NPD Group: Challenging Carriers with Content

Drew Hull at NPD Group writes that "more than 90 percent of mobile content sales in the U.S. today come directly from wireless carrier stores, via handsets or through commercial Web sites. That’s why content owners and aggregators are gearing up to challenge this carrier dominance and are now aiming to sell content directly to consumers (D2C)."

With network operators not wanting "to give up the tremendous leverage they have over the value chain," Hull states that "companies hoping to operate successful D2C content stores must not only build a superior and differentiated offering, but also compel consumers to change their current purchasing behavior."

Below is a summary of NPD's Blueprint for Direct-to-Consumer Success:

Building store traffic is the first hurdle:

• Trusted brands like Apple, Sony, Disney, NBC, MTV can leverage their existing customer relationships and rely on the trust they have built with those customers. Others with less well-known brands and smaller customer bases will need to launch campaigns that are expressly designed to build awareness and consumer trust.

Converting Traffic to Purchases:

• Stocking content can take the form of a very narrow offering built for a specific customer group, or a very broad selection that offers something for everyone. In either case, the content must be top-notch. Also, successful companies must have real music ringtones, top game titles, high-quality images and video. Providing samples and demos of the content is a simple way to show what’s available to consumers and ease the decision to purchase. Without high-quality content, consumers will turn around and walk right out the door – likely never to return.
• With regard to pricing, recent NPD data shows that high prices are one of the biggest inhibitors for people who have never purchased mobile games or ringtones. In addition, many consumers prefer to pay once to own content (39 percent) versus paying a monthly recurring subscription for content (seven percent).

Converting One-time Buyers into Repeat Buyers:

• There are many things that go into building long-term, loyal customers who make repeat purchases, and the most crucial step is providing a quick and easy purchase and download process. This means following the rules:
• Short-codes and content IDs must be simple to remember and triple-tap into the phone.
• After the message is sent, the opt-in messages and purchase confirmation must be quick and easy to get through.
• Finally, the content must download into the correct locations on the phone and not harm or disrupt the device itself.
  

Hull concludes that:

While the business blueprint put forward in this bulletin is simplified, the challenge remains daunting. However, if each of the checkpoints is addressed and met, we might finally be able to say with some truth: “this is the year off-portal content will take off.”