Andrea Boetti is a Business Development Manager at Fortumo, helping web developers and applications and digital content merchants build their monetization strategies for emerging markets.
The expenditure on the smartphone content is shifting from North and Western markets and to the south and east. Emerging markets will soon overtake the United States and Europe in smartphone ownership and therefore most people in the entertainment search on their mobile devices are also located beyond the mature economies.
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Yet most major platforms of digital content delivery such as Pandora and Netflix are not available in countries such as Brazil, Turkey and India (Spotify recently entered Brazil ). Why is it that
The easy answer is the legal rights :? Music, e-books and videos are usually allowed on a country by country basis, and even big rigs need time to grow their business in new markets.
Location
Unlike mobile applications where the content creator is also the most distributor time, the digital content has a much more complicated distribution process behind it. This problem certainly delays the expansion, but can be overcome by location :. Something completely ignored by most digital content merchants
The hypothesis for the owners of the platform and content distributors is that people want to consume content that they have obtained rights to :. Western pop music belonging to some majors
While this may be true in markets with strong American cultural influences, 80 percent of the world does not speak English. Have you heard of the artists called İrem Derici, Yalın or Бурито? They are artists over the charts in Russia and Turkey.
The point here is that often emerging market consumers prefer local music. Retailers like Gaana India and Yala in the Middle East have proven that provide users with access to the local music can be both profitable and increase the number of their users.
When the money comes from
Another concern into Western traders is back the erroneous assumption that there is little or no income to do here. This is reflected in the pricing strategy of Spotify for different regions because it is quite obvious users in the Philippines have less money than those in Luxembourg.
Often the monthly subscription model is simply ineffective, or just not enough to ensure the huge opportunity to acquire the user offered by emerging markets. To put things in perspective, the average extra amount for a prepaid SIM card in India is 10 INR ($ 0.17) and the average balance is 30 INR ($ 0.50).
With numbers like low income, payments by credit card processing becomes unviable because of fixed costs that are higher than buying a received time the user. The best way to solve this is to forget monthly packages in these markets and the transition to daily billing and users weekly.
In our own payment data, we see that daily access purchases work about four times better than weekly - it is easy enough to understand how the monthly packages are not an attractive value proposition, except for a tiny share of -the high end users.
Reaching users in markets emerging becomes an issue crucial for merchants that services such as Popcorn Time gaining popularity and making illegal use of transparent digital content. Before Popcorn Time, find and consume torrents was for the "tech-savvy." Now they have become as the read news on the web easy to use.
If the user experience is the same, it is now legal for merchants to create a value proposition that is attractive, even in low-income countries.
digital content merchants can not be expected to also grow rapidly as mobile applications - but understanding the need for localization and targeting mass markets with prices cheaper (rather than the high-end users, which was the case in the West) will speed up the process and help in the fight against the growing threat from piracy.