LIVE FROM NOKIA WORLD 2010: Nokia used an “Ovi Store State of the Union” presentation at Nokia World 2010 today to introduce a deviation from the industry-standard 70/30 revenue split where operator billing is concerned, promising that developers stand to make more money under its new regime.
George Linardos, vice president of Product, Media at Nokia, said that where operator billing is used, the company will offer a flat 60/40 split based on total revenue, whereas previously the 70/30 ratio had been maintained – but calculated after costs associated with operator billing had been deducted. With costs varying widely on a case-by-case basis, this was said to have added complexity for developers, who have been unable to accurately calculate their share of product sales before the funds appeared in their account. Scott Jensen, head of product marketing, Media, at Nokia, noted that with the current model, “there is not necessarily the level of predictability you would like in order to run the business”.
According to Linardos, the new model will mean that developers stand to make 40 percent more in sales where operator billing is used (although in a subsequent presentation 50 percent was used as a benchmark), with Nokia carrying any additional costs that are incurred. For credit card purchases, Nokia will maintain the 70/30 split which is already in place. The new model is effective as of 1 October 2010.
Significantly, Nokia is also set to support in-app purchases via operator billing, stating that “nobody else in the world can do this, nobody else in the world is doing this.” In-app operator billing will be supported by 90 operators, enabling this purchase model to be more widely rolled out in markets where customers do not use credit cards. Nokia’s in-app purchase technology is currently in a “closed beta” phase; a wider pilot is due before the end of 2010, with commercial launch slated for the first quarter of 2011.
Operator billing is clearly something that Nokia sees as a competitive differentiator, as well as something that can deliver significant increases in product uptake among consumers. It said that in “most markets”, in two-out-of-three transactions operator billing will be selected by customers if presented as an option alongside credit card billing. Linardos said that when it comes to operator billing support, “our competition is not there”: in a subsequent presentation, Nokia’s support for operator billing with 91 partners was compared with “0” for Apple’s App Store, Android Market, and BlackBerry App World – although in some cases, operator billing is believed to be in the pipeline for Nokia’s rivals.
In-app advertising plans
Nokia also announced its intention to support in-app advertising for Ovi Store products, with a private beta scheduled to take place before the end of 2010. Developers will be able to access advertisements from multiple ad networks, in order to optimise fill rates and rates achieved for ad impressions. It is currently seeking potential partners for the beta, as long as they meet certain criteria: developers must have free products available, develop using Qt or WRT, and be “capable of rapid development”.
According to Jensen, Nokia is not planning to take a share of revenue during the early stage of the trials, in order to build momentum for the service. He also declined to state what the revenue-share arrangement will be once it reaches commercial availability.