Among the many challenges facing the off-deck mobile content marketplace, and what I'm hearing on the ground at the (informa telecoms & media) Off-Deck Mobile Content 2008 conference in Boston centers on the billing mechanism. The current prevailing billing mechanism in off-deck mobile content - premium SMS - is not adequate, not reliable, not profitable and is not working. I've heard estimates that revenue leakage is up to 30% in mobile content. There is also the profitability drag in the form of the carrier keep (revenue share) - 30-40% share range. This compares to the 3-5% range that credit card companies keep. So, how can the market expect to build a business on a platform that is so unreliable and in a market that does not allow for profitability?

There is clearly room for alternative billing mechanisms, such as WAP billing, and alternative payment mechanisms (to carrier billing), including credit cards, PayPal, etc. This does not preclude the wireless carrier from playing in the ecosystem and continuing to add value where they are strong - pipe, on-deck billing and their customer data - but maybe they should consider letting go of things in the off-deck environment that others may be able to do better and more efficiently (e.g., credit card companies, other third parties).

Sitting back at (informa telecoms & media) Off-Deck Mobile Content 2008 conference at the Radisson hotel in downtown Boston, I was not struck by the numerous challenges facing the ecosystem, as I've heard all of these before. What I was struck by is how little control the individual ecosystem participants have in solving these challenges. It will take the entire ecosystem to make the needed changes to move the market forward, including content owners, aggregators, billing/payment enablers, wireless carriers and trade associations (to drive some additional needed standardization).

Brian Casazza, CEO and MD Americas, Zed, a mobile entertainment company, noted that the key challenge for content providers and wireless carriers is building a profitable business in off-deck. There are numerous contributing factors on both sides. More importantly though Brian presented what he thought needed to happen in the ideal market scenario:

continued...

Mickey Alam Khan reported today in Mobile Marketer that pizza chain Papa John's International Inc. has hit a milestone - $1 million in revenues from mobile web sales with just six months of offering the capability.

While mobile web sales pales in comparison to their online sales (which according to the article topped $1 billion this year, up from $400 million in 2007), it does show that for consumers the value-proposition of ordering on the fly is resonating. Papa John's mobile investments include its mobile web presence, SMS ordering systems and iPhone app, built in partnership with WiseOutlook.

It helps that consumers can discover the mobile site both on their phones and online. Also the mobile site itself is clean, simple and focused on key mobile needs - placing orders, viewing the menus, account registration (existing online or new), restaurant locator (tied to Google Maps), receiving special offers (via text or email), among others. Next up for Papa John's in mobile:

continued...

As reported today by Tricia Duryee in MocoNews, we can add Blaze Mobile to the roster of companies attempting to service the nascent mobile payments marketplace with its Blaze Wallet and Blaze Movies. Blaze Wallet lets people check bank accounts, pay bills, make transfers and access Blaze Movies. Blaze Movies lets consumers buy movie tickets up to seven days in advance.

Blaze has an existing relationship with Mastercard and attempts to differentiate itself from alternatives via the user experience and integration with multiple financial institutions and reward/loyalty programs. The primary challenges for Blaze in this very nascent market for mobile wallet services include:

continued...

PayPal in partnership with Verisign's Messaging and Mobile Media Division, has introduced new functionality aimed at adding another level of security to account access from mobile phones. The new feature lets customers choose to receive a six-digit security code via SMS prior to logging into their acccounts (which involves typing in user names and passwords). This feature functionality, two-factor authentication, mirrors what consumers are used to when accessing financial institutions online and is aimed at preventing and curbing fraud. PayPal is leveraging their online presence and house banner ads to educate consumers about the feature, and are also targeting customers who have experienced fraud.

PayPal Mobile currently lets consumers check balances, send/request money and make payments (buy stuff - eBay items, mobile web site purchases). While certainly still limited in the U.S. market, which has been dominated by carrier-billing, the use of alternative payment mechanisms (e.g., PayPal, credit cards, etc.) is expected to grow, particularly with increased consumer usage of mobile web. Security is always of paramount concern, so adding another layer of security and something that consumers are aware of from the online environment is important. This can only happen if carriers also cooperate enabling consumer access.

Gap, Target, just a few of the retailers that are leveraging the iPhone user and iPhone App Store to build-up their mobile presence. And, just in time for the holidays. Created by AKQA, the retailer apps go beyond the traditional mobile web presence and look to entertain and potentially drive foot traffic into brick & mortar stores or better yet drive mobile commerce. See Tricia Duryee's story on MocoNews and MacWorld.Com article for more details.

From all of the chatter out there about the impact of the economy on ad spend, mobile continues to be a bright spot, particularly for brands looking to test/innovate and target early adopters.

Mogees, a mobile billing start-up, yesterday announced that it plans to release an SDK Beta for Android. Beyond its open platform, key to driving innovation in Android will be consumer-friendly billing/payment mechanisms that reward/incent developers. Billing for Mogees include credit card and Paypal account, which are relatively new payment mechanisms for mobile consumers. The vast majority of mobile content purchases appear on consumers' wireless carrier bills. As long as it is secure, and easy (tightly integrated into the purchase process), I suspect that consumers will not have a problem with it. Also, because the carrier will not be a part of the billing/payment process, the business model looks to be more favorable to the developer, as reported by MocoNews.

PNC Financial Services Group is adding to its mobile banking services with technology from ClairMail.

The ClairMail System, which the company describes as enabling 2-way mobile phone-based customer interaction, is a modular system that takes advantage of the SMS functionality built into nearly every handset. This means that PNC customers can access their accounts from their cell phones - regardless of the make, model, OS or carrier.

PNC is also adding text alerts for such things as account security overdraft notification and other events.

ClairMail says it processes millions of mobile banking transactions every month and sees more than a dozen transactions per user per month.

Citi has partnered with m-commerce outfit Firethorn to unveil Citi Mobile for Cards, a new service that lets Citi credit card users securely access real-time details of their accounts from their cell phones.

The free service is available to AT&T and Verizon Wireless customers who use their carrier's mobile banking app.

So, consumers who want to use their Citi card to buy that gift they learned about from their Amazon SMS alert can use their phone to check their real-time balance, how much more they can put on the card before sending in a payment, view recent transactions and see how their rewards programs are doing.

Since security is a huge issue, Citi Mobile for Cards secures its transactions with data encryption and monitors the service for fraud as well. For added security, users can only access their accounts from the phone that is registered with the service and after entering a PIN. Also, no personal info is stored on the phone.

Digital commerce software house Valista is getting into the gaming business. Or, more specifically, the in-game commerce business.

The Irish company has launched the In-Game Commerce Solution, a new offering that makes it possible for mobile and online game publishers, social networks, virtual worlds and the like to transition from a one-shot license fee to a revenue model that earns them money on an ongoing basis, says Valista CTO Fran Heeran.

With In-Game Commerce, companies can offer time-based play options, sell digital items during game play and sell access to additional levels in-game, for example. The system also allows for mixed virtual and "real" commerce and allows providers to accept credit and debit cards, add-to-bill payments, virtual currency and loyalty program points.

(More from Heeran about In-Game Commerce after the jump)

continued...