Hotxt has been attracting quite a lot of attention in the UK, not the least because it’s backed by Dragon’s Den entrepreneur Doug Richard. Dragon’s Den is a TV programme where wannabe entrepreneurs pitch their wares to a panel of VCs.
Hotxt is a mobile messaging service that offers an all-you-can eat menu for £1 ($1.79) a week. It’s pitched as an alternative to sms, but offered at a far cheaper rate, especially for heavy users.
How it actually works is that you download a Java application to your mobile, which then allows you to send messages across the mobile internet, bypassing sms. You still incur data charges from your mobile operator, as well as your £1 a week, however these are likely to be negligible and you’ll certainly save money over and above ordinary sms.
I like the idea, but have two concerns - one easily sorted out and one on a more strategic level.
The first area, which they can correct with a bit of time, is how the idea is presented in detail. The site really isn’t clear and the above summary I wrote took some digging around from someone who knows this space pretty well.
Java isn’t mentioned at all, for instance, and maybe this is deliberate to avoid jargon confusion. But what isn’t clear and up front is that if you want to send a message to someone else, they need to have the application installed too. What happens if they don’t have Hotxt installed isn’t very clear, but seems pretty important. After all, with a new service, the chances are slim that all my friends will have Hotxt installed, so I really need to know what happens. Will I be told that they’re not a Hotxt user when I send my message? Will they just not get it? Will my phone explode? What?
There is something called Hotxt Out, that I can use to send an sms at about 7.5p to non-subscribers. But does this kick in automatically if I try to send a message to a non-subscriber? I’d quite like to know, especially if I’m buying this primarily on a cost basis.
So, the presentation of the detail needs to be improved significantly and suffers from a common issue of the writer almost certainly being too close to the product they’re explaining. At the very least this element needs revamping and I’d recommend doing some proper usability work on the website and how people understand the service, sign up and use it.
The bigger issue is bundling. UK mobile operators already sell bundles of sms messages, which cost significantly less that the “retail”. For instance, you can buy a bundle of sms from O2 starting at £3 ($5.36) for 50, or 6p (10.7c) each and you can drop the price to as low as 3p (5.4c) by buying bigger bundles. If you’re a heavy user of sms, you’ll almost certainly be buying bundles, which already offer cheaper sms than Hotxt Out.
Of course, the core messaging service is still considerably cheaper than bundles offered by mobile network operators. But the problem is that, in the beginning, most people won’t have installed the Hotxt application, which means that most of the time your £1 a week, all-you-can-eat service is pretty useless. Therefore, the temptation for most users will be to wait until more people have signed up and if everyone does that….you see the problem.
Hotxt clearly recognise this and have built in a viral recruitment mechanic into the very heart of the system. Users get a week free messaging for everyone they sign up to Hotxt, which is indeed a powerful incentive. But whether it’ll be powerful enough to drive critical mass adoption remains to be seen.
Skype, which has clearly influenced Hotxt in everything from design to terminology, managed to succeed with a very similar model, as you can’t Skype someone who doesn’t have Skype installed. Later on, Skype introduced Skype Out and I can’t help thinking that this would have been a better route to follow for Hotxt. Just offering a low cost messaging application, which both parties needed to install is a lot simpler to communicate, without the complication of cheapish sms on top.
Another possible lesson from Skype would have been to simply offer free messaging using the application and generate revenues from premium services. This would clearly have been very ballsy, though it is an approach you’d have thought would have been seriously considered, especially given their investors.
So, is Hotxt hot? To be honest, I’d go for luke warm with lots of potential. If they sort out their usability/copy writing issues and went for a free service at the core, I think they’d be red hot.
It is interesting that these people took the Skype model to the mobile. However, what would be problematic to users is that this still requires data charges. In countries, like the Philippines, data is charged on a per kB mode and would be a significant expense on top of the service. Adding the 1 pound per week would even make is less attractive as it is.
On another note, why not just install a mobile aim, gtalk, yahoo or msn clients on the handset and sends messages free to other IM users within the same network. Wouldn’t this be cheaper and would add the benefit of providing IM to non-mobiles too? Why the need for something special.
Last problem is J2ME. Aside from the fact that it eats a lot of battery juice when running, most phone do not support putting J2ME applications in the background. Therefore, if you close the application then you can’t see the messages coming.
I believe it needs a bit more work.
You say it would be ‘really ballsy’ to follow the Skype model and launch with a totally free GPRS message offering.
In fact, someone already has.
Tex2 (www.tex2me.com) launched before Hotxt, though admittedly without the personality. It pledges a ‘free for life’ offering with no strings attached.
Which can’t be bad.
[…] « Is Hotxt Hot? […]
Do these services get GRPS revenue share? How do they monetize?
Horatio - as far as I know, they don’t get a revenue share of the data costs. UK operators wouldn’t offer this now and I doubt any time soon. Hotxt are seeking to monetise via their £1 a week charge. Tex2me via other premium services that they are yet to announce.
Russell
Another similar service is Simtext which you can get at http://www.simtext.com. Looks better thought out to me and they have a cool online messaging interface. Sits between tex2 and hotxt in terms of pricing. It’ll be interesting to see which of these guys makes some headway.
Take a look at netomat.net. Like Hotxt they have a service, netomat Hub, that seems to offer much improved text messaging, but much more, in terms of multi-media messaging, photos, group communications, PC to mobile, as well as mobile to mobile, RSS feeds, etc. Perhaps their offering is way too complicated, but it is free! Cheers, Roger
Tex2 worries me because the T&C’s indicate that you are allowing the company and its partners to advertise to you. Hopefully there are better premium services in the offing ?
[…] This is bad news for high profile Hotxt, who I wrote about last week. Their subscription of £1 a week for unlimited texting doesn’t look so attractive when compared to Telia’s £1.82, especially when you consider Hotxt can only send messages to other people with their software installed on their phones. […]
[…] Back in April, I posted a review of Hotxt, a downloadable Java application that allowed you to send all the sms-type messages you wanted for £1 ($1.79) a week. This concluded with the view that: So, is Hotxt hot? To be honest, I’d go for lukewarm with lots of potential. If they sort out their usability/copy writing issues and went for a free service at the core, I think they’d be red hot. […]
[…] Perhaps you’ve heard a lot about ULC (Ultra Low Cost) cellphones in the industry (many companies are aiming this market, see The Motorola F3)…but they are targetted to new markets, where text rendering/input is really more complex than our relatively simple alphabet: it is mandatory if you want to reach the mass of Indian users, Sri Lanka, Cambodge, Hebrew, Arabic, Philippina , Chineese…and you want cause “texting (smsing)” is a big thing: else your new emerging market will be limited to eastern Europe or South America, and be sure that text messaging will continue growing bigger. Look at the buzz around hotxt (read this mobHappy article about this new service, even if it is all but positive about it or at SMS Text News, please check the comments on this one… ) or Berggi (Berggi GigaOM article, I’m not sure about the business model of such an offer, 10 bucks a month to send sms!!). IM is perhaps the next text heavyweight champion (check this techCrunch article about the next bif ideas around IM) So Text IS big and will stay big…so emerging markets have to have the tools to leverage this potential! Two different issues to be fixed araise: […]