Mobile devices have changed the way we produce and consume content. We share our photos, videos and stories through our social networks. We use apps for productivity and work. But of course, entertainment is one of the key drivers of growth — music and movies are, after all, a big industry that serves a mass market.
For both movies and music, the subscription approach has been a fairly popular one, with the likes of Netflix and Spotify taking center-stage among mobile users. But there is still value in offering tracks and movies on a piecemeal approach. Songs on iTunes are US$0.99 apiece, after all. And movies can sometimes be released for download on iTunes just a few weeks after their silver screen outing.
While the declining cost of buying tunes and films in digital formats has enabled access to more users around the world, payment systems can still be a limitation. Take for instance the Philippines, which reportedly has an 11 percent credit card penetration rate. In a country with more than 100 percent mobile penetration, there is a big gap between mobile device availability and access to premium services.
Here’s where a local startup called Apptivate comes in. We earlier featured how Apptivate allows mobile users to purchase apps using credits. Previously, these credits can be bought using Apptivate scratch-cards, but now the Kickstart-backed startup has been accepting payments through prepaid cellular credits or one’s mobile bill, through Globe Telecom (which is actually Kickstart’s parent company).
Buying movies from prepaid credits
Apart from apps, Apptivate now offers movies for download from iTunes. As with apps, you can purchase these movies using coins. For instance, you can buy a copy of Iron Man 3 for 1,150 coins. Older (or less popular) titles retail for 750 coins. You don’t have to worry about the need to pay through credit card. You can send an SMS code to 2662 to convert your prepaid credits to Apptivate coins (send APP100 or APP200 to receive credit for 100 or 200 coins, respectively). This works for both postpaid and prepaid users.
Coins are equal to Philippine Peso value, so you essentially pay the nominal amount in coins in its equivalent peso value. PhP1,150 (US$26) might sound steep for a movie download. However, considering the same titles will usually come out on DVD months after theatrical release — and for approximately the same amount — this might be a good deal.
Going beyond apps, music and movies, one might wonder if the ease of access to titles from the iTunes movie library will help address the rampant piracy of films and music in the local scene. Illegal copies are often hawked by ambulant vendors for as little as PhP50 (about US$ 1.25) apiece, many of which are supposedly clear DVD “rips”. More tech-savvy users will easily find free copies of DVD rips on Torrent sites like The Pirate Bay and Kick-Ass Torrents (which, incidentally once came with a .PH domain, but has since been banned).
I can see a few possible limiting factors here. First, apps and music tracks are quite easy to download because of their relatively small size. Movies are significantly larger, though. Users might not have the patience to wait a couple hours to complete a download with the slow average broadband speeds in the Philippines. Watching from a stream might be convenient, although sometimes heading to your friendly neighborhood DVD hawker might be more convenient.
Secondly, there’s the issue of portability. Unless you have a properly-configured setup, you might be limited to watching the movie on your computer, tablet or smartphone, instead of enjoying the feature film on your big-screen TV.
Third, there’s the issue of prepaid load. A considerable majority of Filipino mobile users are on prepaid, and most of these would usually have minute amounts of credit on their account. After all, the theoretical minimum top-up amount for Globe is PhP1 (about US$0.02), and most users are not likely to have more than the requisite PhP750 (US$17) on their accounts to buy a movie. Perhaps the bigger target for Apptivate are postpaid users, who can enjoy the convenience of watching movies from iTunes and then paying later when their monthly bill comes. (But wait, aren’t post-paid users likely the ones who also have better access to credit cards?)
An enabling technology
These concerns notwithstanding, easy access to premium content through carrier billing is certainly an enabling technology for mobile users who are limited by not having credit cards. But why stop at movies? If we can buy apps and movies using our bills, it might be a good idea to use these credits toward the purchase of other goods as well. Perhaps this can be expanded to other markets that also face the same payment system limitations. Could this be an idea worth looking into?