OMG, someone from BT said something very important today. The discussion is on “understanding how operators can develop partnerships with Web 2.0 companies and applications developers to maximise the number, diversity and value of services available to their customers”.
JP said the unforgiveable in terms of mobile operators. He said that sometimes you have to give it way to drive different streams of revenue.
He gave an example of the musician Prince.
Prince gave away his album (CD) for free. This was his latest album. This could be thought of strange but it wasn’t as Prince had realised something that mobile operators need to. He saw what services were driving his profit margins and his revenue.
Downloads online were on the rise. But CD sales were plummeting. By giving away the CD – Prince won a sold out 30 day tour and made money from drinks, food, t-shirt sales.
This is the 2.0 business model.
What we think?
Now I don’t think that JP is saying voice should be free. But with BT touting its own SDK Web21 which is free (but the services on top of this are not) – the focus must be on data and applications. Give away the means and cash-in on the desire.
Yes, this is interesting but there are key differences. Prince’s “services” i.e concerts & merchandising, are well-proven but a mobile operator’s ‘services’ are not. There is no guarantee that an operator or a third-party will develop compelling applications, or (more importantly) what a customer will pay for them. With so many variables (add technology, standards etc)this is a high risk strategy, although one I personally admire!