SMS is the new black

A review of mass market mobile apps

12 Days of Christmas – Voice SMS

Posted by Admin on December 24, 2008

Today’s Christmas article comes from Tom Clayton, President and CEO of Bubble Motion.

Bubble Motion is a company I’ve had the pleasure of working with for a short while (I also wrote about them here). What they offer is Voice SMS and the concept is great. It combines sending an sms, which doesn’t allow the recipient to hear your voice (with all its added emotion and sincerity – or sarcasm if you prefer), with leaving a voice message, which you don’t want to leave because you phoned up to speak to the person.

Here’s Tom’s view on Voice SMS in Europe

– – –

thomas_claytonVoice SMS has been an undeniable success story in many countries. Users around the world have embraced Voice SMS because it injects fun and emotion into their messages, and provides a fast, convenient, and efficient way to communicate. Because the service is so simple and works on virtually every handset, users have spread Voice SMS virally to their networks of friends and family. Voice SMS is already available to nearly 250 million subscribers — and the next stop is Europe.

So What is Voice SMS?
Voice SMS allows you to send short voice messages (typically 30 seconds) directly to anyone in the world – without ever calling them. It is an asynchronous and non-intrusive service (like SMS or email) which allows you to communicate without getting into a live conversation. The recipients instantly receive a notification which prompts them to listen and then reply to, forward or save the message.

A big part of the attraction of Voice SMS is that it allows the user to convey more emotion and feeling in their messaging, adding a personal touch to each message they send. This is particularly important to the youth market, which represents the majority of Voice SMS early-adopters. Interestingly, however, while Voice SMS adoption starts with the youth market, it quickly spreads to the older generation. As the youth begin Voice SMSing (or ‘bubbling’, as it is coined in many countries), the parents get hooked by the service’s simplicity vs. typing an SMS as well as the emotional attachment to hearing their kids’ or grandkids’ voice.

Mobile operators have demonstrated that Voice SMS services have not cannibalised existing revenues from voice minutes or SMS. Studies have shown that people are actually communicating more when Voice SMS becomes available to them – and that this new communications medium has created situations where people feel compelled to communicate where they were not communicating before. Now, when users are flirting with their significant other, singing ‘happy birthday’ to a friend, forwarding jokes and songs, or are unable to text because they are driving, Voice SMS has become the medium of choice.

Users are also ‘bubbling’ at times when they do not have time for other forms of communication. Busy young professionals have found that they can communicate far more complex information, much more quickly, by using Voice SMS. Many times, users don’t have the time or patience to write 3-4 text messages to convey a message that could be spoken in 30 seconds. This group of users is typically using Voice SMS to plan group events, or to send quick but important messages to friends and family such as birthday greetings or congratulations.

Even the operators who have launched the service have been shocked by the impressive uptake of the service. For some operators, over 35% of their subscribers use Voice SMS, leading many operator CMOs to now expect Voice SMS to be one of their most lucrative VAS services. For an operator community that has had so many disappointments with interesting, yet ultimately unsuccessful new services, having a new, exciting, revenue-generating mass-market product has been a very welcome surprise.

What Voice SMS is Not
Voice SMS is even easier to understand when you are clear about what it is not. It is not voicemail, it is not MMS, and it is not voice-to-text.

The use cases for voicemail are quite distinct from Voice SMS. Operators who have deployed Voice SMS typically see millions more Voice SMS messages every month than they have ever seen on their voicemail system. Voicemail is intended for users who actually want to speak to the person, but because the person was busy, out of range, or simply not answering, the sender is forced to make do with the voicemail – this is unintentional messaging. Voicemail systems are also not capable of cross-network messaging or group messaging.

Voice SMS is also very different from MMS. MMS is typically a cumbersome user experience with ten or more clicks to send even a short message or picture to someone. Once you have gone through the trouble of creating an MMS, there is still no guarantee that your message will arrive at its destination, as not everyone has a compatible handset. Even if the recipient is able to hear the message, it is extremely difficult to reply to the message with voice (with Voice SMS, replying is as simple as pressing the 1 key!). So while MMS serves as a useful, albeit expensive, vehicle for one-way sharing of files such as pictures, it does not serve as a compelling viral messaging application.

