vietnam, on the other hand, gamers are happy to trade time for free downloads, additional playing time or virtual goods.

    The challenge with Mobile Ads and Mobile Rewards is that many consumers simply do not know that they exist. Developers need to educate the market and build an audience. Consumers often fear that money will be deducted from their SIM card if they download a popular branded game. If they knew they could get EA games like “Need for Speed”, “Sims” and “Worms” for free (via any freemium model), content consumption would jump.

    Time Too

    When it comes to time, though, the split is not simply along economic lines. There are cultural differences as well. In Thailand, Japan, Korea and Taiwan, gamers are hooked on Role Playing Games (RPGS) – like MOBile Wars by Cellufun, Warspear Online by Aigrind and With by GameMaker – and are happy to spend money on virtual goods like clothes and swords for their characters.

    In India and The Philippines, on the other hand, consumers are into games that are easy to pick up and can be played for about five minutes. With short action and racing games, virtual currencies do not take off.

    Mode of Consumer Payments

     The key question here is whether consumers in your target market buy pre-paid SIM cards or subscribe to a monthly service. If they have prepaid accounts, you can scratch any approach that requires a credit card from your list. So basically forget about Try & Buy, Subscriptions, Upgrades and Virtual Items. Technically, it’s possible to subtract fees from a prepaid account. But users generally keep less than US$5 on their cards and they use these funds for what they deem to be essential – SMSes and calls – not entertainment.

    Fortunately, the pre- versus post- paid split falls largely on emerging market lines. So once again, in places like The Philippines and India, think ad-supported and mobile rewards.

    Connectivity, Handsets and Platforms

    Are you building a game for a target market where consumers have the latest phones? And do they have good internet connections?

    If so, you can consider showing video ads and building games in HD.

    But at least ten percent of the global handset market now is held by generic devices like those made by chip-manufacturer MTK (MediaTek) and Chinese factories installing the MAUI browser. These generic phones have touch screens and can connect to the internet and run apps, but the platforms are extremely limited compared with Android, Nokia or the iPhone. Ten percent is a significant share of the market – three times that of iPhones, in fact — so if you want to target these devices, you need to program your game around them. Make the games simple and be sure they do not use too much memory.

    Good connections to payment servers meanwhile are essential for virtual transactions, which need to be as seamless and secure as possible in order to maintain consumer confidence and support. So, Virtual Items and Updates/Upgrades are good bets in countries like Germany, Japan, Korea and the US, where virtual transactions have been proven secure and users are adept in virtual worlds.

    In slow markets, avoid monetisation methods that are data heavy. Creating branded apps – like Yahoo!’s and Adidas’ cricket schedulers and Reebok’s action, racing and sports games – can be more effective, because you only need to count the number of downloads to measure the marketing impact and there is no need to connect to an external server.

    Future Monetisation Strategies

    Here at the beginning of a new decade and some fourteen years after the introduction of the first mobile game, the market for mobile apps is fragmented, providing developers with a variety of options.

    Going forward, expect to see some consolidation as a handful of trusted partners emerge, providing the best possible experience for developers and users alike.

    Expect to see more hybrid freemium models – combining Virtual Goods with Try & Buy by selling additional virtual items at higher levels, Mobile Ads + Try & Buy, etc – as well as social networking approaches, like that taken by Germany’s Gofresh, which encourages app sharing and offers free downloads on itsmy.com to members who recommend a game to their online friends or contact lists.

    Think back for a moment to 2000. If you wanted to launch an international SMS campaign, you had to go direct to each market. But today, there are companies that specialise in providing global SMS services. At the moment, there are companies that can assist developers with monetisation strategies and implementation. But so far, there’s no expertise in providing seamless global services. This will change.


    Related Stories

    Part I – Early Business Models
    Part II – Revenue Issues
    Part III – Freemium Models

    Categories: Je Alipio, mobile gaming, report Tags:

    The BuzzCity Report (Vol 1 Issue 2)

    April 19, 2011 Leave a comment

    The BuzzCity Report for the first quarter of 2011,  as before, includes detailed statistics and analytics, which maps the trends and forces that are shaping the mobile internet advertising. 

    In this latest edition we report on:-

    1. The number of ads served on our network increased 38% globally over the past three months, to 23.2 billion ad impressions.  This means more reach for advertisers and opportunities in new markets for content developers. By the end of March 2011, our network served more than 9 billion ads per month.
    2. Countries that stand out this quarter include Spain (225% increase) and the USA (+72%). Others that have continued strong existing growth trends include Egypt (+144%), China (+130%), Mexico (+93%), South Korea (+92%), Thailand (+92%) and Turkey (+82%).
    3. The continued consumer demand for mobile content, 
    4. The most successful tactics currently used to promote apps (essential reading for all developers), 
    5. How the live music industry is responding to the challenges and opportunities presented by the mobile internet .

