Mobile's looming money problem

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

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But I don't believe them. At the same time the carriers complain about the demands on bandwidth, they heavily promote the use of video on their networks. They also have a history of using the congestion excuse to favor their own services over competitors' offerings. Maybe the carriers are telling the truth this time, but they've cried wolf too many times in the past. They also remain pretty darned profitable.

The pay balance needs to swing to information, not carriage
Whatever the carriers' economic realities, I believe we're fast approaching a limit of what people can afford to spend on information access. Add up the costs of your broadband, TV, phone, and mobile services, and you'll find it's likely the second or third biggest expense in your household if you don't have kids; if you do, it's likely in the top five. It's true the Internet has saved many people lots of money as they stopped paying for newspaper and magazine subscriptions in favor of getting it for free on the Web. Most of us believe that since we're paying for the information carriage (Web, TV, and so on), we're paying for the information itself -- but we're not.

The very idea that charging for content constitutes setting up a "pay wall" is obnoxious: No one seems to object to the grocery store having a "pay wall" for the food they eat, the electric company for having a "pay wall" for the electricity they use, or the carriers have a "pay wall" for the data they access, nor do I see people clamoring to tear down the "pay wall" of the salaries they earn. The Internet's culture of entitled freeloaders is just nuts. Maybe that attitude was plausible when the industry thought advertising would pay for everything -- but it doesn't. (And the Times appears to be making a big mistake by letting people get unlimited access to its content if they come from Twitter and other feeds, apparently to not turn of the young-adult population. All that will do is perpetuate the free-loader culture and simply shift users to those conduits, turning them from grazers to firehose-feeders -- and undermining the whole notion of paying for frequent content usage.)

Carriage costs are going up through individual access pricing for multiple devices, and information costs are increasing as publishers finally realize they have to make money so that they can continue to deliver their products. As a result, the balance needs to shift. Mobile is where the action is -- the only venue in which carriers charge per device, not for the aggregated service, and it's the most likely venue that publishers can retrain the public to think of themselves as paying customers. Thus, mobile is where this new balance needs to be struck most urgently.

To make that happen, carriers and publishers alike need to treat multiple-device users as people, not as multiple devices, and price accordingly. Otherwise, they'll both hit the ceilings of customers' willingness to pay and either undermine the move to mobile or undermine the move away from "information is free" -- or both.

This article, "Mobile's looming money problem," was originally published at Read more of Galen Gruman's Mobile Edge blog and follow the latest developments in mobile technology at Follow Galen's mobile musings on Twitter at MobileGalen. For the latest business technology news, follow on Twitter.

Copyright © 2011 IDG Communications, Inc.

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