Monday, June 04, 2007

US Premium SMS Revenues

Telephia released the first ever study on Premium SMS in the US. Over the course of the first quarter of 2007, a total of 74 million premium SMS transactions were processed across all carriers, for a total retail value of $273 million.

A couple of interesting statistics:
  • Mobile content downloads dominate in value (79% of total revenue). Average premium transaction value is $7.27
  • Off-portal content downloads now account for 32% of all mobile content downloads.
  • TV based voting and sweepstakes account for 47% of total volume, but that total is probably based on a few stand out hits like 'Deal or No Deal', who accounts for half of that volume. Average premium transaction value is $1.
  • Based on Q1 results, we can now safely say that 2007 Premium SMS revenues will exceed $1 billion.
Detailed results are posted below.

Q1 2007 Premium SMS Volume and Retail Value
Category TypeVolume (000)Volume Share (%)RevenueRevenue Share (%)
Mobile Content29,54440%$214.9M79%

Here are some thoughts about these numbers:
  • The high transaction value associated with mobile content ($7.27) clearly indicates that the vast majority of all mobile content downloads is charged on a monthly subscription basis. If that is the case, roughly 10 million users are currently signed for monthly subscriptions, or about 4% of all mobile subscribers in the US.
  • Furthermore, if we assume that binary content subscriptions (ringtones, wallpapers, games, etc.) typically cost $9.99 per month, where as pure text subscriptions (horoscopes, jokes, etc.) cost $4.99, it follows that 54% of all mobile content subscribers sign up for text alerts, and 46% sign up for ringtones.
  • It is clear that most premium sweepstakes and voting contests run at a $0.99 price point.
  • It is interesting to see that voting+content account for over 90% of all revenues. This means that other premium sms categories such as chat, dating, and micropayments haven't really taken off yet. This is hardly surprising given the limited support amongst carriers as well as the severe restrictions that some carriers are imposing on such programs.

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