Next Generation Wireless Applications: Creating Mobile Applications in a Web 2.0 and Mobile 2.0 World, 2nd Edition

3.3 WHERE DOES THE MONEY COME FROM?

If you are making and selling user applications, then you have two possible routes to market: direct or via the operator, or both. There is a market for direct-to-consumer (D2C) applications, but it is not an easy market to crack. Certain types of application can work well in this market, which is already the case. Games are a good example. If you are selling direct to the consumer then the business model is entirely up to you to decide, notwithstanding precedents set by the market. That said, the mobile content business is still young enough to welcome new pricing models. However, with D2C selling, it is also up to you to collect the money from the customers. This is where you will need to consider the charging model, which could be:

• Free of charge – you have indirect way of making money, such as advertising
• One-time fee – there is a one-off charge, usually upfront
• Subscription – money collected at regular intervals (e.g. monthly)
• Usage based – money collected according to some meter of usage (e.g. amount of data storage)
• Transaction based – money collected for a particular transaction (e.g. buying a piece of content)
• Bundling – some combination of all of the above

The charging model is often the key to success of a mobile service, so an additional consideration is ensuring enough flexibility and agility to change the model. Entire Mobile Virtual Network Operator (MVNO) businesses have failed because of their inability to change the charging ...