Content Will Be Free
Russell Buckley reports a claim that the global market for paid content on mobile phones is already worth $20 billion, while the market for paid content on the web is worth only $4 billion. I don’t know the ultimate source, but the numbers probably aren’t far off. Does this mean that consumers are happy to pay for mobile content, or that the mobile market is somehow healthier than the market for content online? Russell is doubtful, and he’s not the only one.
Consumers don’t have any choice about paying for mobile content. Carriers exert so much control over our phones that in some cases – I’m talking about you Verizon – we can’t get free content onto our phones even if the content provider wants to give it away.
The high price of mobile content is a direct result of closed platforms. If your ISP could prevent you from downloading music onto your PC for free they would probably do so. Your wireless operator can and does. People may be prepared to pay more for music on their phones, but we don’t know the fair market price. There’s a very visible hand that refuses to let supply and demand determine that price.
If you make your living selling mobile content – ringtones, music, games, video, and the rest – you probably long for open platforms. Instead of 500 SKUs, you’d like to create a handful of versions of your application or content and be assured that it will work on every handset and operator in the world. You’d like to market your stuff directly to consumers and set your own prices.
Take heart, this will happen. But be careful what you wish for. If we move to open standards, content like ringtones and graphics and single-player games will be free. It’s not about “consumer expectations” or “what people are prepared to pay.” There will be plenty of companies with clear economic incentives to give this content away. And there will be no big bad carrier to stop them.