O2 active – am I rich enough to download?

So I finally managed to activate GPRS on my O2 phone and was very excited about checking out O2 Active, the operator’s home portal. The portal looked rather plain and lacked “the look”, but I figured the design was functional and that was more important than cool looks. The categories were all standard and and pages loaded really fast. So the browsing experience was far better than anything I’d experienced before, either in the US or in India.

What shocked me though was just how expensive mobile content downloading was (leaving aside data charges). All the games listed under games arcade were retailing at £5.00. Moreover, there were no previews, no trials, only a text description of the game, followed by the option of clicking “buy” and getting charged £5.00. Hmm, interesting! I’m paying £5.00 and I don’t even know what I’m getting. Any wonder operators and game publishers are crying about mobile game sales stagnating and % of game users remaining low (despite fervent denials of any such thing from the big boys of game publishing!). Just imagine how many more browsers will convert to purchasers if they could trial the game before purchasing it, or if they could “rent” it at a lower price point. I would bet on an increase in conversion of at least 30%, if not more.

It wasn’t just games that were expensive. Wallpapers, standard celebrity wallpapers and even some really crappy non-celebrity ones were going for £2.00, ringtones for £2.50 and truetones for £3.50. Way too expensive for mostly ‘not so hot’ content.

The one big surprise though was that video was priced so low! Most video clips, typically from TV shows and comedy clips, retailed at only £0.75, which was great. I did not even think twice before downloading videos at that price point. I’m not sure whether the low price point of video is because O2 is trying to promote video downloads or whether revenue share agreements or rights acquisiton costs allow videos to be retailed so low. The important point though is that the price point is low enough for impulse purchase, which is key to driving volumes and getting more people hooked to content downloading .

I’m hoping O2 and the other operators crack the pricing conundrum soon.

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About Deepak
Venture Capital and M&A advisor, Entrepreneur, Startup enthusiast..

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