Will Pricing Stall The Mobile Content Industry?
By Carlo Longino, Wed Jan 05 21:45:00 GMT 2005

Content providers hold a widespread assumption that people are more willing to pay for content on their mobile phones than on the wired Internet. But this doesn't mean they're willing to pay over the odds for services that don't deliver value.

Two common adages are used to justify mobile content pricing: "People are used to paying for things on their mobiles" and "i-mode did it". Both, though, are a bit of a misnomer, and in any case, the market won't make people pay for content and services from which they don't derive significant value.

The continuing success of ringtones seems to indicate to content providers that they can charge for anything on a mobile handset, and people will accept it. But that's simply not the case. A ringtone provides instant gratification, and its personalization value makes it much more valuable to users than a subscription to a content service. And while it's true that i-mode's been very successful at selling content subscriptions, one of the key concerns of its architects was keeping subscription prices low, both to encourage use but also to ensure users didn't feel ripped off, so they set a maximum monthly price for official sites of 300 yen (about $2.75).

That's not to say content should be free everybody's got to get paid but business models and pricing can't be based on greed and false pretenses.

Mapquest is pumping up its mobile service today, touting a new functionality that lets users create maps and directions on the Web, then access them from their handset. It's mildly nifty, and certainly there's a small niche of people that will gladly hand over the $4 a month for the service, but basing a business model on little more than replacing a few sheets of paper doesn't seem like a recipe for long-term success.

The Weather Channel has always had a popular site in the US, capitalizing on people's voracious appetite to know how warm or cold it is outside, and what it's going to be like tomorrow. While it does offer premium subscription-based services on its site, pretty much everything is free if for no other reason than most, if not all, of the information there is available from other news sources or government agencies. So what inherent value does being able to access some of the Weather Channel's content on a mobile phone add to justify charging $4 a month for it, particularly when that information is, again, available for free from other sources?

Event-based pricing offers one possible solution. While a user might not have an interest in paying $4 a month on the off chance they'll need a map or driving directions, having the ability to access it and be charged for it on a per-use basis makes much more sense for a wide number of users. The Weather Channel has begun offering premium SMS forecasts following this model, and it's also used by what's arguably the most popular mobile content service -- SMS sports scores.

There's been a lot of interest in Java portals from media companies looking to use them as a way to cut out operators and build direct relationships with users. But again, just because it's on a mobile device doesn't mean they can get away with anything. There's a very big risk of damaging those direct relationships, and the companies' brands, by offering Java portals that lead to overpriced and under-delivering content or are just a front for expensive subscription services.

Content providers are doing things in the mobile space they know they could never get away with on the wired Web. But mobile users don't leave their common sense lying in front of their computer screens, and won't open their wallets just because they're on a phone.