TextMarks will announce a new product tomorrow that allows publishers to charge people to receive breaking news and other information via text messages. It’s available now under a new “monetize” tab on the home page of the site.
To use this, a publisher signs up for a TextMarks account and chooses a price to subscribers (either $4.99 or $9.99 per month). Readers subscribe to the alerts via a Flash widget that’s embedded on a website or by sending a text message to 41411 plus a unique keyword, confirm the subscription on their cell phone, and then receive the alerts. The service is currently only available to U.S. cell phone users , using Cingular, Verizon, Sprint or Alltel services. Publishers decide what news is important enough to send out as SMS alerts. Up to 100 alerts can be sent per month to subscribers.
This is an excellent idea and could be a good revenue generator for blogs and other websites where readers will pay for instant notification of breaking news. The only downside - huge service fees. Carrier and TextMark fees eat up around 2/3 of the revenue, so publishers will only receive $3.00 of a $9.00 monthly subscription. Most of the rest goes to the carriers, and Textmarks keeps 15%.
TextMarks offers other products as well, including group messaging and free one to many alerts. It is one startup in the increasingly saturated U.S. SMS market. Mozes is a direct competitor, and 3Jam, Twitter and others offer somewhat overlapping services. See Marshall Kirkpatrick’s recent overview of eight SMS services for more information.
We’re probably going to be testing this service out in the near future to see if some readers have an appetite for instant notification of breaking tech and startup news.
I’m amazed by how consistently the TechCrunch readership manages to miss the point.
TechCrunch readers: YOU ARE NOT THE MARKET FOR THIS. Geeks already have a million ways to rip, mix and crunch their information in whatever form and whatever device they choose.
My personal bet is that 90% of the people reading this thread do not buy ringtones, because there are lots of ways to get ringtones on your phone for free if you know what you are doing. Guess what? It’s still a multibillion dollar industry, because most people don’t have the time, expertise or the inclination to mess around figuring out how to do it. They’d rather just pay the few bucks.
This service is for those people.
Dreadsword, I partly agree with you: 99% of publishers will not have content that is good enough to make people subscribe. But the beauty of this system is that Textmarks don’t have identify those niches ahead of time - they just need to put it out into the market and let those niches identify themselves.
David - fair enough. However, your point is to some degree self-contradictory.
i.e.:
- The target market for this is Jane & Joe public that downloads ringtones b/c they lack the technical sophistication / time / etc. to do otherwise.
- TextMarks is a premium product connecting blogs to cellphones for a fee (value proposition = timeliness) - which is a niche / early adopter product description if I’ve ever seen one.
So - while I agree that “successful” publishers may become visible by emergent usage patterns once the service is live, I would suggest that the disconnect between product positioning and target market described above will prevent the service from achieving enough critical mass for those emergent successes to … er … emerge.
Premium != Mass Market
Let me clarify. First off, let’s distinguish between blog publishers and blog audiences. You don’t have to be tech savvy to read a blog, even if audiences skew a little in that direction at the moment.
Second, the Textmarks widget doesn’t actually send blog updates or anything via SMS - the publisher can send whatever they want as a text message. The widget just makes it really easy to sign up.
People already subscribe to a bunch of crappy joke-of the day, pick up line of the day, and astrology services provided by companies like Jamster. This should make it easier for people who actually have good content to get it out there.
Ok - you don’t have to be tech savvy to read a blog: fine. Ignoring the current market skew (which IMHO is the sort of thing a business case should take note of), let’s reconsider the value proposition here:
- Timely access to select information.
Again, I’d ask everyone to really consider the user profile of a prospective customer here.
My conjecture has been that the customers with enough “need” to pay for realtime subscriptions of this sort are going to be either:
(a) tech savvy, in which case the product misses the mark, or
(b) a special niche user (refer to my original comment)
Your point about Jamster/etc highlights the user-profile disconnect: what added value is delivered by paying for realtime notification about content of the sort that the mainstream consumes? What need do the consumers of content like that have for paid, realtime notification? i.e.: timeliness is not part of purchasing decision.
Anyway, I think we can agree to disagree on this one, David, and let the market decide which of us was right!
“People already subscribe to a bunch of crappy joke-of the day, pick up line of the day, and astrology services provided by companies like Jamster. This should make it easier for people who actually have good content to get it out there.”
David: if you have good content that can realistically produce a large volume of sales, there is absolutely no need to give up two-thirds of your revenue to TextMark. If you have development resources at your disposal (or can afford them), you can build your own SMS delivery platform (it’s not rocket science) and the money you save by working with an SMS gateway will very quickly make up for the difference over giving away two-thirds of the revenue you give away with TextMark, especially the higher your sales volume. Or you can partner up with a mobile distribution company that can not only provide a delivery platform, but provide marketing assistance as well. If your content is good enough to drive volume, you’ll get a much better deal and much better service than you will through a pure one-size-fits-all solutions provider like TextMark.
Drama 2.0: the bulk of the 70% that we are retaining is for the carriers. If you are using premium SMS as a payment mechanism, you will have to pay 40-50% to the carriers no matter what gateway you use. In addition to that, you will have to pay for the non-premium messages that you send - not to mention all the other infrastructure needed. We estimate that our margin for this service will be 10-15% (depending on the specifics of each text alert). So, you could indeed increase your share to 40% or maybe 45%, by going directly with a gateway, but that will represent doing a lot of extra work that we are doing…
And, to reiterate what I said before: if anyone wants to handle payments themselves, or simply not charge, we have a similar service that is absolutely free. This premium service is meant for bloggers who want to charge for premium content and want to do so through the premium SMS functionality that wireless carriers offer.
It seems there are alot of people working on very similar concepts including my company. Ariel congrats on launching the service and getting provisioned by the carriers.
All,
SMS, and premium SMS is huge in Germany / Europe. SMS alerts have been around for a while and people are paying for it. But in regards to premium content most of the money made today is made through subscription models that everyone is trying to pull the users in to. In a result a lot of abuse happened in the last years and people got more and more skeptical about SMS / premium SMS service.
I can only advise you to offer the news at a cheaper price. A few SMS are just not worth 4.99$ or 9.99$, not even with the hottest news.
I assume that a lower subscription model is not attractive due to the poor payouts and the fact that you have to share the revenues with a third party, i.e. the content owner.
One good reason i like the service is because it feeds the long tail.
Maybe you should think about different pricing models or, and this has also been successfully tested in Europe, add some advertising at the end of every SMS.
Or what about if you let the content owner pay for the SMS alerts?
Or you guys collect the content through-out the day, just send one SMS alert at the end of the day and push the user to personalized WAP site?
You will figure it out.
Great discussion. We have a breaking news service via SMS which charges a monthly subscription. We’ve been in operation since May last year and operate in a developing country where ours is the only such SMS service.
My view is that the premium lies in the little beep and noise that an SMS makes. We believe it makes a difference to be alerted to a news item as opposed to 15 to 30 minutes, or 3 hours later, browsing the web to find out the same.
The fact that a news item is out there doesn’t necessarily mean we know it. On an off day when we are traveling, or been locked in meetings etc, our normal practices for monitoring news break down and we are vulnerable to not knowing whats going on. Well I am anyway : )
And many of us do care about certain news items to the extent that we would like to have it the moment its published, as opposed to finding out 1 hour later or even run the risk of not knowing it for a day or two.
But its a grey area and the margins are still in question like many have pointed out. Feel free to contact us to discuss this further.
best regds
Will probably be utilized by bloggers who are following breaking news. Wonder how big an economy there will be for it though - if everyone joins then no one has the advantage.