I don’t often participate in the roundrobin of the momolondon Yahoo group, but I recently posted a response to a fellow members thread regards the lack of fair revenue split with premium rate short code charging. I agree with his complaint – the average 60% share makes it difficult to make money and indeed get started for the average non-VC funded mobile service or content provider. However, his further premise that this was the reason -and excuse- for those same companies to then rip users off, or atleast not be as crystal clear as they should about charging, hit a nerve with me. My response was candid – and as a friend in the industry pointed out, I may get an interesting reception from the next Jamster or mblox executive I run in to…
“Further to Marks comments; I empathise with some of the frustrations outlined -as everyone probably does- with regards the shoddy payouts of shortcodes; its similar to the very early days of premium rate telephone numbers, from what I understand anyway.
However, I fundamentally disagree with Mark’s assertion as this being the cause, or any excuse, for the poor practices, evasive publication of clear pricing, and underhand tactics employed by a multitude of companies in the mobile content / mobile services sector.
Furthermore, as pointed out (and demonstrated by recent fines levied at Jamster and their aggregator mblox, not to mention O2 last year – and these are just three examples) it has been the much larger firms, who allegedly “should know better”; not just the back-of-the-Sunday-Sport-type ringtone providers.
I concede that the current revenue split and ongoing operational cost of short codes, makes it very difficult for third parties to make a good return on provision of content or services (at playtxt we are in the same boat), but using this as an excuse to rip off users, whichever you slice it, is wrong; especially as it is consequently undermining customer acceptance and trust, which then stifles the very growth that the industry and sector needs.
In the medium term the mobile subscription sector will of course recover from the bad PR of 2005; after all, this is not unlike the early days of credit cards on the web – and to some extent the truth is such stories make great news coverage for the uneducated. But having lived through the birth and eventual acceptance of the Internet as a serious business channel, I have been astonished to see the same slapdash quick-buck approach taken (and still being taken) by some -if not many- mobile content companies, with their disregard for user privacy, guideline adherence, and lack of integrity in charging.”