    To download the latest report, please visit  reports.buzzcity.com

    Categories: index, report

    BuzzCity Tours: May 2011

    Join our team in the month of May as they attend events in UK, Singapore, Malaysia and Africa.Here’s an update of the various events our team members will be attending:

    1. KF and Meredith will be networking with industry professionals at the Mobile Marketing Association Forum (MMAF) 2011 in Singapore (3-5 May). KF will also be speaking at the social media panel (4th May) on the topic ‘Mobile is Critical to Social Media, but is it Vice-versa?’ 
    2. The BuzzCity Roadshow will be held in Malaysia on 4th May at Boulevard Hotel in Kuala Lumpur”. This event will bring industry executives in Malaysia together to share their best practices, challenges and media understanding.
    3. Hawa will be attending Mobile Web East Africa 2011 in Nairobi (25 – 26 May) to meet up and network with global digital marketing experts.

    Feel free to email feedback[at]buzzcity.com to arrange a meeting with any of our colleagues at these events.

    Categories: Uncategorized

    App Monetisation Secrets (Part III) : 2007 – 2011

    By Romulo “Je” Alipio, Executive Producer, Games

    Apple’s introduction of the App Store in 2007 revolutionised the mobile industry. Games and application developers were freed from the shackles of phone manufacturers and carrier portals. They could sell directly to consumers and in multiple markets. Development cycles shortened, go-to-market strategies were refined. But the iPhone platform only represents three percent of the global market and all the hype led even more developers to try their luck, making it harder and harder for a single app to stand out (and be profitable).

    Faced with yet another crossroads, developers innovated and found a new business model: freemium, a mix of free content and premium paid services.

    There are at least half-a-dozen freemium models. Each offers a potential solution to the issue of distribution and profitability. The techniques can be used anywhere – websites, wapsites, OEMs, on-deck portals, indie store fronts like Djuzz and even via email. But of course there are also pitfalls. Today, join me, as I try to make sense out of Try & Buy, Mobile Ads, Virtual Goods and more.


    Try and Buy

    A Hong Kong startup with strong ties to Nokia – mBounce – first introduced this approach in 2006. mBounce managed Nokia’s “Try for Free” business and embedded a free version of the popular mBounce 3D Bowling game on Nokia phones in 2007 and 2008. With a simple click, users could buy the premium version.

    One of the first freemium models, this is still among the most popular. The concept is straight-forward. Consumers test an app for free – either for a limited time or with limited functionalities – then if they like it, they can purchase it outright.

    Users of Mobile Hotdog are presented with a menu to purchase a game or play a demo version.  Payments are by SMS.

    From a consumer perspective, the payment process for Try & Buy is much smoother than the previous pay-per-download models, which relied on annoying SMSes to confirm and reconfirm a purchase.

    Developers meanwhile have complete control of the price point and territories to support. They also earn on every purchase. To implement the model, developers generally work with Try and Buy SDK providers like mBounce to embed the approach in their codes.

    Virtual Goods
    The instant gratification and bragging rights brought by a bigger shield, a colourful vest or a mean-looking pet have spun a whole new industry. Gamers can buy virtual accessories, maps, weapons and even new characters with a single click. The user flow is seamless; payments schemes are normally via SMS, wap or credit card. These micro-transactions enable whole virtual worlds and real-world companies to exist. Developers work closely with companies like Fortumo which provides API’s that can be easily integrated into an app.

    In this example from GunBros, gamers spend “War Bucks” to purchase items, armor, weapons and artillery. But first consumers must purchase the War Bucks, at an exchange rate of 5 War Bucks to one real-world US dollar. Payments are made via credit card.

    Mobile Ads
    We’ve written a lot about mobile advertising here on the BuzzCity blog. Graphical banners can be displayed before, after or even during a game. Developers work with distribution networks like BuzzCity that provide automated solutions or SDK codes which can be embedded in an application. There are no upfront costs, developers control the types of ads shown (blocking ads they don’t want) and they earn a percentage of the ad revenues with every click.

    Service Subscription
    Just like old-school newspapers and magazines, mobile applications with regularly updated content can charge consumers for subscriptions. Not surprisingly, media outlets have been the first to adopt this model. In 2010, The Washington Post launched an iPhone app for just US$1.99 for 12 months of mobile access to the paper’s content.

    The Daily,” a daily digital news publication with original content created exclusively for the iPad, offers weekly and annual subscriptions. Payments are made by credit card.

    Developers need to build subscription systems internally as they require a server to push the content and settle payments, which can be made by SMS, WAP or credit card. Upon startup, the application connects to the server to check the consumer’s status (paid, unpaid, etc.) as well as the type of content available for that geographic locale. Users meanwhile are normally prompted during payment cycles, unless they have signed up for auto-renew.

    Subscriptions won’t work for most games as the content has a limited lifespan — the normal lifespan of a racing game or puzzle is 3 – 4 months — but it could work for multi-player games, though I haven’t seen this done yet.

    Mobile Rewards
    Imagine you’re playing a game and would like to buy a virtual shield to protect yourself from demons. The shield costs 10,000 virtual dinars. But you don’t have that much virtual currency and don’t want to pay the real world equivalent. What to do?

