Tom Uhart explains why it is vital for the industry to get its sums right when it comes to settlement procedures
Through 'revenue-share' business models, operators and content providers have found a way to share incentive and reward, and this has resulted in the recent explosive growth of mobile content.
As a result, operators are finding themselves at the centre of mobile content value-chains, with the need to calculate revenue splits based on data transactions. This is not always trivial; the simple retail models involved in mobile content purchase do not translate into basic wholesale models between operators and third parties. Even a straightforward ringtone download scenario can involve the operator settling with both a content provider and a digital rights management entity.
As the market moves on a pace, operators will begin to enter ever more complex value-chains. Free in France, for example, is now offering 20mb ADSL that will certainly result in video and music on-demand offerings based around deals with content providers. In this context, settlement is set to become a key component of the business support systems architecture.
Traditional retail billing platforms offer low levels of assistance for settlement, typically supporting simple models such as sponsorship or fixed percentage revenue-split per transaction. In order to manage more complex settlement models, operators are often resorting to manual or semi-manual calculations based on data warehouse extracts and Excel spreadsheets. These often involve the operator's IT, marketing and finance departments, all of whom need to communicate with one another. The results are far from audit proof and the method raises a number of key issues.
Disputes between parties -- operators, content providers and media companies, for example -- are commonplace, and notoriously difficult to reconcile. Each organisation holds their own records, which they produce as evidence during such disputes, and agreements can entail significant human effort and service downtime.
With increasing complexity in the behind-the-scenes B2B business models, manual settlement no longer presents a viable solution. Now is the time for organisations involved in complex billing scenarios to take action. Opting for the low levels of support offered by traditional billing platforms, and continuing to fight ongoing payment disputes should both become a thing of the past.
The time is ripe for operators involved in revenue-sharing models to consider installing a 'deal management and settlement' platform. This will enable them to offer the types of agreements needed to attract and retain the best partners -- a key competitive advantage in offering compelling data products and services.
Today, the core business of operators is not to create content, but to enable its distribution. As key players in new value-chains, operators must be able to stay on top of their revenues to ensure a healthy bottom line. And, they must aim to stay one step ahead in terms of back-office support.
A deal management system enables specific settlement rules and tariffs to be defined, managing individual events and simplifying new revenue streams. Such a solution has the ability to settle disputes on a level playing field. The parties involved in the transaction can then monitor the success of the content, and feed accurate findings into their marketing planning.
The market for content is booming, and the time is ripe for operators, content providers, media companies and billing companies alike to capitalise on its exponential growth.
Exciting times lie ahead -- but only for those who get their settlement pitch right. n
Nimbus Systems were an exhibitor at Billing Systems in London. For further information see www.iir.co.uk/billing
Tom Uhart is co-founder and managing partner of Nimbus Systems www.nimbussys.com