Alvin Yap Talks about Monetizing the Feature Phone Industry [INTERVIEW]

Alvin Yap, CEO and founder of TMG

Readers may recall when we discussed feature phone business opportunities in Indonesia with Andy Zain. Continuing that discussion, we spoke with Alvin Yap, the founder and CEO of mobile gaming developer TMG and KotaGames, about the monetizing strategy and opportunity from the feature phone market in Indonesia. Here’s what he had to say.

Can you monetize in the feature phone industry?

We found out that we monetize better than [social games provider] Zynga. Zynga monetizes about 1.2 percent of its monthly active users (MAU). Over the last thirty days, if we look at the monetizable users, we [monetize] anything from 20 to 25 percent. So that’s about 20 times higher than what Zynga does.

Of course in our market, users have less money to spend compared to Zynga’s market. Zynga’s average revenue per daily active users (ARPDAU) is about 0.046, ours is about 0.038. So we’re about 22 percent lower than Zynga. But because we monetize 20 [times] more people, we are actually higher in terms of revenue potential compared to Zynga. For more information you can refer to our online [data] (pictured below). So can we monetize? Hell yeah we can monetize.

What are some of the key reasons behind that?

With feature phone users, they have less money to spend, but they are more willing to spend. But why?

Number one, unlike you and I, they have no access to TVs, and to regular internet services. For you and I, when we see a game that we have to pay for, we immediately stop playing it. Why? Because we have a lot of other options. Instead of Warcraft, we can play Starcraft. Instead of Cooking Mama, we can play Diner Dash. We can play anything we want, we have so many options. Instead of paying for songs, we can download them for free, instead of watching a movie of $2, we can stream it online. But for regular feature phone users, where majority of the market does not have this privilege. That is why they are more willing to pay.

Number two is because it’s cultural. They are not internet service users, they don’t have the notion that everything is free on the mobile web, they don’t have that notion. So they’ve been so accustomed over the last couple of years paying for content, paying for SMS subscription, paying for horoscope, paying for everything. So this is a common thing for them, they need to pay for content. There are people like us who are used to getting things for free, why should we need to pay for this? I will never pay anything online before because I know that if I look hard enough, I will find these things.

Does this apply specifically to Indonesia?

[This applies] in all new markets, in all emerging markets, where there’s a big income divide. Where you have the elite, and the majority of the market. In majority of the market where they don’t have regular internet access. Where they’re not educated in terms of internet access, you will see the same situation. I would say that this is a common denominator in all emerging markets: Indonesia, Thailand, India.

How much money are feature phone users usually willing to spend?