Telecom companies moving to change revenue-sharing scheme
Telecommunications firms are starting to become generous to their partner content providers, moving away from the traditional 70%-30% sharing scheme, tagged as the lowest sharing in the world for content providers.
Now, companies such as Ayala-led Globe Telecom, Inc. are starting to give away as much as 60% share in revenues. Rival Smart Communications, Inc. has also started changing its revenue-sharing scheme when it signed a three-year, exclusive deal with leading sports and entertainment firm IMG for high-speed mobile and Internet content.
IMG has provided Smart third-generation or 3G international and local sports content, ranging from news clips, interviews of sports celebrities, instructional tips and live video streaming of sports events.
But content providers offering short messaging service (SMS) — which accounts for the bulk of the 300-strong mobile content developers in the country — do not stand to benefit unless they shift to producing "rich, compelling and original" multimedia content.
Officials from two SMS-based content providers said their revenue-sharing deal with telecom companies remain the same.
Mario Domingo, consultant head for service creation division at Globe, told BusinessWorld in a recent interview that Globe started to tweak their five-year-old revenue-sharing scheme only this year.
"We have 50%-50% and in some cases 40%-60%, in favor of the content provider. Whenever we identify the content to be really compelling, meaning it’s proprietary, it’s a differentiator, we are going to charge less for that," Mr. Domingo said.
He said mobile content from Sa Piling Mo, a television drama series produced by ABS-CBN Broadcasting Corp. is getting about half of the revenues per content.
"For example, Sa Piling Mo is produced, directed and designed by ABS-CBN so any content emanating from that, we will be happy to get only half of it, and they get half of it," Mr. Domingo said.
He added that any content which could pass as "plug and play", meaning needing minimal or no added work at all from telecom companies, would be given a bigger share.
"And if I could remove my part of the work and my partner could do that part of the work, I will be happy to share more. In the early days, what happened was we still need to do a lot of technical work," Mr. Domingo said.
Late last week, Globe launched the latest in its set of premium content. The company released about a million subscriber identification module (SIM) cards which are capable of receiving unlimited information for free under its latest offer called G-Live.
Globe said the Philippines is the third country in Asia to carry the service, after China and Thailand.
G-Live provides a subscriber free snapshots or headlines of the news for free. But if the subscriber wishes to download the full news of any other content available, he will be advised of the charges before he actually downloads.
Globe said this is purely optional and permission-based and the subscriber is guided by the G-Live interface every step of the way.
"Anything that appears on G-Live is free. This is not the same as text broadcast, this is not spam," Globe head for consumer business group Ferdinand M. dela Cruz said.
The frequency of the message varies, depending on the profile of the subscriber. It could be news in the morning and entertainment updates in the afternoon.
Messages are only sent out from 7 a.m. to 9 p.m.
Mr. dela Cruz said subscribers don’t have to worry about being interrupted or getting out of touch, as G-Live works quietly in the background.
Incoming news headlines and updates are non-disruptive as they do not emit light or sound. Further, the information is not directed to the phone’s inbox, hence does not take up memory space. Plus, no matter how frequent the messages come, the battery life of the mobile phone is not affected.
The service could also be customized to suit the requirement of a specific area. In Thailand, the service was used to warn subscribers of one network of an impending tsunami.
For news content, Globe has partnered with both ABS-CBN Broadcasting Corp. and GMA Network, Inc.
But Globe is currently in talks with various content providers.
Existing Globe subscribers can download the G-Live service, but only for Symbian-capable phones such as the N6600 and N70.