Content strategy key for operators

To be successful in this area, operators need to consider pricing, branding and also making sure they have the right mix of competence in their marketing and product departments.

Hubert Kjellberg, head of Content at Ericsson Multimedia, says that many operators are making money on content services such as music and gaming. But there are several areas that service providers can consider to make their content offerings more attractive.

Firstly, while consumers are willing to pay for quality content, they are showing a clear preference for flat rates.

"The à la carte model - where all content items are priced individually on top of the traffic cost - is a tough sell to consumers because it is difficult to predict what the charges will be at the end of the month," Kjellberg says.

Flat-rate pricing will carry a risk for operators as they cannot predict the costs they will have from each consumer; but there is also an upside in having subscribers who do not take full advantage of what they pay for.

The ability to acquire and aggregate the right content services requires new skill sets. Kjellberg says that service providers are not accustomed to keeping their fingers on the pulse of what is hot in the media. "Operators that source content are going to need people who are used to dealing with record companies, for example," he says. Another option that many operators choose is working with aggregators that share both risk and revenue with the operator.

Telecom operators also have to overcome their risk aversion. Traditionally, operators are accustomed to concrete business cases, but in the media industry it can be hard to predict what is going to succeed or flop. "Operators have to get used to taking some of the risks that are inherent in the media industry," Kjellberg says.

Better branding will help operators sell their content, too. Most end users do not see operators as "sexy" brands or suppliers of the content they might be looking for. They will not necessarily be seen as hot brands in the future either, but the perception that a consumer can find compelling entertainment services with their operator subscription is a step in the right direction.

Finally, users are also looking for personalization, which will require data mining to uncover customer preferences. "Consumers don't want to be the targets of marketing of products they aren't interested in," Kjellberg says.

A few operators in the UK, Scandinavia and Japan are taking the lead in mobile content with TV, music and games while operators in less developed markets are still working with ring tones, themes and so on.

What will the future of mobile content bring? More music and games, says Kjellberg. "But there is also a demand for more television and video services such as short video clips, sports and news."