Mobile Search Moves to Free Model
Free directory assistance, supplemented with paid advertising and accessed by speech-enabled front ends, will eventually replace the traditional, caller-paid directory assistance services, Opus Research and Sterling Market Intelligence analysts conclude in a new report.
"They finally figured out that users shouldn't pay for local information. They haven't been through the search engine channels, so finally the right people are subsidizing it. To popularize it, it has to be offered as a free service, and you will see that crescendo because local information is tremendously useful," says Dan Miller, senior analyst at Opus Research and author of the report. "You can see as queries migrate over to the free DA services that there was a lot of penned-up demand and that people were avoiding using what amounts to a fairly costly channel for local information."
Over the next four years, Opus sees the mobile alternatives eating away traditional DA's volumes by as much as 30 percent per year. According to the report, "the volume of queries through advertiser-supported free directory assistance platforms is already growing explosively." Callers are seeking and receiving enhanced services such as driving directions; movie times and ticket sales; restaurant locations, reservations and specials; and other general entertainment guides.
While the report projects revenue for these services to reach $7.5 billion in 2010, it also points out that service providers are still in the awareness-raising and data-collection modes.
As the mobile user community changes its approach toward directory assistance, the major market participants will follow, leaving the choice of provider in the subscriber's hands. "Ultimately, we will see a shift in the usage pattern from what's perceived to be an expensive source of information to what is going to be a free one. The users are the ones who will decide what is most convenient, what's most cost-effective, and what's most useful, and that is how it should be."
"There is unprecedented choice in how you can get local information and there is more local information than there had ever been because there was never any financial incentive to augment core directory information," Miller explains. "This is becoming less of a monopoly - take it, leave it - sort of automatic revenue stream into a media. Competition dictates that you will always need to promote awareness and usage, so it is a happy transition that takes place as you become a real business and enter some true competition for usage.
"This isn't a group of technologies that is going to take three years to mature. The groundwork has been done for the technology and there is a large revenue bogie in the near term. Now it is time to iron out the business relationships and how to promote these services. The core message is that you don't have a lot of time to wait or to waste. Mobile search is a huge opportunity today," Miller continues.
"Over the next five years, the combination of more information, better ways of presenting it, and better understanding of what people naturally do or comfortably do is going to lead to a very strong, frequently used new medium," he concludes.