Late last year, more than 22,000 people vented spleen at ad-funded youth MVNO Blyk for changing its ‘pricing’ structure.
Blyk, to its credit, held up its hands and explained away the move as a precautionary measure in economic recession, rather than hide as if it was a straight swindle.
Blyk offers its ‘members’ (the service is available by invite/recommendation only) limited ‘free’ airtime for accepting targeted advertising from brands associated with interests put down in their profiles.
The advertisers’ money supports the venture. Since it debuted in the UK 18 months ago, Blyk members have received 217 texts and 43 minutes of call time per month for receiving the marketing campaigns. Out-of-bundle prepay charges apply at 15p a minute and 10p a text.
But Blyk changed its bundle terms, and instead introduced a new £15 allowance, enabling any combination of ‘free’ voice, text and data usage at prepay rates (with data charged at £1 per MB).
Savvy Blyk users calculated at those rates they were around £13 per month worse off suddenly, their complementary usage worth £15 instead of £28 per month, and criticised the move as credit crunch cost-cutting on Blyk’s online forum.
Blyk’s ‘member care team’ responded, hardly denying the credit crunch had given it the fear: “We know that you have concerns about the new refill and we’d like to give you some background to these changes. No one – including us – knows how the economy will fare in 2009 and beyond.
“Blyk is aware that £15 of free credit is not as much ‘free’ as you’ve received in the past. The changes that Blyk is making today will ensure that Blyk can continue to bring members ‘free’ communication long into the future. And like many of you have said: ‘It’s far better to have Blyk than not to have Blyk at all’.”
Blyk’s response appears to demonstrate a high degree of confidence, perhaps even arrogance that members should consider themselves lucky in the first place.
But, it is an attitude that is refreshingly open, and it appears to have worked. The number of requests (for membership invitations) to join Blyk jumped 30 per cent. Blyk claims in excess of 200,000 customers in the UK at present and the late surge consolidates a decent audience for its advertisers.
Blyk co-founder and UK chief executive Antti Öhrling (pictured left) struck upon the idea of an advertising-funded MVNO after leafing through Metro newspaper in London in 2000, launched the previous year as a free morning newspaper for commuters.
He reasoned that, if a newspaper could be free to consumers by virtue of advertising revenue alone, why couldn’t mobile airtime. In 2000, mobile advertising was in its infancy, coherent formats and successful business models were hard to come by, as they remain to an extent. In that context, Öhrling’s venture was and remains audacious.
“Nobody had done it before,” says Öhrling, a veteran of the advertising industry. “And I thought, the only way is to provide the mobile service itself. Advertising adds value in media – whether it’s newspapers or television. Why not mobile?”
Öhrling discussed the idea with his university friend Pekka Ala-Pietilä (pictured, right), then Nokia president, when they were holidaying in Scotland with their families together.
“He called me about a week later saying he had a problem. I asked what was wrong with it as a business concept. And he said, ‘That’s the problem, I haven’t; I think it can work’.”
Öhrling had a business partner. In Helsinki, on a cold January day in 2006, the pair invited representatives from media, advertising and mobile industries to a discussion panel. “We presented them the idea and said, ‘Can you kill it? Can you find a reason it wouldn’t work?’ And they couldn’t,” says Öhrling.
Prior to first launch in 2007, the founders carried out extensive research and analysis into the kinds of marketing that would turn users off and the kinds that would keep them hooked (up to six per day).
The name itself is not some evocative Finnish word, in the manner of Nokia’s ‘Ovi’ (the Finnish for ‘door’). Rather it is a kind of cartoonish onomatopoeia, like ‘pow’ and ‘biff’ in DC comics, originally used by its founders to describe the noise of a new text arrived in an inbox.
“We were talking about what happens when you get a message on your phone. Someone said, ‘it’s like you’re getting ‘blikked”, so we went from there,” says Öhrling.
Full article in Mobile News issue 432 (February 9, 2009).
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