Web 2.0 Billing trends

It seems that there are three major pricing alternatives for services:

• Per interaction charge – this type of pricing is common in the telecom market (PSTN or mobile), companies like Amdocs offer complex billing solutions which log every phone call and feeds it to complex personalized billing options.


• Flat rate – this type of billing is common for basic continues services and subscriptions like cable television


• Advertisement based service – this type of services generate revenues by exposing the users to advertisement.

With the proliferation of Web 2.0 philosophies, non-interaction based pricing and billing schemes are gaining popularity among service providers:
VoIP service providers like Vonage provide fixed monthly rates
In a recent press release, Skype announced a new yearly flat pricing of 30$ per year on landlines calls.

As communication services pricing declines we will view a trend of using more and more fixed and advertisement based revenue generation methods and less per-interaction methods.

In multimedia billing, the same revenue generation methods exist although the trend is not a clear trend. The most common revenue source for content owners till recent years was selling a complete album or a video.
The revenue generation models described previously also exist for media distribution:
Per interaction (per song) – This model is used by companies like Apple and their iTune music store which sells songs for under 1$.
Fixed price service – This model is used by Real- Networks' Rhapsody music service which enables subscribers to consume multimedia at a monthly flat rate.
Advertisement – services like Pandora uses advertisement and referral plans to iTunes and Amazon to generate revenues
According to IceRocket comparison(on the right side graph) , iTune service is much more popular than Rhapsody.

The sector that will interest many entrepreneurs is mobile billing for both VoIP and media content.
For Mobile VoIP, the trend is clear; pricing will be reduced to air time by aggressive competitors of current mobile companies.
Content billing is more complex: Content owners would like to see revenues but in order to provide it, mobile companies will be required to implement complex content management, billing and DRM systems.
The current challenge for DRM, billing and content management vendors is to create converged low cost systems that could enable new Web 2.0 oriented business models.