Video chat to drive mobile adult content revenues to US$2.8bn

14 Oct 2010

One of the surprising new spikes in mobile adult content and services revenues has come from video chat which could be a boon for hard-pressed mobile operators. Revenues in this area are tipped to reach US$2.8bn by 2015.

A new report by Juniper Research says the US$2.8bn figure will be reached primarily through uptake of video chat and subscription-based services.

The increase – from US$1.7 billion in 2009 – comes despite the proliferation of free content available via tube and TGP (thumbnail gallery post) sites which have depressed revenues in Western Europe.

Video chat service providers have reported a combination of high retention rates and – with services often billed at several dollars per minutes – of very high ARPU.

Even with a comparatively low user base, service providers can generate extremely strong revenues.

Meanwhile, the industry is experiencing a transition from pay-per-download to subscription models as D2C adult sites gain traction and traffic by offering a wide range of specialised niche content.

However, the mobile adult strategies report found that while the rise in consumer smartphone adoption had led to a dramatic upsurge in mobile traffic to leading adult websites, sites are only now beginning to monetise this traffic by offering mobile-optimised content and billing mechanisms.

The transition from walled garden to open internet has seriously impacted on-portal adult revenues in more mature markets.

“In Western Europe, adult areas on operator portals were relatively successful, as were off-portal services billed via PRSMS,” said Dr Windsor Holden.

“As people have increasingly surfed the Internet via the mobile, they’re discovering a wealth of free content – much of it not optimised for the mobile experience, but still more than sufficient for casual users,” Holden said.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years