SMS Services in Canada: The Empire Strikes Back

I am very grateful to the United States Department of Defense for that ARPANET project they had. By keeping most ot corporate America out of the development process ARPA created something that revolutionized the way we communicate without trying to make the big bucks. Imagine a world where one would have to pay for every website viewed and every email received... Not a pleasant prospect, but one that every telco would definitely adore (just look at the recent Network Neutrality debate). Teluses and Bells of the world missed their chance to control the Internet. Today, they are trying to get revenge by exploiting text messaging - in some ways, an extension of the Internet - to the fullest.

John briefly covered the situation recently. The rules are in and they favour the carriers heavily. However, several companies have accepted the challenge and are trying to make money no matter what. The Currently Active ShortCode List gives a good picture of who's serious about the SMS business in Canada.

The first category is delivery services provided by big media conglomerates. TV channels like MuchMusic, CityTV and CBC, radio stations like 680NEWS will gladly provide content to anyone accessing services through their shortcodes. The content itself is usually several sentences long and created very recently, be it news headlines or traffic reports. They charge a fee of from 25 cents and up to cover their costs - the main purpose here is clearly establishing a "presence" in the mobile medium, rather than making money. Cost of maintaing this infrastracture is pocket change when compared with a TV station budget, so it makes perfect sense for these companies.

The second group, closely related to the first is interactive services that allow cell phone users to participate in TV and radio shows. This can be sending shoutouts ala MuchMusic or sending answers to trivia on ChumFM. Once again, the cost of the message is shifted onto the participant by means of premium SMS. Still, there is some utility here as anyone can instantly get in touch with their favourite broadcaster for a low one-time price.

The third one is what I call "leeches". These companies provide services that borderline scam by providing overpriced jokes, astral alerts, horoscopes and the like on daily basis while charging ridicolous fees reaching a dollar per message. The trick here is that the cost information doesn't reach the consumer until their next phone bill, by which time they've already spent tens of dollars. There is at least half-a-dozen companies operating in this space.

The fourth is one-time promotion campaigns by food and drink manufacturers. Don't let the "one-time" promotion part fool you - these have the biggest budgets in the game. Some are so big that no premium charge is enforced onto the consumer - Coke and the like can afford it.

The fifth group is multipurpose short codes owned by various marketing companies. Similarly to the Mobile Muse developer platform, they can be used simultaneously for several promotions identified by distinct tokens. No information as to whether those are popular and efficient, but their presence in the short code registry is encouraging.

Then there are the dating services. There are 6 of them operating in Canada at the moment (the "Best Name" award goes to Cellmates) - each has a slightly different (but usually equally confusing) model and each charges the customer extra for almost every message. The revenues there must be extraordinarily large - but only in case there are enough people willing to learn and use the system.

The last service which is in a league its own is GOOGL. Free of charge, it will try its best to answer any questions you might have. Sometimes it does it really well, too. Why isn't there more similar free services? Ah yes, only giants like Google can afford to enter this market...

In any case, it's good to see some diversity in the Canadian short code business even while the carriers continue being very restrictive on who gets to play the game. Thanks to Mobile Muse and other innovative ventures things might change - keep an eye on the registry!