Two weeks ago in London, I presented at Over the Air on Emerging Market Opps. I thought I’d highlight a couple of the case studies here and embed the presentation (that I hastily put together on the plane :)
SMS GupShup – I was amazed to learn that this social network of only 2 years, now represents 7-8% of all SMS volume in India – insane! Who says it’s too late to start a social network? Given Orkut’s and Facebook’s strong presence in India, you’d be skeptical that a new social network would be able to make a dent but SMS GupShups unique approach by making SMS the primary interface worked. Users can chat over SMS and subscribe to various SMS content feeds. SMS GupShup generates revenue primarily through SMS ads appended to each message and/or via sponsored SMS messages sent by SMS GupShup groups.
Nokia Comes with Music – Anyone who has ever worked in the music industry knows that the intersection of music and technology has been an up-hill battle in terms of generating revenue. Numerous startups have died at the will of the labels and others live on a shoe-string trying to make their business model work. In any case, most labels/publishers do not generate any revenue in emerging markets let alone many advanced markets. These markets thrive on piracy apparently with micro-economies of shops that can install pirated music onto your phone for a fee. In an attempt to solve this, Nokia launches Comes with Music which basically means if you buy this specific Nokia phone, you get unlimited full-track download which is naturally restricted by the amount of available storage on your device (but you can of course delete and download more). The cost of the unlimited full-track download service is baked into the cost of the device (estimated to be a $50 premium over the same phone without Comes with Music). Nokia takes a portion of this $50 and returns the remainder to the labels/publishers. Fascinating model and no idea how well it’s working and whether ad-supported music streaming will impact full-track download?
Full presentation with many more use cases below:
The real interesting question out of the Over the Air group was weather these solutions were only stop-gaps and not sustainable in the long-term. For example, SMS as the primary interface or as the communication layer makes sense but once data becomes cheaper and more pervasive and smartphones begin to penetrate, users will flock to the mobile web and apps? The counter argument is that these companies will obviously adapt and leverage their brand accordingly.
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