Next week I will be attending my 25th CTIA conference. This year’s Vegas show will occur with the twin backdrops of the overall economic mess coupled with the positive trends in mobile application use.
On Thursday April 21, I will be on a panel discussing the Off-Portal business models. The irony is that although I have made a living for the past several years in the Off-Portal marketplace, I believe that this model is not relevant to the future. Let me explain.
For those who are not familiar with the lingo for this segment of the mobile business, let me define a few terms. (If you know all of this you should skip down)
Mobile Carrier Portal – This is the homepage on a handset of a carrier’s wireless Internet service. The carrier determines what services are promoted and placed on the portal. This is also referred to as “on-deck” or “on-portal”
Off Portal – This is any service that is available to the subscribers of a carrier that is not linked to the carrier owned homepage and direct links. This service is usually promoted through use of a shortcode.
Shortcode- a five or six digit number that is used to provide information or other services via SMS
Premium Shortcode – A five or six digit number that is connected to a service that the subscriber will pay a one time or monthly payment.
The mobile value added service market has been divided for the past 5 years between “on-deck” providers and “off-portal” service. The services were predominately information and news services, coupled with fee based ringtone, wallpaper and games services. The advantage of being an on-deck provider was free promotion for your service by being within the captive (or semi-captive) carrier internet web service.
Alternatively, off-portal services were promoted with a mix of traditional web advertising and search engine optimization, coupled with television, radio and print. The off-portal application and content providers also promoted their services via premium shortcodes. To use an off-portal service the subscriber sends a message such as “join” to the code, goes through an opt-in process and gets subscribed to a service such as monthly ringtones. The billing of these services is provided by the carrier.
It seems that regardless of a company’s portal status, they had envy for the other model. On-deck providers wanted the “freedom” to promote their services and drive even greater traffic to their site, while off-portal services desired the free promotion model of the on-deck players.
This game is largely over. Just as the original AOL closed portal gave way to the general Internet, the protected closed gardens of the carriers are done. If their portals are “done”, then off-portal, as a concept is done.
The explosion of smart phones with powerful standard browsers, large screens, pointing devices and keyboards renders a pre-installed carrier bookmark almost valueless.
If you have a fee based service that is on a carrier’s portal, you will have to promote that service with investment that will eventually approach the advertising investment of the off-portal services. This trend is further accelerated by the 3rd party application store trend.
The application stores are filling the promotion void created by the reduction of prominence of the carrier portals.
So on Thursday I will sit on a panel to discuss the challenges and opportunities of the off-portal business model. This business model has made 100’s of millions of dollars for application and content providers and, of course, the carriers.
My opening comment will be that this model is in its end days.
My next article will be on what a carriers and application providers should do to manage this transition.