New research from MultiMedia Intelligence has identified three buckets of revenue leakage in mobile content commerce.

Content providers and wireless carriers should ensure that mobile content is about delivering the right product for the right device, managing access rights and making sure that consumers can use the content. Profitability is affected if these issues aren't addressed properly.

"Ultimately, the carriers are affected the most," said Frank Dickson, cofounder and chief revenue officer of MultiMedia Intelligence, Phoenix.

"Carriers are looking to content to help maintain or improve average revenue per user," he said. "However, this comes at a risk. In the end, the carrier is held responsible for the customer experience, regardless of fault. With high customer acquisition costs, they often fix an issue at their own expense to make the customer happy."

The reasons for the leaks differ by the type of leakage.

The first big bucket of revenue leakage is refunds. This happens for legitimate reasons including incomplete downloads or when the wrong content was delivered. Or a consumer may be signed up for a subscription or registered for a purchase that she did not make.

"A bigger problem is when customers are offered a special or free product without making it clear that the result is a subscription to a service," Mr. Dickson said.

"This is such a problem that carriers such as AT&T demand that all subscription requests are processed by them," he said.

The next source of revenue leakage is payment processing for providing content to a consumer without being able to collect payment. Fraud or other sources are blamed for this issue.

For instance, a prepaid wireless subscriber may supposedly buy content online and charge it to his or her account. But there may not be sufficient funds available on the prepaid account.

"This is a significant issue and can range as high as 5 percent of revenue," Mr. Dickson said.
Customer service is the third bucket of revenue leakage. Customer service calls is the culprit in this case.

Essentially, excessive customer service call time is caused by the lack of an automated Web interface that supports self-care. The customer service representative may not have access to the pertinent information presented in an efficient manner to efficiently respond to an inbound call.

Mr. Dickson sees a couple of ways to address these problems.

First, carriers should get aggressive in forcing content providers to follow Mobile Marketing Association guidelines nationwide and in Europe. The goal is to eliminate rogue off-deck content providers.

Carriers are taking note. Sprint Nextel recently introduced strict guidelines and enforcing them with penalties for content providers.

AT&T Mobility took another route, requiring all subscription-type relationships to be processed and controlled through its billing support system.

Next, a strong content enablement platform curbs issues by creating transaction transparency, offering records of what was bought, the purchase date, the transaction amount and use rights. These platforms distinguish themselves from me-too platforms.

The platform manager, whether at a carrier or an off-deck provider, needs management tools to facilitate oversight, Mr. Dickson said.

Refunds need to include complete information records and automated refunds that reverse the charge and charge back the revenue from the content provider, he said.

"Minimizing complexity and maximizing accuracy decreases cost," Mr. Dickson said. "Also, automated and accurate processes for customer service must minimize service call response time.

"Finally, automated, accurate and robust reporting systems minimize bad debt and fraud," he said. "Problems that can be prevented include incorrect billing, insufficient sales confirmation or failure to validate that a subscriber has the proper funds to pay or has a handset that can properly use the content."