European M-Commerce Strategy Leipzig Graduate School of Management, March 18 th, 2002 André Aldejohann Stefan Wriggers.

European M-Commerce Strategy

Leipzig Graduate School of Management, March 18th, 2002

André Aldejohann

Stefan Wriggers

3PowerPoint_Guideline_Beamer_08.ppt

Agenda

1. M-Commerce market trends – just another hype?

2. Bertelsmann – what assets are key?

3. Strategic options – which strategy fits best?

4. M-Commerce services today – some examples.

5. Outlook – perspectives for the future.


Agenda







Electronic Business

Mobile

Business

Background: Understanding of M-Commerce

• Non-voice-transactions in public telecommunication networks

• Using wireless devices (cell. phones, PDA‘s)

• For information, deal-making, fulfillment (distribution/payment)

Electronic Business

Electronic

CommerceMobile

Commerce

Source: Prof. Wirtz 1999, Petersmann 2001


M-Commerce drives the Growth of the European Mobile Telecommunications Market

89112 117 113 106 94

7

1220 30 47 76

2000 2001 2002 2003 2004 2005

Source: Durlacher 2001

Total revenues in € Bn.

Non-Voice

(M-Commerce)

Voice

(incl. sub-scriptions)

96

124136 143

153171


The Growth is fueled by innovative Services enabled by new Technologies...

20022000 2003/4

GPRS-enabled

• Music• Photo messages• Location based

services• E-mail

• Video telephony• Movie previews• Live links• Multimedia

archives

• Plain text SMS• Small characters

UMTSGPRSGSM/WAPTechnology


• Color display

• Camera

• Multimedia Messaging

• Stereo Sound

• GSM, GPRS, UMTS (Motorola)

...and supported by new DevicesExample: Nokia 6750 and Motorola A 820


Operators need to recoup their huge Investments...

Source: IDC; OVUM; Financial Times Deutschland; BCG analysis

€30 additional revenues nee-ded for UMTS (Germany)

Average revenueper user/month (€)

0

10

20

30

40

50

60

70

2001 2002 2003 2004 2005

Voice

Data

"The UMTS value gap"

Investments to be recouped in Western Europe: €300B


... facing a fierce Competition for Customers...

Players in the

M-Commerce Market

Mobile Operators

+ Existing wireless end user reach

- Content business not core compe- tency

Media Companies

+ Promotion power and brands

- No wireless net-work access

Internet Portals/ISP‘s

Wireless start-ups

http://portal.aol.de/

http://www.handy.de/index.php3?


... and Consumer Dissatisfaction with the first mobile Services

Current M-Commerce Services are...

• Too expensive

• Too slow

• Too complicated

• Not reliable enough etc.

Source: BCG 2000


M-Commerce is not a Hype, but a considerable Growth Market

Relevance of M-Commerce

• High growth-market

• Substantial value creation potential (although forecasted market size and growth rates have to be reduced)

• Outstanding opportunities for media companies


Agenda







Bertelsmann is an integrated Media Company . . .

Bertelsmann AG

Media Services Direct-to-CustomerContent

Random House

BMG

Gruner + Jahr

RTL Group

BertelsmannSpringer

Print

Services

Storage Media

IT

Clubs

Media eCommerce


Europe’s leading Broadcaster and TV Producer

Reach

• 24 TV channels• 17 Radio stations• 10 European countries

Content

• Largest non-US TV producer• European leader in sport rights

Brands

• Sport (Formula 1, Ski jumping)• Soaps (Gute Zeiten schlechte Zeiten)• Shows (Who wants to be a millionair)

Online activities

• Entertainment Internet portal• Interactive and mobile services

http://www.rtl.fr/

http://www.channel5.co.uk/

http://www.wow1055.com/

http://www.lugnafavoriter.com/

http://www.rtl-klub.hu/

http://www.rtl2.de/


One of the five Music Majors worldwide

BMG: regional market share (in %)

North America 12%

Latin America 15%

Europe 11%

Reach• 200 labels• 54 countries worldwide

Content & Brands• World famous artist like Whitney

Houston, Toni Braxton, Carlos Santana, Alicia Keys, Dido, Usher and Christina Aguilera

Online activities• Napster (independent company)• Music Net


Europe’s Leading Magazine Publisher...

#1 in Austria

#1 in Poland

Italy

#2 in France

#4 in Spain

#1 in Germany

Leading European Magazine Publisher

Reach• Broadest reach in Europe• #5 in the US

Content• Different segments such as business,

current affairs, women, nature/popular sience, family

Online activities• Internet portals for magazines (one

brand all media)• Mobile services via handy.de in

Germany

Brands• Well known brands like GEO or Stern


Bertelsmann disposes of key M-Commerce Assets

Content

Customerbase

Brands

Crossmarketing

• Entertainment• Information

• Established brands• Leading content brands

• Existing mobile customer• Reach/Mass market• Right target group

• Promotion power• One brand all media

InternetPortals

• Supplement for Internet• Convergence of platform• Transition of ex. customer

Strong

Strong

Medium/Low

Strong

Medium/Low

Good starting position of

Bertelsmann


Agenda







Three Business Models are relevant for Bertelsmann

Content Provider Portal MVNO

• Content aggregation, Content management, Content syndication

• Exclusive content• Branded content• Customized content

• Mobile portal content application and com-munication services

• Single services• Vertical portal• Horizontal portal

• Mobile operator without network infrastructure

B2B B2C B2C

• Handset and SIM card• Mobile voice services• Mobile portal services


Example: Napster as vertical Music Portal or MVNO


Each Model covers different Parts of the Value Chain ...

Transport/Access

SIM-Card Devices Content Billing NavigationCustomer

Care

Content Provider

Portal

MVNO


... with specific Strengths and Weaknesses

Options with operator involvements

Independentoptions

MVNO

Portal

Content provider

Airtimerevenues

shares

Core com-petency

Customerownership

Broadness of distr-ibution

Risk/investment


Bertelsmann‘s M-Commerce strategy

• Approach: Use promotion power and strong brands to drive traffic

• Competitive advantage: Sell content exclusively

• Organization: Integrate all current mobile assets into one unit

• Platform: Set up a technical mobile standard

• Co-operation: Build strategic partnerships with operators

• Geographic roll out: Focus on Europe first, then US

Start as content provider and consider strategic options of portal or MVNO later


Agenda







I-mode Service of Financial Times Germany: one Pilar of the „One Brand – All Media“-Strategy

• Free: Headlines and summary of articles

• Full article to be paid

• Content revenue split:• 86% FT• 14% I-mode (operator E-Plus)

• Breaking news: background of news per call (Euro 1,24/ minute)


Handy.de – Customized Entertainment Content for the Youth Market


The „Anywhere“-Concept of RTL – increasingly mobile


The RTL Mobile Portal – 300 Pages with Top Content (Formula 1, Soccer) plus SMS-based Info Channels


Extension of Brands and Formats in the mobile Space

http://www.rtl.de/quiz/596881.html

http://www.rtl.de/quiz/503762.html


Agenda




4. M-Commerce services today –some examples.



Relevance of M-Commerce for Bertelsmann

M-Commerce

1. Is a further distribution channel for media content

• Leverage existing content and brands

• Retain customers

2. Creates new business opportunities

• New mobile services: dating, voting

• New value creation potential

• Cross promotion

Let‘s go for the

mobile future!

European M-Commerce Strategy Leipzig Graduate School of Management, March 18 th, 2002 André Aldejohann Stefan Wriggers.

Documents

commerce services

growth rates

pptthe growth

outlook perspectives

innovative services

strategic options

umts motorolapowerpoint

forecasted market size