    Well, if your time is flexible, a number of companies now offer a solution. Instead of spending cash, take a survey or click on an ad instead. Afterwards, users are rewarded with virtual credits, prizes like unlocked characters, special maps and limited-edition weapons or even free game downloads.

    Mobile rewards are usually pubicised at the beginning of a game to entice users to participate. It’s most popular in developing markets where consumers use prepaid SIM cards.

    Developers meanwhile work with companies like Tap Me to implement this model, which is financed by advertisers and marketing companies.

    Upgrades/Updates

    Another way to monetise applications is to offer upgrades and updates for a fee. Rolling out new characters, features and levels after the initial launch of a game keeps users interested, prolongs an application’s shelf life and generates an additional revenue stream, without much additional cost. New skins – often tied to a holiday like Christmas or Halloween – are also popular.

    Upon startup, apps normally check for updates and if any are available, users are prompted to upgrade.

    Bolt Creative offers Pocket God users several choices to outfit characters or play new levels.

    Developers normally build this system internally as it requires a server to push the update. Payments are provided via normal channels (SMS, WAP or credit card).

    Cross Selling
    This is a good way to move back inventory or promote new apps, by using one game to sell another. Cross-sell pages normally appear at the end of a game before a user exits. For example, if a consumer has downloaded an old game for free, she may see a cross-sell page linking to a premium site selling the latest apps. Or if he is playing a new game, the cross-sell page might promote a developers’ back catalogue.

    Mix & Match
    Developers have also begun to offer consumers choices on how to pay. In this golf game, for example, Flexion offers pay-per-download as well as two different subscription options. Payment is made by SMS or wap charging.

    Other developers combine elements of various freemium models, such as enabling consumers to turn off ads by paying an upgrade fee.

    Overview
    So many choices, so many possibilities, it can be confusing.  Each of these models has its pros and cons; some work better in one type of market than another.  In the next installment of this series, I’ll provide an overview of how these freemium models are performing as well as share some thoughts about where we go from here.

    Related Stories
    Part I – Early Business Models
    Part II – Revenue Issues
    Part IV – Monetisation Strategies: What Works, What Doesn’t

    Categories: Je Alipio, mobile gaming, report Tags:

    App Monetisation Secrets (Part 2)

    By Romulo “Je” Alipio, Executive Producer, Games

    At the turn of the millennium (which sounds very cool to say, but was really just a little over a decade ago), app developer houses were popping up all over the place. 

    Large developers made money by selling content directly to phone manufacturers like Nokia.  Sometimes they received one-off payments, but more often revenue sharing was the preferred model.  Garage developers, meanwhile, struck deals with bigger companies, which could bundle their content for sale to the Nokias and Ericcsons.

    But as the number of development houses mushroomed, margins became smaller and smaller and it just became too difficult to turn a profit. Pay-per-download seemed the way to go, but like the other models, this revenue stream was highly dependent on the carriers, which created a number of problems for developers.

    Revenue Issues

    1. Disproportionate Revenue Shares

    Game developers – and smaller companies in particular – were really at a disadvantage under this model. Carriers generally kept 70% of revenues, but sometimes their take could rise to 80%.

    2. Even More Disproportionate Revenue Shares

    SMS and WAP charging are controlled by the carriers, but since the mid-2000s, carriers only work with Master Content Providers (one or two per carrier). Everyone else goes under them. So smaller developers wouldn’t even make 20% from a revenue share deal, as they relied on better-connected firms to distribute their content and had to share their portion with them. Figure that it cost US$20-30k to design and develop a game. There just weren’t enough downloads to cover costs, much less make money.

    3. Late Payouts

    An age-old problem faced by vendors in many industries. Carriers often paid developers three to four months later than the designated payout date. For February payments, for example, developers would be lucky to receive their money by June.

    4. Disagreements over Generated Revenue

    Just how many consumers downloaded an application? You would think this would be a straight-forward question, but the numbers were always a source of contention, particularly in developing markets. Developers inserted tracking systems into their games. But carriers said that many downloads were not paid. In some countries, the discrepancies could be as high as 40 percent. Were the carriers honest? Were there flaws in their systems? We don’t know. But most developers couldn’t do anything about it. Only the biggest houses with the most popular games had any bargaining power with the telecoms.

    Dark Ages & Rennaissance?

    At this point, it’s also worth remembering that the mobile industry was fragmented. Thousands of devices had flooded the market and choosing which platform or platforms to target was daunting.

    All this led to a ‘Dark Age’ for developers. Few companies had postive cash flow or annual profits. From 2005 – 2007, investment in gaming and mobile applications fell to an all-time low.

    Fortunately this period was short-lived.

    In 2007, Apple launched the Apple App Store, paving the way for new business models (did someone say FREEMIUM?) and enabling developers to market directly to consumers, bypassing carrier portals and payment systems. But, of course, not everything is rosy . . . and in the next part of this series, we’ll look at the issues faced by app developers in the market today.

    For more about the early days of app monetisation, please check out my first entry in this series. In Part III, I explore the diversity of “freemium” models and in Part IV, we look at the success of various monetisation models in different markets.

    Categories: Je Alipio, mobile gaming, report Tags: