More thoughts on the whole bizarre idea of networks charging for content delivery.
Media companies have been trying to get us to pay for their content since day 1, and failed miserably pretty well every time. So the vast majority of "content" from those big companies is either text and image or some audio or maybe video clips, none of which, absolutely none, will we pay for. You put money in the way and we just leave.
So if some network owner, in addition to charging for the bandwidth or the access or whatever the hell they want to call it, then wants to stick us (me and you Rupert Murdoch) for actually delivering the bits that we have paid to receive, they can look forward to some interesting stories appearing in news media around the world giving the pipe owners a serious scrutiny; and we KNOW they'll find something because everybody has a skeleton.
But lets look at something we apparently are prepared to pay for, iTunes at $0.99 a shot. Now, since that has been the price since day 1 we can assume that iTunes doesn't have much in the way of pricing power and that any attempt to increase the cost is going to reduce the business, if not actually create major hassles for Apple. But lets say that the networks can stiff the customers for another 1 cent a tune without killing the goose that lays the tin eggs. Now lets add it up.
In December 2005, after 17 months online, iTunes Europe sold its 100 millionth song, making a princely rate of 5.8 million songs a month. Lets be generous and round it to 6 million.
Meanwhile, in the US, the counter at the store says that 957 million songs have been downloaded, at an average or 29 million a month. That's 35 million CENTS a month in ePostage for the carriers. Ummmmmm, $350k a month split across all the networks? Like their lawyers will get out of bed for that.
And regardless of the BIG players, I'd bet that the vast majority of the traffic that networks are currently being paid for is content that people are sharing among themselves, be it blogs or P2P.
Take away that traffic because they aren't paying the postage, and the bandwidth based contract that I need to access the net gets a LOT smaller.
Telcos have to understand, surely, that they are in a commodity business; they will make profits based on moving as many bits as possible among as many ends as possible. Any and every action they take that reduces the demand for bandwidth undermines whatever is left of their business model.
They might even succeed in getting congress to pass a law that stupid, they might even try to implement the business models that could ride on it. But I would bet that they will just go broke even faster.
The perfect example is the British booze business, that lobbied for longer and more flexible opening hours on the grounds that they made $X per hour before, so more hours must mean more $X.
But that tiny shift has made a big difference, not just to the amount of booze that people drink, nor the rate at which they drink, but the places they choose to drink as well. No, really.
Regent Inns, the company behind the Walkabout pubs and Jongleurs comedy clubs, has announced that it has done badly out of the new licensing laws. Other groups have seen only a modest boost from extending trading and none have posted big profits in the aftermath of the licensing revolution. Many stay open an extra hour or two on Thursday, Friday and Saturday nights. Those that serve food open an hour earlier on Sundays. One of the effects of the new regime has been a shift away from the high street towards local pubs, as people no longer go searching for late-night bars.
When you are in the wrong mindset, getting what you want doesn't help, because what you want will be the wrong thing. The Telcos are relentlessly in the wrong mindset.