Mobile's looming money problem

As people use multiple devices, customers face payment overload that could hinder mobile usage

The era of free online content may be finally coming to a close, as the New York Times is starting to charge frequent readers for access to its news. That's a necessary change -- no business can exist without sufficient income, and the Web's "give it away in hopes of other revenues" business model simply doesn't work for the media business, as ad rates continue to decline. However, the Times is implementing its subscription options in a bad way for mobile users.

The problem is that the Times is acting as if iPhone and iPad users aren't the same people. It's charging $15 per four-week period to access the site (beyond the first 20 free articles) via the Web and via a smartphone app, as well as $20 for access via the Web and its iPad app. If you use both a smartphone and an iPad, your price jumps to $35 -- in essence, a double charge and a penalty for using multiple devices. It will discourage adoption of the very subscriptions that publishers need to survive.

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Likewise, the amazing adoption of iPads in addition to iPhones and Android smartphones -- and the likely wave of Android tablet adoption later this year -- is leading to another mobile money issue: Users are being forced to sign up for separate data plans for each device. The cellular carriers advertise their data plans in data buckets, such as $25 for 2GB of iPad usage at AT&T and $20 for 1GB of iPad usage at Verizon Wireless. But you also pay separately for access on your iPhone or other smartphone. That means multiple-device users are asked to pay a lot more, forcing most to make a choice between the two.

In both cases, the pricing is illogical and punitive. For their DSL and TV services, neither AT&T nor Verizon (half-owner of Verizon Wireless) charges per computer or per TV, but that's what they're doing for mobile devices. The same goes for the Times -- it doesn't charge more to access its website from multiple computers or browsers, but will do so for access to its content from multiple devices.

Mobile devices should be treated like computers and TVs: People should pay for customer accounts with a set amount of data usage, then be free to consume that data from whatever devices they choose. That means if I buy 2GB of data from Verizon Wireless, I should be able to consume it on any Verizon-compatible device I own.

In the same way, it shouldn't matter if I read the Times on multiple devices; they should be covered by the same subscription. In my case, I read the Times on the train to work via my iPhone and then via my iPad in the evening. That will cost $35 under the new scheme, but if I access the Times on the iPad's browser instead of the iPad app, it's $20. Of course, the iPad app is a better reading experience than a browser, which is why I use it. If the Times is concerned about losing money from users sharing accounts, it could simply prohibit simultaneous access via its apps.

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