New research by Ovum suggests that in the wireless communications market, companies which charge for content will be the long-term winners. Spending on content which is then offered free to users will be unsustainable in the long term and will rely on revenues from transactions, marketing and – neither of which are are likely to grow substantially in the medioum term. Likewise portal tenancy fees which are reliant on a large customer base and strong brand, something which is scarce amongst service providers currently.
Whilst the growth in popularity is largely due to the widespread availablility of free content, Ovum forecasts that these days are over and that the expectation of free content by users should not be a bar to charging for wireless services.
Eden Zoller, senior analyst at Ovum explains paid-for business model: “The business model based on paid content is simple and transparent – content providers know what they want and what revenues they will get. Users will pay for content that has a high perceived value, that is personalised and delivered in a format that suits their device of choice,” she concluded.
