In short and simple terms, the long tail strategy consists of selling a huge number of items in relatively small quantities. Items can be products or services. Quantities can also refer to prices.
As an example, Amazon.com and Netflix.com generate most of their revenue by selling a huge variety of products that are in low demand or have low sales volume. Google makes most of its advertising revenue not from large advertisers, but from the hundreds of thousands of small advertisers.
Operator-billed service revenues across the Africa & Middle East region are expected to rise to more than $107 billion in 2013, according to a new report from Juniper Research.
The report found that growth would be driven by mobile data services, fueled by the greater availability and wider variety of rich-media content coupled with lower browsing costs.
However, it noted that regional operator-billed voice revenues were likely to peak in 2011 and would subsequently fall away due to increasingly competitive pricing in that sector.
Other findings from the Juniper Research report include:
The detailed report provides in-depth coverage and forecasts for six key Africa & Middle East markets (Egypt, Israel, Nigeria, Saudi Arabia, South Africa and the United Arab Emirates) as well as for the region as a whole. It also includes regional overviews for key revenue drivers including mobile advertising, mobile entertainment services, mobile financial services and mobile ticketing.
Whitepapers and further details of the study ‘Mobile Africa & Middle East: Opportunities, Markets & Forecasts 2008-2013’ can be freely downloaded from Juniper Research.
If anything, I think these numbers show the potential the mobile data services market in the Middle East and Africa holds, and that it could be a very lucrative market for startups in the region, who can use the growth in this sector to fuel their own business growth.
Recent numbers from Maktoob’s cashU service, the largest internet payment system in the Middle East and Africa, show that user payments for online multiplayer games account for over 60% of their revenue.
cashU was launched some years ago to provide an easy online payment system for people without access to credit cards. At first they used to provide a credit card number that people could use on all sites, even those that weren’t affiliated with cashU, but that option was stopped after some time, and now users can only pay on cashU affiliated services.
Apparently some of the people who use the service the most are young Arab online gamers, who use it to make payments on the biggest names in online multiplayer gaming – World of Warcraft, Maplestory, and Runescape, which have a multi-million user base globally, and a loyal fan base in the Middle East.
Multiplayer games have been surging in popularity throughout the world in general, and the Arab world is no exception, which is making it a target for expansion for a number of established games, like Maplestory which has a Middle East version planned for Q4 of this year, and Travian that supports Arabic.
We also reported a couple of days ago on how MBC Group is launching a new project with Chinese CDC Games, which consists of an online Arab gaming portal, in an attempt to lure online Arab gamers and get a share of the rising market.
Massively multiplayer games have explored many different distribution models, and many of them can be freely downloaded and experienced for a trial period. Typically the user only pays for a subscription fee, but there exists a third party market for virtual gold, which can be used to buy armor, weaponry, and spells.
# More: Maktoob Business
A few days ago, Arab blog aggregator service Dwwen announced they would be shutting down on June 15th this year due to financial and resource burdens.
The announcement came on the blog of Tareq Abu Zeid, the founder of Dwwen, where he said that the lack of financial backing for the service doomed it and made shutting it down inevitable.
After the announcement, a number of comments flowed in, with some people proposing that Dwwen start a donations campaign to raise money to keep going on, while some others offered to help in any way possible, and others asked how much they needed, showing readiness to help financially.
Yesterday, only a couple of days after the initial announcement, a little announcement was put up on the Dwwen homepage telling users that the service wouldn’t be shutting down and that further details would be communicated later.
It’s great news that Dwwen managed to find the backing or means to keep going on, they’ve built a really good service since they launched, and have managed to gain many an Arab blogger’s respect.
But now that things have worked out for the best, I think we should take a step back to study and analyse their case a little bit, because I think it more or less gives us some insight into the rather short life cycles of Arab startups of this kind, and how they end up having to take the decision to shut down.
As I scour the internet going through bunches of articles and blog posts, and as I read more and more business books looking for more advice and tips on launching startups and running them, one of the main questions that keeps coming to mind is that concerning the business plan.
On one side you have the people who tell you to forget about writing a business plan, and to invest that time into working on your startup, getting things off the ground and moving, and that your business plan will come easily to you later on when you’re well established.
On the other side, of course, are the people who think a business is not a business unless you seriously think about and formulate a business plan for it, and that it’s best done at the very beginning so that you know what your goals are, where you’re taking your startup and how you’re actually going to make money to keep it alive.
Both opinions hold a certain amount of truth and logic in them, but if you’re an entrepreneur thinking of launching a business today, which bit of advice should you follow?
Is there a middle ground between the two?
Personally, I think it’s very important that the entrepreneur have an idea about how they plan to generate revenue to sustain their business and grow it from the beginning, but still move forward with an open mind about it all, fully knowing that their idea could change with the evolution of the project.
How detailed these initial ideas or plans have to be depend on the size of the project and the investment being put into it; sometimes they can be just a tiny thought scribbled on a post-it note, and some other times it’s a big elaborate document.
The importance of having this idea of how the business ‘can’ eventually make money is for it to serve as a guide, a reference point for the entrepreneur to keep in mind as they build up their business, and develop different paths towards that goal, and explore other new ones that open up for them along the way.
What are your thoughts on the issue? Business plan or no business plan?
More news from Yamli, the cool web-based tool that solves the problem of Arab users who don’t have an Arabic keyboard or who aren’t as comfortable typing in Arabic; They have come up with an interesting way to start generating revenue with their tool: they enabled advertising on their Yamli editor menus.
The ads are in the form of small 120×30 banners, simply and neatly placed at the bottom of the word suggestion and option selection menus.
A number of advertisers have already started buying these ad spots with Yamli, and users of the Yamli editor tool on the Yamli website, facebook, or elsewhere should start noticing them now.
No details about the pricing of these units are available on the website, but advertisers can contact Yamli to place their ads through the following contact form.
Very good move from Yamli, who just released an API to use their tool recently, and who should be seeing an increase in their tool’s usage over the following weeks as more Arabic websites integrate their tool. SouqElArab just announced integration of the tool from their side yesterday.
It will be interesting to see how well these ads will perform, and how successful they’ll be for advertisers as a new advertising channel and for Yamli as a revenue model.