As more digital content migrates to online platforms, the trend moves away from content ownership and towards content access. It also means that the device on which you pay for the content may not be the device where you primarily access that same content.
The value of digital content transactions paid for by telecom service provider billing is expected to reach $47 billion by 2020 -- that's more than four times 2015 results of just under $11.3 billion, according to the latest worldwide market study by Juniper Research.
Exploring Digital Content Payment Options
According to the study findings, Apple’s decision to test telecom carrier billing in Germany and Russia is likely to drive a substantial number of new deployments in the medium term.
The move will be essential if Apple is to monetize unbanked owners of refurbished mobile devices in emerging markets, who would otherwise be limited to paying for content via iTunes gift cards.
Mobile network service provider billing solutions could be a key means of monetizing content purchased within an array of environments, including connected cars and for in-flight infotainment.
However, the research found that the operator practice of setting daily or monthly carrier bill spend limits at a low level to minimize exposure to fraud or compensation claims was counterproductive.
"If you have a daily spend limit of $20 in place, consumers are severely constrained in the amount of content they can purchase, particularly given the fact that many content bundles – such as Clash of Clans gems bundles – are priced at close to this level," said Dr. Windsor Holden, head of forecasting and consultancy at Juniper Research.
Online Payment Market Development
Meanwhile, Juniper analysts believe that even though other online payment types -- such as PayPal -- were likely to experience significant growth, the majority of payments (69 percent by value in 2020) would continue to be made via bank debit and credit cards.
Juniper claimed that this would also remain the case for purchases made on mobile devices, with consumers increasingly using smartphones and media tablets to pay for higher-value content which is subsequently consumed on connected TVs or video game consoles.
Overall, Juniper Research estimates that digital content revenues will increase from just under $140 billion worldwide in 2015 to $180 billion in 2017.