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Messaging revenues plummet

by on09 June 2015

But use is going up

Data from Juniper Research has shown that the messaging market will decline from $113.5bn in 2014 to $112.9bn in 2019.

This reduction of $600m is despite the fact that messaging traffic is forecast to double by 2019. This is driven by OTT (over-the-top) messaging applications, such as WhatsApp and LINE which are predicted to see a threefold increase in message traffic - from almost 31 trillion in 2014, to 100 trillion by 2019 globally.

Importantly, the revenue generated from each OTT message is forecast be less than 1% of that from SMS and MMS in 2019.

Juniper's latest research, Mobile & Online Messaging: SMS, RCS & IM Markets 2015-2019, found that OTT messaging services are facing a struggle to monetise services.

Combined with users switching from SMS and MMS services, this will contribute to a contraction in the overall revenue pot.

OTTs have not yet succeeded in using advertising at scale to monetise their services, due to a limited acceptance by consumers, particularly in Asian markets. In these markets, messaging services have relied upon in-app purchases such as sticker sets to generate income.

OTT players are now seeing further diversification with a foray by several big players into the payments market for example, LINE Pay, Facebook's use of Messenger to send payments, and Snapchat's 'Snapcash'.

Traditional messaging services from MNOs (mobile network operators) have long since been viewed as under threat from OTT offerings. However, in terms of revenues, SMS still continues to dominate the market, with MNOs benefiting from growth in the A2P (application to person) sector.

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