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Hi all,

An interesting article from Saturday's NY Times:

(Everyone should be able to link to it still, I believe. Don't know how long it will remain active).

Basically, it discusses how the popularity of i-Mode in Japan has led to some interesting business developments.

First, content providers are able to charge subscription fees for their sites and services, because mobile phones make it much easier: they simply add it to the user's phone bill. Secondly, people are more willing to pay for content over mobile devices because a) they don't have to use credit cards, b) there isn't the tradition of free content as there is on the "wireline web" (particularly here in the States), and c) content and commerce sites are pre-screened by the wireless providers, increasing the trust of users.

As a result, the article notes that plenty of Internet-based content companies, which are having a hard time making money here in the US, are raking in plenty of dough in Japan.

Also interesting is the role of the wireless carriers: not only do companies (primarily NTT DoCoMo) get higher monthly fees from extended use, they also get 9% of whatever service fees the content companies charge.

It makes clear what a cash-cow 3G could be for wireless providers; no wonder the bidding went so high in Germany. In many ways, the position of the Japanese carriers reminds me of AOL's position in the early days of the Internet: a provider of online services that earns money from both the monthly access fees and a cut of any service revenues generated by partner companies. A pretty sweet business model, I guess.


Fool on,


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