Mobile operators should follow the lead of cable TV operators by bundling content together and selling it in packages, says RealNetworks (NSDQ: RNWK) CEO Rob Glaser in an interview. He argues that putting content in packages would deliver users more content at a lower price than today’s a-la-carte pricing, and would generate more overall users of mobile data and content services. Glaser has little to back up his argument, other than the growth of the cable industry over the last several years. It’s reasonable to think that if operators offered more “free” content along with their data plans, aggregate usage among existing users would increase. But would it generate a lot of new users? That conclusion isn’t as assured as Glaser seems to believe.
Glaser suggests a price point of $10 to $20 per month for a big bundle of data and content — a figure generally in line with what US operators charge for monthly data access and their existing content portals. If those prices aren’t to increase, who’s going to be willing to give up some of their piece of the pie in order to fit everything in? “You definitely would create a model where you would have lower prices per unit times many more units. You make it up in volume because you end up with a larger installed base. That allows you to get scale,” Glaser says. While players currently left on the outside of carrier distribution deals might clamor for this model, or anything that offers them a chance to get in, companies with existing relationships and paid audiences may not be so keen to change things around.
But perhaps the biggest problem with Glaser’s plan is that it relies on operators to maintain a central role as kingmakers in the content space, by choosing who gets to be a part of their system, and how much money they’ll get to make. But isn’t that similar to the status quo? How would Glaser’s bundle be much different than operators’ previous attempts at walled gardens? This plan ignores off-portal content, instead relying on operators to deliver users to content providers that are part of their decks or services. Many of operators’ attempts to provide their users with a pre-selected set of content haven’t fared well, and there’s little reason to believe that they can suddenly change this. Perhaps a better way forward — for operators, content providers and consumers — would be for operators to work towards an ecosystem where a wide range of content providers can monetize their content, either through sales or advertising. Instead of providing subscribers with a limited choice of services, and forcing them to pay for all of them just to get the ones they actually want, a better solution would seem to be supporting a diversity of content and making it easier for users to get the content they want.