Chief Commercial Officer at DOCOMO Digital Jonathan Bennett shares highlights from a session at MEF CONNECTS Digital Transformation 2022 (now available to view on demand) focussing on mobile subscription bundling.
Moderated by James Williams, Director of Programmes at MEF, the panel discussion was intended to discuss the proliferation of mobile subscription bundling and unpack the underlying partnership models between telcos and merchants, especially in the OTT and gaming categories and included DOCOMO Digital’s Director of Partnerships, Rakshit Kapoor, Simon Bailey, Head of Partnerships, Gaming, and New Categories at EE&BT and Hugo Marshall VP-Commercial at Napster.
Mobile adoption and digital content consumption continue to surge
While we may not witness the record levels of app consumer adoption seen in the last two years as the world returns to normality and people begin to travel and spend more time outside, the app economy and consumption of content on mobile devices will continue to grow. And the combination of more affordable devices and faster 5G-enabled mobile networks will likely exacerbate the surge. “While gaming has typically been seasonal, we’ve seen a continuous volume of gaming; people who have rediscovered it have persisted with it,” Simon explained. “We’re seeing a slight seasonal decline, but that’s to be expected, and as we approach September, that will undoubtedly rise again. So gaming is essentially an endeavor to stay current and grow.” OTT and gaming content consumption is no longer the domain of the young, with baby boomers driving the growth of video streaming subscriptions in the US as an example.
Mobile subscription bundling: compelling value for OTT and telco brands
Rakshit explained that bundling is when a digital service is supplied as a package to a core service, such as voice and data from the telco side. These are enticing offers, including extended trial periods, attractive discounts, or even in some circumstances, free services linked to specific mobile plans. A rising number of tariff bundling deals are taking place. OTT subscriptions are included in the price of specific carrier rates, remaining permanent for as long as the customer continues on specific mobile tariff plans. Telcos have looked at bundles as a great customer retention tool bringing them into the mobile commerce value chain and enabling long-term strategic collaboration with relevant OTT merchants.
“We’ve noticed that bundles have a big attraction to customers, and they really do boost retention and stickiness,” said Simon from EE&BT.
Both telcos and merchants are concentrating on paid user acquisition
“I think it all comes down to making sure that the customer has the best possible experience. And it sounds super simple. Whether it’s direct carrier billing and checkout or offering the ability for them to plug in a credit card or debit card or e-wallet or potentially paying with crypto that’d be amazing, wouldn’t it? Or turning to their carrier to bundle whether it be hard or soft?” added Hugo.
Consumers have never had this degree of choice in entertainment and media content, and the price of access to content has sharply declined as the competition for viewers has increased. Despite this, subscriber growth has been modest as subscription fatigue has begun to set in. Making the sign-up process simple and convenient for any business in the app economy is becoming increasingly important. Access to new paying customers is made possible at a lower cost through partnerships with mobile carriers that offer the native direct carrier billing payment option or bundle services with mobile tariffs.
This post originally appeared on the DOCOMO Digital Blog and is republished with kind permission