New wireless Internet browsing technologies may be giving rise to new business models for wireless content developers, and it appears the nation’s No. 1 wireless carrier, Verizon Wireless, is looking to spur the market.
At this year’s CTIA Wireless I.T. show in Las Vegas, Verizon Wireless passed out pamphlets encouraging developers to sign up for its new “Nexxt: Put your model where your mouth is” campaign. The pamphlet promised the new program would promote “groundbreaking performance-based business models, and the opportunity to share in premium content revenues.”
A Verizon spokesman declined to provide further details on the initiative, except to say that the carrier likely will release additional information early next year.
The effort appears to be an attempt to develop wireless Internet sites that the carrier can offer at premium prices. For example, Verizon users would pay an extra $1 per month to visit Yahoo!’s wireless Internet site, and Verizon would share a percentage of that $1 with Yahoo!. Thus, Yahoo! would have a financial incentive to develop a wireless site that users would pay to visit. Some in the industry have pointed to such premium offerings as one of the most important elements of a successful wireless data business.
“The lack of a business model has really stymied … interest,” said Seamus McAteer, managing partner and senior analyst at Zelos Group. “Why do it if you’re not going to make any money?”
Most U.S. carriers charge for wireless Internet access, either per megabyte or as a flat monthly fee. However, those traffic revenues typically are not shared with the companies that developed the sites. The model is much like that of the wired Internet, in that Web site operators don’t make any money from simple Internet surfing. However, the business models that encouraged the development of wired Internet sites-advertising and e-commerce-don’t readily translate into the wireless realm. Thus, there is little motivation for companies to develop wireless Internet sites.
However, there seems to be a push to change the situation, mainly driven by the new XHTML standard. Indeed, Verizon’s new Nexxt campaign mentioned XHTML specifically. “You get a much more flexible and larger palette” using XHTML, said Zelos Group’s McAteer.
XHTML is slowly replacing WML as the programming language for the wireless Internet and is supported by version 2.0 of WAP. While sites developed using WML are typically black-and-white, text-based menus. Sites built using XHTML feature colorful graphics and features reminiscent of the wired Internet. Thus, carriers and content developers could conceivably charge a premium for access to XHTML sites.
“I think most serious carriers next year will extend their bill-on-behalf-of services to content rendered through XHTML,” McAteer said.
“Not only does (XHTML) allow us to create premium content, it also looks great, and it’s fast and simple,” said Greg Clayman, vice president of marketing for community messaging company Upoc.
Indeed, AT&T Wireless Services Inc. has already set up a premium charging model for its newly relaunched mMode wireless data offering. The new mMode offering features XHTML sites and allows content providers to set premium charges for access to the sites. Clayman said Upoc is offering its XHTML site on AWS’ mMode for $2.99 per month. An AWS spokeswoman declined to discuss the carrier’s revenue-sharing agreements for mMode.
Although most new wireless devices will support sites rendered in XHTML, it’s unclear whether the nation’s carriers will follow AWS’ lead and charge for those sites on a premium basis. Sprint PCS offers several XHTML devices and sites, but charges only a flat rate for wireless Internet access.
