U.S. carriers are the latest to discover that half of the traffic outside their walled gardens is related to adult content. Fear is trumping greed for the moment, but according to the Yankee Group report, Child Protection Unlocks Wireless Adult Content Market, the two can work together--if carriers can develop a solid mechanism for protecting minors, as Vodafone UK has done, and they can safely profit from the opportunity.
PhoneErotica.com, controlled by wireless startup PhoneBox Entertainment, receives more than 75 million hits per week. Most of these users only pay airtime because the service is initially free. The company decided against billing directly via credit card and instead waits for carriers to enable use of their billing systems. Adult content providers pay high tariffs to credit card companies (10% to 15%), but this is not the reason that PhoneBox Entertainment prefers to deal with wireless carriers. The company claims that less than 5% of visitors to wireless adult sites will enter credit cards, versus over 30% who are willing to put the charge on their phone bill.
However, most customers of wireless adult content, especially in Europe, find services by sending a premium SMS message, rather than browsing to a WAP site. In the premium SMS scenario, the cellphone carrier arguably distances itself from the content. The carrier can claim that its relationship to the adult content industry is similar to the landline operator's relationship with a sex hotline, which relies on the following logic: "I have a network and a billing mechanism...and I cannot be responsible for the content flowing over that network."
Posted to the site on 28th October 2004
Posted to: www.cellular-news.com/story/11262.php