5 SEP 2019

3 reasons carrier billing helps streaming services grow their revenue

POSTED UNDER Digital Goods Direct Carrier Billing Streaming Subscriptions
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Mattias Liivak

Head of Marketing & PR, Fortumo

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The streaming service market is saturated, with consumers in the US having to pick between more than 300 streaming services. Even in emerging markets such as India, the choice has become overwhelming with over 30 OTT services to pick from.

Consumers are overloaded with information even before they start to pick which service to use. The last thing they need is a complicated checkout process once they’ve made their choice.

Here are three reasons carrier billing helps streaming services grow their revenue and provide their customers with simple access to content, as shown in the video below:

Streaming services are seeing increased growth from telco channels

The portion of streaming service revenue coming from partner channels is steadily growing. Bundle partnerships and re-selling provide streaming companies with access to a new user base, backed by the partners’ marketing capabilities. Amazon recently indicated telco partnerships as one of the key reasons for their streaming services being successful in the Indian market.

In the context of TV provider and telco partnerships, direct carrier billing is an obvious choice. The partner already has the consumer’s payment information on file. This means they can be easily transitioned from a free trial to a paid package without any interruption to the consumer.

Carrier billing is tailored for impulse purchases and microtransactions

Live events are the fastest growing content segment for streaming services. Consumers want to get access to time-sensitive content as quickly as possible, whether it’s the Football World Cup, the weekly cricket match or a live concert from their favourite artist.

Buying access to such content is often done as an impulse purchase, which means the checkout needs to be as fast as possible. If the consumer becomes bogged down in entering their home address, credit card number and other irrelevant details, they are likely to seek out a pirated stream of the same event.

Time-sensitive content is sold on a pay-per-view basis, which means the transaction size is often quite small. Credit cards involve a percentage-based fee (around 2%) and a fixed fee for each transaction (usually around $0.3). This makes it difficult for streaming services to test out sachet pricing and smaller value content, which is especially important for emerging markets.

Carrier billing on the other hand provides a frictionless payment flow so the users don’t have the need to seek out the content elsewhere, and there are no fixed fees involved.

International audiences are fragmented and require custom approaches

Globally, only 18% of people have a credit card. For any streaming service with the aim to reach international audiences, this requires supporting local payment methods which consumers have access to.

Any payment method integrated needs to support local currencies, languages and multiple models of business (trials, pay-per-view, sachet pricing and subscriptions). In many cases (such as Boleto Bancario in Brazil and the digital wallets in South-East Asia) lack some of these crucial capabilities.

Carrier billing is in a unique spot as it is available globally in more than 100 countries. But at the same time it’s local: every telco in each country is integrated directly, which includes supporting local currencies, localized checkout flows and features that support the varied business models of streaming services.

If you want to learn more about how carrier billing and bundling solutions are helping streaming services grow their revenue, download our white paper on the topic below.

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Do the math: how much would your revenue increase with carrier billing?
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