Finally, Voice SMS is not voice-to-text transcription. Voice-to-text transcription is typically a premium subscription service on top of a user’s existing voicemail account. Even in countries that have high voicemail penetration (there aren’t many), voice-to-text transcription is expensive, prone to low accuracy rates, and supports only a small handful of languages. Because of this, it has remained primarily a niche application for working professionals. With Voice SMS, however, the sender speaks on one end, and the recipient hears their spoken word on the other end. Prompts and notifications for Voice SMS can be in any language that the recipient wants to use, creating a truly mass market service.

What is Voice SMS Worth?
Operators can choose whatever price level they want for the service, but the ‘sweet spot’ price is typically between the price of an SMS and the price of one minute of a voice call. User studies and price elasticity analyses show that pricing Voice SMS slightly above text SMS leads to the highest usage.

The billing process for Voice SMS is very straightforward to the consumer and operator. Almost all operators bill for the service on a per message basis, an easily understood and accepted model used for text SMS. Operators also have the flexibility to offer packages and bundles for Voice SMS, to sweeten the deal for heavy users. (This works particularly well for top users – who tend to send over 3,000 Voice SMS messages per month!)

The attraction of Voice SMS to operators has been clear. Operators gain a new mass-market service which gives an immediate lift in ARPU; it can be deployed for all their subscribers without any client software or end-user behaviour change. Their users don’t have to subscribe to the service – once Voice SMS is deployed, anyone can use the service from day one. On top of that, a deployment takes just a few weeks, can be set up as a deployed or hosted service, and typically leverages under-utilized network resources.

Why Voice SMS is a Good Fit for Europe
When Europeans first hear of Voice SMS, they often question whether this service would find a home in Europe. This is because virtually all of their subscribers are literate, so there is no ‘problem’ with text-based SMS. However, user data shows that 98 percent of Voice SMS subscribers can read and write – showing that illiteracy is actually not a factor in Voice SMS’ success.

While 7 percent of users have cited the multi-language capability of the service as a reason for use, over 70 percent of our current users can read and write English – even in non-English centric countries. Moreover, developed and highly advanced countries like Japan, Turkey and Hong Kong have fully embraced Voice SMS – with some of the highest viral uptakes of any country.

After explosive growth in the Asia-Pacific region, expansion into Europe is the next logical step for Voice SMS. Like Asia-Pacific, Europe has a high penetration of asynchronous communication. And like many Asian countries, Europe is home to extremely smart messagers who understand the different circumstances when it is right to do one form of communication over another. Europeans can tell you exactly when the circumstances are right to contact someone via a phone call to a landline or to a mobile, versus a text message or an email, or even IM.

Also, Europe has a large number of busy, time-constrained commuters, so when text SMS would not be safe or practical and a voice call is not required, Voice SMS fills the messaging need. Text SMS will certainly not go away, but Voice SMS has entered the scene as a very compelling alternative that is efficient, highly personal and very viral.

The Future of Voice SMS
While Voice SMS currently is primarily a peer-to-peer messaging phenomenon, the potential to expand further into audio content is not only unavoidable, but is also the obvious next step. With innovations rolling out now that include one-to-many broadcasting, viral song-dedication services, and user-generated content rating applications, operators are now embracing the marketing and advertising potential with Voice SMS.

Voice SMS is a success story that cannot be ignored. It is a new communications medium that fills many gaps left by other forms of communication, with tens of millions of loyal users. Having already made a massive impact in the Asian market, operators need to get ready and get ahead – Voice SMS is coming to Europe.

Advertisements

One Response to “12 Days of Christmas – Voice SMS”

  1. […] 12 Days of Christmas – Voice SMS « SMS is the new black […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

 
%d bloggers like this: