Revenue Potential of Wireless Text-Messaging Campaigns Explored

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The deal: As opposed to other networks, which have struck exclusive deals with individual wireless service carriers, CBS has opened up its programming to all carriers, and is charging viewers to vote.

The result: CBS and marketers supporting the shows will have a new way of measuring how engaged viewers are in the programming and whether those viewers are willing to put their money where their eyeballs are.

After being thrown out of the house by his fellow contestants, viewers of CBS’ reality show Big Brother 6 last week voted to send graphic designer Kaysar back into the house.

Kaysar, a graphic designer who uses a single name, was voted back on 'Big Brother' by viewers, who paid 49 cents each for the privilege.

Viewers charged 49 cents a message

But it cost them: exactly 49 cents each to cast a premium text-message vote from their cell phones.

So far, the bulk of America's TV-text messaging promotions have either been free to consumers or close to it. Viewers voting for a reality show participant or answering questions in a trivia contest generally pay little or nothing for the privilege, with marketers or the networks picking up the tab as part of their marketing or development expenses. Some viewers with cell phone plans covering a number of text messages per month for a small fee might use those messages to vote. Others pay about a dime to participate.

But this fall, as the networks amp up their mobile marketing integrations in programs of all kinds from sports to news, they and the marketers supporting them will have a new way of measuring how engaged viewers are in TV shows and whether those viewers are willing to put their money where their eyeballs are.

CBS digital

CBS, under Cyriac Roeding, the young German heading wireless operations for CBS digital media, believes the Big Brother experiment with premium-priced text messaging is crucial to the development of the mobile phone as a new media.

"If we want to make this a business, you need to charge for use," he said. "How do you get a media giant to move if there's no business model?"

In addition to the pricing issue, the Big Brother deal differs in an important way from text messaging's previous TV success story: American Idol. As part of that Fox program, now in its fourth year, Cingular Wireless is an exclusive sponsor and only Cingular Wireless customers' votes are counted. While subscribers to other cell phone services, such as Verizon Wireless, are able to text in, their votes are not counted.

Universal phone codes

But Mr. Roeding cut a different deal for Big Brother 6. Instead of limiting voting to one carrier, Big Brother bought a short code, in this case 22788 or CBSTV, which, along with other codes, will be used for voting on different programs throughout the season. Subscribers to any phone service will be able to vote -- and to have those votes counted. Unlike Cingular's sponsorship deal with American Idol, no single mobile phone carrier anted up for Big Brother 6.

Mr. Roeding said he was thrilled with the August Big Brother premium text-messaging contest's results, which generated about a half million viewer responses. However, he was reticent to discuss any of the deal's details, including how many of those mobile phone users dropped out before opting in to pay the 49 cents, how much the promotion overall generated in revenue, or whether it actually covered CBS' development cost.

Splitting the money

He also was circumspect about how the proceeds of the votes were shared among the parties. According to industry experts, however, most deals involving the emerging media are structured so the wireless service carrier, the content provider and/or network, and the aggregator (an agency that irons out the kinks in the connectivity among the carriers) share proportionately.

Because of the different ways of paying for votes, it is difficult to put a precise number on the potential text message voting offers for the networks in terms of revenue. But those dimes can add up. Fox, for example, reported that American Idol viewers cast some 500 million votes this season alone.

Experts in the area said text messaging deals cost out of pocket anywhere from $10,000 to $150,000 depending on scale and complexity. For some programs, the cost to marketers of sending out a text message could be as little as less than one cent, making the return on even a 10-cent vote cost effective.

35% to 50% split for wireless providers

Of the revenue generated from consumers for participating in the voting, anywhere from 35% to 50% typically would go to the wireless service providers, depending on the deal each carrier strikes for the project. That percentage often varies by factors including the volume of messages received and the cost of the vote to the consumer, with the carrier taking less if the price is more than $1.

Pamir Gelenbe, director of corporate development and co-founder of mobile technology solutions provider Flytxt, said that in Europe and other nations, the premium text-messaging price point generating the maximum results is converging at about 50 cents. "Any more and the numbers [of participants] drop off quite steeply," he said.

Another share, about 20% or more, goes to the TV network, along, possibly, with others in the content production chain. A smaller percentage, perhaps about 10%, goes to aggregators or other mobile marketing companies that deal with the technical complexities of carrying out the program, such as standardizing the user interface across carriers and phone models. In other words, the visuals and quality of the experience should be as close as possible on a Verizon Wireless Motorola phone as it is on a Cingular Wireless Nokia phone. In the case of the CBS Big Brother promotion, the technical partner was GoldPocket Interactive and m-Qube.

Premium charges deemed imperative

Regardless of how the pot is divvied, Mr. Roeding said the premium charges are imperative because the mobile phone needs to be developed around a viable business model. "The idea is not to get the most out of the consumer," he said. "How do you get a media giant to move if there's no business model," he said.

Maybe by noting that the mobile phone is one of the best devices to interact with TV programming, said Julie Ask, research director of Jupiter Research. When a show uses audience text messaging as a way of impacting its outcome, it creates a whole new incentive for viewers to stay tuned -- and maybe not TiVo -- through commercials as quickly.
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