The annual revenue generated by mobile content is predicted to surge from $40 billion to $65 billion by 2016, according to new information released by Juniper Research. This jump will be driven primarily by the greater market penetration of tablet devices, and by tablet game, video and eBook purchases, Juniper predicts.
A Shift Toward Tablets
Currently, smartphones outnumber tablets on the market and generate more mobile revenue, but that trend looks to shift over the next three years.
Additionally, more and more consumers will be moving from dedicated portable gaming devices (such as Sony PS Vita and Nintendo 3DS) over to tablets for their gaming needs, contributing to the upswing.
Juniper notes that right now eBooks are the largest mobile content revenue stream on tablets. But nearly 50% of all mobile content revenue is driven by music and video, and tablets are seeing a sharp increase in paid and free video apps.
Aside from tablets, better, more efficient mobile content models are driving this upsurge in revenue.
New Ways to Pay for Apps
The old model for monetizing apps used to be a payment per app, with payments made through an app store. But according to Juniper, an overwhelming number of apps are now being offered free for download, with additional paid options / in-app purchases / freemium upgrades, with payments made through a number of different options: credit cards, direct carrier billing, Premium SMS (PSMS), virtual currency and PayPal.
One of the driving factors behind the opportunities to earn money on already-purchased apps is the increased connection between gaming and social networking.
More In-App Billing Options
Credit / debit cards continue to be the primary way users pay for in-app purchases and other over-the-top services such as Netflix and Hulu. However, stores such as Google Play and BlackBerry App World also use direct carrier billing to facilitate purchases.
With direct carrier billing, there’s no need for users to enter their credit / debit card. This removes one step from the purchase process and facilitates one-click purchasing. Direct carrier billing also contributes to a rise in impulse buying. For instance, Google Play saw three times as many carrier-billed transactions in 2012 than it did in 2011.
Revenue from direct billing of carriers added up to more than $2.3 billion in 2012 and is estimated to grow at a rate of 41.14 percent until 2017, to reach $13.1 billion.
But though more billing options may mean increased revenues, according to Juniper, fragmentation and app visibility will still be a problem – especially given that users can choose from over a million mobile apps spread across several operating systems.
What trends in mobile revenue do you see. Discuss them in the comments below.