In the ongoing quest to combat the threat of over-the-top (OTT) applications, network operators are looking for ways to distribute cloud-based and mobile content to consumers themselves, bundled with their broadband. And it appears to be paying off.
A new study from Juniper Research has found that content paid for via carrier billing will provide operators with more than $14 billion in revenues over the next five years.
That growth will be fuelled by a dramatic rise in carrier billed payments made on devices such as tablets, consoles and smart TVs, the firm found.
According to the research, existing deployments of carrier billing on app storefronts have produced a marked increase in paid conversion rates (more than 30 times those of credit cards in some instances). They have also enabled first-time monetisation of unbanked consumers and younger demographics. Furthermore, the greater sophistication of third-party carrier billing solutions now permit subscription billing, allowing for on-going content monetisation.
In addition, many storefronts had found that carrier billing integration resulted in an uplift in average transaction values as well as volumes, partly due to higher sales of bundled in-app virtual items.
While OTT content providers such as Amazon, Netflix and Hulu continue to add value to their subscriptions through the addition of original content such as Transparent, Bosch and Ripper Street, moves like carrier billing will become increasingly important.
Juniper also argued that the next step would be the acquisition of major sporting rights, despite the high cost that's a deterrent for now.
According to research author Windsor Holden: "Even for free streamed sporting events, audiences are rarely in excess of a million – to recoup the cost of a successful bid, OTTs would need a paying audience of perhaps ten million in some cases. But by 2021, when the NFL rights are due for renewal, we would be surprised if one or more OTTs did not bid for an exclusive live package."