Analysis: Blyk hitting right notes with ad-funded MVNO, but faces challenges

Stuart Dredge Mobile phones

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Earlier today, I liveblogged the UK launch of Blyk, a new MVNO operator offering free calls and texts to 16-24 year-olds, in return for sending them adverts. Now the dust has settled, here’s some analysis of what it all means, and whether it’s any good.

- Some factual details to clear up. Blyk users will be sent a maximum of six advertising messages a day, and in exchange for that, they’ll get 217 free texts and 43 free voice minutes a month to use. After that point, texts cost 10p each and calls cost 15p a minute.

- Six ads a day sounds like a lot, although apparently that’s a maximum figure – it could be less. I wonder if users might feel badgered by brands if they get the full six though.

- 217 free texts works out as seven a day, while 43 voice minutes doesn’t sound like a lot over the course of a month. That’s not to say young people won’t leap at the chance when they would be paying for every text and call on a prepay contract. But to really judge the value of Blyk, I need to do some proper number-crunching and compare, say, someone using 500 texts a month and 100 minutes of calls on Blyk with its prepay rivals.

- Launching an MVNO where you’re not allowed to sign up if you’re older than 24 might not play amazingly to a roomful of grizzled tech journalists, but I think it might work well. It adds to Blyk’s sense of exclusivity from the start (“Back off Grandad, no free calls for you!”), and will help the company when signing up advertisers.

blyk-mobile-adverts.jpg- That said, it seems fairly clear that if Blyk works in its current form, the company will expand it to other age groups – whether that’s through opening up Blyk or launching a different brand remains to be seen.

- The viral element of users inviting their friends is clever. I’m surprised there’s no incentives for doing this though: extra minutes or texts if they sign up. Also lacking is any incentive for actually replying to adverts – you can’t get extra freebies if you actually interact with the ads, as opposed to just receive them. Maybe that’ll come later too.

- Blyk isn’t selling handsets: you sign up, and they send you a SIM to stick in your current phone. I think this could be a problem though, since a huge part of Blyk’s target market of 16-24 year-old Brits are on prepay contracts, and may well have mobiles locked to their existing operator. How many will receive their Blyk SIM, realise they have to get their phone unlocked to use it, and simply chuck it away instead?

- The advertising messages will be interactive, with Blyk users encouraged to reply. At the launch, Blyk said there’ll be no sanction for users who don’t reply to messages – they’ll still get their free monthly allowance. However, I’ve been rooting through the Blyk Rules that come with a SIM, and there’s a clause saying that Blyk can terminate or suspend provision of its service if “you fail to meet the Promotional Messages receipt levels required in the Free Credits Entitlement Guide for three consecutive months”.

- Having found that guide on Blyk’s website, it basically says you have to keep your phone on during daytime hours to receive ad messages, and every month Blyk will tally up how many you received. So it seems you really don’t have to reply to keep getting your free stuff. There’s also the ability to ‘pause’ your account to not receive ads for up to 45 days in a year – meant for holidays etc.

- The list of brands that have signed up for Blyk is impressive. I expected there to be mobile content companies flogging ringtones and games, but Blyk’s got the likes of Coca-Cola, Adidas, Xbox and McDonald’s on board from day one. No booze brands mind – surely if these ads are targeted, there’s nothing to stop Blyk from letting, say, Carlsberg advertise to the 18-24 section of its userbase?

- There’s no mobile content included in the free stuff. I was half expecting users to be able to get free ringtones and games supported by ads, but nope. However, this may come at a later stage, as Blyk builds relationships with its advertisers (although this raises the unpleasant prospect of a portal chock-full of McDonald’s themetune ringtones and Coca-Cola Bowling games).

- If Blyk works, presumably the big operators might follow suit with their own ad-funded tariffs. Once O2, Vodafone and 3 are using this model, where will that leave Blyk?

- Overall, Blyk is a really interesting launch, but it’s very early days and plenty of questions will only be answered a few months down the line. What proportion of ads will actually be responded to? Will advertisers launch the kind of interactive campaigns that Blyk is talking about, or could they resort to, effectively, spam? How much will it really cost a month to use Blyk, including extra charges? Still, it’s going to be fascinating finding all this out.

- Oh, they’ve given every attendee of the launch a Blyk SIM, which you wouldn’t usually get until you’ve filled in online forms to say you’re 16-24. I’ll give it a try and see if I can hop on. EDIT – Oh, it’s a blank SIM, it must just be to show you what people would actually get. Bah.

By Stuart Dredge | September 24th, 2007