Growing up, I used to follow boxing. It was pretty easy to be a fan – there weren’t a lot of weight classes, there was a single sanctioning body that mattered so there was only one champion in each weight class, and it was on free TV (although pay TV didn’t exist yet) every week. In short, it was simple and fan friendly. A high-quality product was made available each week and promoters and TV networks did everything they could to get me to watch.
What does this have to do with the broadband (and wireless for that matter) business?
Somewhere along the line, boxing bought into showing the really good fights only on pay channels or even on a pay-per-view basis. They traded off exposure for money and made it expensive to use their product – be a fan. Weight classes expanded – 6 or 7 became a dozen. Additional sanctioning bodies emerged – 1 became 3 or 4. High-quality fights seem rarely to take place. The sport became expensive and hard to follow (which is, in my mind, a big part of why MMA is so successful). They discouraged viewing by the masses by making it expensive and difficult.
The airlines are another bunch of geniuses going down the same road. I’ll have more to say about this next week but they’ve made it complicated and expensive to fly anywhere which has become a lesser travel alternative despite high gas prices in many folks’ minds.
Back to broadband. AT&T is going to impose overage charges for both DSL and U-verse customers. Their logic is that a small number of hard-core users are utilizing a disproportionate amount of network capacity and they should pay for that. On the surface, it makes sense. From what I gather there isn’t “unlimited” usage – you pay for all usage above a certain base amount. Sounds fair until you think about all the devices and users on your connection – what happens when your roommate decided to watch Netflix an hour a day? What seems like a fair, large cap today may seem tiny in a few years. Do you remember when you’d never think to download a 20meg file because it would take the whole day?
Let’s think about it in boxing terms, however, and think of all the businesses who are basing their enterprises on the emergence and use of broadband web products as boxers. Suddenly, the promoters and managers realize that there is a way to make the hard-core fan (the heavy digital user) pay more. One of a couple of things will happen – they watch fewer fights (i.e. use less so they don’t hit the usage caps) or they find another way to access the services (stealing signals in boxing terms or going to a bar to watch; using the web only at work as it was years ago when many homes didn’t have broadband). Or maybe all the streaming video use becomes DVD‘s. They’ve done this already on many wireless carriers and I predict it will become a much bigger issue there shortly. More importantly, how many boxers can you name that have emerged in the last few years? 2? 1? None?
I think it’s a really bad idea to discourage consumers from using your product, especially the heavy users who can become your biggest evangelists. I don’t know what the dollar trade-off is but if boxing is an example, it’s just not worth it.