The annual revenues created from mobile and tablet content is expected increase by almost $US25 billion ( £16 billion) over the next three years.
Juniper Research’s new report predicted that revenue would reach $US65 billion ( £42 billion) by 2016, with growth fuelled mainly by an upsurge in video, game and eBook purchases via tablets as well as better opportunities to monetise content through Direct Carrier Billing, rather than credit card billing, on smartphones.
The report found that while eBooks are currently the largest revenue stream on tablets, with applications (such as Amazon or Kobo) as popular as the devices themselves, tablets would have an increase in paid and free video applications. Gaming revenue was expected to move from gaming devices, such as the Nintendo 3DS to tablets, the company said.
Direct carrier billing on the up
Direct carrier billing would also come into play more, although over the top storefronts would still use credit or debit cards for their main payment method. Google Play and BlackBerry App World were increasingly using direct carrier billing (DCB) as well, however; report author Dr Windsor Holden said while the availability of this payment method was patchy, its benefits, such as higher conversion rates and greater reach, suggested that it would come into use more in the coming years.
Juniper’s white paper on the report said DCB could be mutually beneficial: it meant a wider user base could make payments, including those who did not have a credit card or were too young for one (particularly the prepaid sector).
The report said this payment method was “ideal for impulse purchases” since it was basically a one-click transaction, so beware your bank accounts, people. There was also some “residual” reluctance to input credit card details into a device, as well as various issues with expired credit cards and re-entering details.
“As content retailers are aware, the greater the time the end-user is required to spend on a transaction, the less likely he or she is to complete it.”
Vendors that had started using DCB had seen an increase in transaction volumes and values, the whitepaper said, with data from BlackBerry indicating customers were more likely to purchase apps on BlackBerry World when carrier billing was offered, with an average of 75% of gross sales transacted through the mobile network operator, and average carrier revenues from apps up between 100% to 300% after launch.
“For example, the carrier billing transactions Amdocs processed for Google Play in the US in 2012 grew by 3 times in comparison with 2011.”