New 2-Sided Markets?

Two-sided markets have existed in the content business for quite some time, even if new versions have appeared in the form of ride-sharing and room-sharing services. Such two-sided markets, with one salient exception, might be hard to create, in the mobile industry.

In the older version, a market maker makes money from both “buyers” and “sellers” of some product, even as the market maker primarily connects buyers (content consumers) with sellers (content owners).

Video subscription providers have earned revenue by selling consumers subscriptions (access) to desired content, but also have earned revenue from advertisers and content owners (local advertising the former; carriage fees in the latter case). More recently, content owners have turned the tables and now generally extract carriage fees (affiliate fees) from distributors.

But distributors still earn subscriber fees from consumers and local advertising revenues from third parties.

The strategic issue for at least some tier-one communications service providers is how to create new platforms, supporting new markets, that connect buyers and sellers.

Some of the new platform opportunities are more traditional “one-sided” markets. Consider mobile advertising, where revenue is earned only on one side of the platform, from third parties that want to place messages reaching the platform’s users (mobile customers).

That likely will be true for most internet of things use cases as well, where network operators will earn revenues from enterprises or other organizations that want to place sensors into the environment. Revenues in that case are earned by supplying the connectivity for the sensor networks, from “one side” of the platform.

At least in principle, two-sided markets are conceivable, where the mobile service provider also operates at the application level, owning and then operating marketplaces that connect buyers (job seekers, content seekers, patients) and sellers (employers, content suppliers, medical services providers).


Popular posts from this blog

Voice Usage and Texting Trends Headed in Opposite Directions

Who Are the Key Telco Competitors?

Jio is Succeeding at "Destroying" the India Mobile Market