consumer experience, regulation, technologies

Where next for PRS?

A new Thinktank report (pdf doc) prepared for premium phone-paid services regulator, PhonepayPlus, ‘Current & future market for Premium Rate Services’ offers some compelling industry and consumer insights into the Premium Rate Services (PRS) market, particularly consumed via mobile devices.

A contracting PRS market is put down to stringent regulation and heavy fines disincentivising rogue providers.  While a clearly labour-intensive report provided for the regulator which praises the work of the regulator may provoke cynically tossed eyebrows, there is a degree of truth in the claim. 

Despite PhonepayPlus’s most recent, less publicised quarterly reports reflecting a marked downturn in PRS complaints, it could be that there are fewer services to complain about.

A lack services is also reflected in the report’s other major finding that “the single biggest reason why consumers are not using premium rate services is simply that they don’t find the services on offer interesting.”

Less of a trust issue then – although lack of pricing transparency is still cited as an obstacle; more that there’s a basic dearth of decent PRS services out there.  Perhaps technology has moved on and those consumers are now into smartphone services.  Having said this, Thinktank puts the PSMS 2009 market value at £316.7m.  Some people are still spending, and earning.

But there’s certainly greater billing flexibility in the Apple App Store model which is bound to a bank account and therefore unshackled by mobile network operator-mandated tariff points of up to £10 per purchase.  This is one reason services may have switched platforms and payment mechanisms. 

Will this change with evolving media consumption behaviour?  If the paywall model is to gain traction, there could be an effective role for PRS which brings premium rate messaging back into play.  

Payforit – the UK operator mandated mobile internet payment platform – is still only seeing nominal, though not insignificant growth (Thinktank market sizing puts mobile internet billing’s 2009 value at £21.4m), whereas PSMS messaging is broadly considered as quicker and more reliable payment mechanism when used on direct billing platfoms.

PRS market size
Market Sizing, Thinktank. (Based on data from PhonepayPlus)

The regulatory minefield and pricing transparency issues can dissuade some from taking this PSMS route, in spite of its obvious mass market appeal: no smartphone needed.  It’s here that a key challenge lies for the regulator in producing its 12th Code of Conduct: demystifying perceived advertising complexities for industry and, by proxy, brands.

However, in grasping that nettle, brave paywall publishers could easily appeal to readers who have read a certain item:

“You want to hear more about Ashley’s naughty text messages?  Text ‘Ash’ to 84xxx for a secure link to special new content.”

(Example inspired by Orange’s latest Digital Media Index.  At 800% growth, Celebrity search dwarfed the closest search term category, Music, 115% growth). 

Rather than pay a weekly or monthly subscription for all items, behaviourally cherrypicking stories and asking for small premium rate micropayments per story could be an area worth investigating.

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