Non Stop MusicNon Stop Revenues

Dan BOABES

General Manager

Simplus - Romania

Who we are?•Simplus - part of the ParlaTel Group, dedicated to innovative mobile applications•ParlaTel is a Holding Group of companies, one of the main alternative telecom operators in Romania•ParlaTel lines of business:

-fixed telephony-ISP-Value Added Services

(Premium SMS, Premium IVR)

About Simplus•Simplus – mass mediae - revenue share collaborations•Contracts with 8 national TV stations

OTV

Strategy - I•Focuse to specialised TV channels:

•Music channel – no. 1

•Music channel – no. 2

•Sports channel – no. 1

•News Channel – no. 1

Strategy - II•Continuous innovation and new services:

•Music dedications – Dec 02•SMS chat – Jan 03•SMS voting – Feb 03•Premium IVR – March 03•Ring-tones – Jun 03•SMS News – Jul 03•M-payment – Aug 03•TV Chat – Sep 03•Integrated SMS/IVR app – Dec 03•SMS Games – Feb 04

Romanian music channels

Atomic EtnoMTV

Romania

Description98% Romanian disco music

100% Romanian etno/folk music

60% Foreign music

Average rating1 1.2 0.9 0.6

National coverage 2 58.6% 56.3% 43.5%

Notoriety2 66.8% 65.9% 54.8%

Target audience

14-26 22-50 16-28

% music/shows (estimated)

90% 80% 80%Notes: 1 – One rating point = 1.2 million viewers; prime time, Dec 03

2 – According to IMAS study – March – May 2004

Killer applications• Music dedications• Hangman• M-payment• TV SMS Chat

“Killed” applications• One2One SMS chat• Ring-tones• Integrated IVR/SMS applications

Killer applications•Music dedicationsDescription: -SMS messages are received by Simplus servers from the mobile operators-Messages are filtered – automatic (bad words list) and manual (screening by human agents)-Messages are delivered to the broadcast equipment-Text is displayed as a crawling text-Non-stop service

Reasons for success•Music dedications

-Non-stop service-Easy to use and understand-Occasions throughout the year (Christmas, Easter, St Valentine’s Day, Birthdays etc)-Almost no human intervention -People instantly receives nationwide exposure (“egocentric”)

Killer applications•HangmanDescription: -The user sends a keyword (“Hangman” –eg.) to a PSMS short code- The system delivers the word to be discovered (“H - N - - - N”)- The user sends letters and receives a number of points for each discovered word

Video

Reasons for success•Hangman- Non-stop service-Easy to use and understand – people are already accommodated with the game -No human intervention -Players receive their rank after each play (by SMS and website)-Weekly prizes for top players-Low cost/message, high number of repetitive plays-50% of traffic is made close to the deadline (last 24 hours) as players compete for top positions-Fair play system (players have all info, no cheats or tricks)

Killer applications•M-paymentDescription: -The user sends a a high value SMS (1$ - 3$ / SMS) with a code associated with the ordered services- The system delivers a code for payment confirmation- The user uses the purchased service: dial-up access, website access, personalized horoscope, personals etc.

Video

Reasons for success•M-payment- Non-stop service, comfortable use - Easy to use - No human intervention, completely automatic- Nationwide delivery (Internet dial-up throughout the country etc)- Fair pricing - Easy to adapt data-mining procedures (tracking users purchasing behaviors, monitoring usage a.s.o)- Exploit “other party pays” concept

Killer applications•TV SMS ChatDescription: -The user sends a a low value SMS to a short code- The message is displayed in a chat window on TV during night hours- A host proposes discussion subject and manages the show content-Messages are filtered for badwords and phone numbers

Reasons for success•TV SMS chat- Easy to use - A well known working principle (users are already accommodated with the web chat)- Host can keep alive and encourage conversations- Constant traffic as chatter community is built- Fair pricing (low cost)- Real time (caution: sensitive to technical flaws on the communication chain)

“Killed” applications• One2One SMS chat

•Customer perceives no benefit•Other alternative methods of communications at lower cost

• Ring-tones•Difficult to use (codes usage, various phone types etc.)

• Integrated IVR/SMS applications•Too complex procedure

Success pattern- Non-stop service - Easy to use - Completely automatic (“humans bring errors”)- Fair mechanism (users feel served, not cheated)- Instant usage- Adequate awarding to foster competition (prizes)

About failures- There is no universal success recipe - Cultural adaptations needed (the success of a certain could vary widely from country to country)- Simple mechanism, use simple advertising messages- “Try and error” – unavoidable; previous experience counts- Some services have a short lifetime (e.g.: sms-games) of several months compared with music dedication (several years)