O2 creating ‘mobile wallet’ system for buying digital content

19 Nov 2010

Telefonica O2 is to leverage its billing engine to enable mobile users to use their devices to pay for products and services and, in particular, digital content like music, videos and newspapers on the go.

Karl Aherne of the O2 media team is responsible for driving revenue at O2 through the development of new market opportunities and leveraging the scale of the Telefonica group to develop new products.

Aherne told the Audio Visual Federation conference Digital Content and the Creative Economy that the monetisation of content for creators is something O2 is willing to take a leadership position in and the door is open to producers and publishers to come in and present ideas.

He said surface has barely been scratched in terms of the growth of digital content. “It took the iPod two years to monetise on sales. It took the iPhone 74 days to arch past 1 million devices sold. It took the iPad 28 days to do the same and in those 28 days Apple sold 4 million iPhones.

“On the Apple App Store, the average consumer is downloading nine apps per month. Mobile data usage amongst teenagers is up 343pc and there are over 2 billion views a day on YouTube. Netflix in the US has access to 14 million homes, 10pc of all homes in the US.

“This has led to some interesting collisions between rights holders and broadcasters.”

Mobile content revolution

But, Aherne said, the mobile revolution has barely been accounted for in terms of its impact on content distribution and very soon everyone with a mobile phone will be carrying a smartphone.

“In fact, people aren’t even using their phones as phones anymore. According to analyst Mary Meeker of Morgan Stanley, the average usage of a mobile phone these days is 45pc for voice. People are using their devices for many more things.

“By the end of 2013, there will be more mobile users of the internet than desktop users. When that happens it will have a profound impact on content and how we leverage mobile access to derive more value from content.”

Aherne explained that O2 is wiling to work with broadcasters and publishers to exploit this obvious opportunity.

“Mobile operators have lots of assets and there are opportunities to leverage for partners. In O2 context, we are working to get the brand to stand for community, it’s all about participation. We are getting to know our customers better and trust us and target content appropriately. The key piece is about personalisation and targeting, we know their devices, we know if they like music or sport and mix and match content delivery with greater accuracy.

“Our aim is to leverage our billing system to create a payment system for content. Our billing engine is going constantly and our plan is to enable third-party content producers to access and bill customers, so there won’t be a need to ask customers for their PayPal details if they are buying your content.

“Mobile is going to increase its role in content distribution and consumption, the affordability of smartphone devices which cost as little as €30 are driving new opportunities for content consumption.

“Right now, we’re focused on figuring out where our assets are best used in this way. One thing is certain, collaboration with third parties and media producers will drive these services and revenue opportunities,” Aherne said.