Tag Archives: Wireless Data

Why Free Data Is A Bad Thing For You

Everyone likes “free.” Heck, there are plenty of marketing tomes that say “free” might just be the most powerful word in marketing. Well, as usual, I’m here to burst your bubble about one particular aspect of something free which I find detrimental to us all. It’s something aggressively marketed by T-Mobile and Verizon but others do it as well. It’s called Zero-rating of data. Their “Binge On” and “FreeBee Data 360” offerings provide subscribers with free streaming media that doesn’t count against their data plans.

The basic concept is that ISP‘s – in this case the two aforementioned wireless carriers – don’t charge consumers for data used when the consumers use specific sites or services. That’s pretty appealing. In fact, T-Mobile reports that mobile subscribers who sign up for their “zero-rated video” offering immediately double their consumption of video. So why is this a bad thing?

Verizon bought Yahoo this morning. They previously bought AOL. One might expect that those two companies and their services will become zero-rated for Verizon customers. While T-Mobile has yet to buy a competitor, one can easily imagine them assembling their own lineup of content and service providers. Cable providers have been doing the same thing for a long time with fledgling cable networks. They take equity in these companies and, in return, provide carriage on a better tier (meaning it’s more widely available). These cable providers are also ISP’s.

The reason our digital ecosystem is flourishing is that until recently there was no one picking losers and winners. Zero-rating does exactly that. Think about the food court at a mall. There are two restaurants side by side, but one serves free food which is paid for by the mall landlords. Which one do you think will have the longer line, regardless of the quality of the food served? If a new streaming service enters the market but there is no data charge to visit their entrenched competitors, what chances do they have to succeed?

So yes, everyone likes free but in this case free is a bad thing. It will restrict the development of new companies. It will give more power to the gatekeepers. It enables internet providers to gain a significant advantage in the promotion of in-house services over competing independent companies, especially in data-heavy markets like video-streaming. Does that make sense?

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Contact Lenses

A printed circuit board inside a mobile phone

Back this morning with a quick thought I had while reading about eMarketer‘s new study on trends in mobile. As an aside, it seems as if there isn’t anything disruptive (like the introduction of the iPhone was) in near future but that current trends will continue and accelerate.
But that’s not what struck me. One thing I noticed was the term “smart phone“. That’s part of what, in my opinion, has caused the acceptance and use by markets of this channel to have been delayed until recently: thinking about these things as phones. Continue reading

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Thinking Personally

I spent yesterday at the OMMA Mobile conference. Very interesting although it kind of felt like everything old is new again in some ways. Much of what we’ve gone through in the development of the web is being repeated in mobile, including the reluctance of marketers to embrace a medium that is way more developed than most of them understand.  Mobile devices (I don’t like to think of them as phones since that’s very limiting) are personal, PC‘s are not. There are several times as many mobile devices as there are phones and more and more of them have high speed data access and can run applications.  There was a ton of great research presented and I’ll have more on that at some other time. Continue reading

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