Charlie had a great post a few days back.
When I review my notes I see that I have been asking myself in so many different contexts, how can we help the operators. How do we give them incentives to open one layer and then move money to another layer? How to we help them loosen control of one layer to enhance the value in other layers? How do we avoid an end-run around immobile operators (pun intended) and bring them in? How do we help them build a rich ecosystem for all to grow?
They are crucial to our success and we to theirs.
My suggestion is that operators spend more time trying to find other layers to get money from (not wring more money out of the same game), and make other layers a lot more free (can you say access?); that they open themselves up a bit in an enlightened way and not be over protectionist (as in locking phones, for one)…that they understand that control restricts and that easier distribution and lower barriers to entry lead to new levels of creativity; that they remove the complexity making it hard for even them to grow, and to keep things simple – in technology, in services, in pricing, in access, in everything.
I don’t have an answer but he’s bang on with his analysis of the problem as well as the reason this is a timely discussion. One upcoming challenge is that the off-deck conversations are heating upâ€”so we may soon see the operators start to panic. To me, this is just proof that there are lots of people (big and small) who want to participate in our currently underdeveloped ecosystem.
If the operators were smart(er)â€”and I agree Charlie, they already are smart,useful and need to be there â€”they’d realize that providing access will only encourage participation.
The music business hasn’t exactly collapsed because of mp3 sales. Sure the business changed, and sales may now be occurring in a different way (smaller chunks for example) but then again some of the overhead has gone down (no CD’s to burn, no packaging to print, fewer distribution costs.) And discoveryâ€”although still problematicâ€”has increased as well; which has likely provided increased global sales in music that was traditionally very niche or regional. Ironicallyâ€”we used to have a hard time finding music because discovery was only local (your store, in your town.) Now it’s virtual and global but we have the problem of a bit too much choiceâ€”and discovery becomes a challenge once again. We also have to deal with the fact that we may be paying twice for the same music we bought years ago on CD.
So it’s a challenge for us as consumers and a challenge for ‘them’ as providers and promoters. But isn’t that what technology and ‘progress’ is all about? Show me one man-made invention of business, economics, technology or science that didn’t end up with negative un-intended consequences to balance out the positive ones? The idea that you can have your cake and eat it too every single time is unrealistic on both sides of the equation. And when you think of it in historical terms, it’s positively hillarious to keep having these hissy fits of “but it’s always been like this and we don’t want it to change…” about things that often didn’t exist five years ago.
So I see lots of parallels in the mobile industry with what’s happened with music the past few years (and as Cory pointed outâ€”with sheet music years ago.) What will make this all work out in the end is creativity and the ability to re-think our existing models and not be quite so greedy (and content creators, I’m talking to you too:-) Content that’s off-deck doesn’t have to be billed off-deck for example. As a matter of fact, it makes sense to bill it through the operator since the billing relationship already exists and lumping it into a phone bill also makes it easier to impulse buy. Of course the operators can then take a cut.
Then of course there’s data. Whether you scan a QR code, punch in a short code found on a subway poster, download a widget, access an on-device-portal, discover and click through a mobile ad, or use a scratch card to access or discover contentâ€”you still incur data charges. There’s tons of studies pointing to the fact that mobile data use is growing but still highly under-utilized by certain segments of the population. I don’t know about you but having an Alexandria’s worth of mobile content to choose from would certainly make me use it more. As would reasonable prices of course.
Diversity in the ecosystem also opens content up to the now well recognized principles of the long-tail. It’s way harder for an operator to interest their 50 million subscribers in 100 random games than for my local yoga studio to interest me in a bunch of yoga-related content that they know may already interest me. Sure the operators could start partnering with thousands of local retailers to sell carefully segmented catalogues of content but that’s just plain inefficient. If anything, let lots of niche aggregators do that (and there’s that access and openness again.) Or offer affiliate services so smaller organizations can hook into the on-deck or aggregate catalogues and promote products direct to their constituents. Then there’s the ability to self-publish (Web 2.0 style) which we’re beginning to see examples of but would also benefit from more access and openness at the operator level.
So maybe (in response to Charlie) the first thing we should do is begin to (regularly and aggressively remind them of the past to better help them envision a future that will be sustainable for all of us.