About Me 0055: Being Right or Making Money

Like an old dog with no new tricks, European wireless carriers are resurrecting a failed wireline move and trying to extract more money from the likes of Google, Apple and other web and mobile companies providing content over their wireless pipes. According to a report in Bloomberg, European carriers such as France Telecom SA, Telecom Italia SA and Vodafone Group Plc are pushing for new deals to get content providers to pay for their usage. The operators say the costs of building out their networks to handle growth in data traffic is outpacing data revenues, compromising their business models.

This is really about operators being upset over the Googles and Apples of the world profiting off the pipes the operators have built. Instead of realizing they are about providing access or building awesome content of their own, they sit at the table begging for a chunk of profits from companies which have built something on top of the operator’s networks. When begging doesn’t work, they threaten to stifle access and innovation. The carriers are like old dogs that can’t learn a new trick. Unfortunately, right now, the only trick they have is peeing on your rug.

Ed Whitacre, AT&T’s former CEO, tried to play this card a number of years ago on the wireline side, pushing for content providers to pay a quality of service tariff. The plan didn’t go through, but it showed some of the vacuous thinking of operators. That wireless carriers in Europe are looking at flogging the same idea shows they’re either dumb or really bold. Either way, it smacks of desperation.

What the carriers don’t understand is that they provide access. Yes, mobile data usage is soaring but that’s the business the carriers are in. They rely on Google and others to get people to buy their data plans and their phones. Without great services, why would people want to pony up for a smartphone or a data plan? It was great just a couple of years ago when data revenue helped offset declining margins on voice. But now that data is exploding, it’s put the carriers in a tough position.

However, trying to get money from content providers is not the way to go. The carriers are already charging users for data, and are in the midst of changing their pricing plans to reflect the very real flood of traffic caused by user demand. Right now, their wireless businesses are still very profitable; for example, Verizon reported operating income on its wireless business of 29.9 percent. It’s preferable that the operators look at tweaking that model to manage traffic and revenue. We’ve advocated innovative pricing for data plans and dynamic pricing, which makes more sense in a world with limited bandwidth and spectrum. They shouldn’t try to build a double-sided market by dipping into the revenue of companies, who have legitimately created valuable services on top of their networks. A flour mill owner can’t approach the baker for a cut of his bread revenue. This would stifle innovation and potentially undermine the dynamism in the mobile world. Will popular app makers have to worry about paying as well if their apps are consuming bandwidth?

If the wireless operators are peeved at Google and others making money off their pipes — and they are no doubt mad — they should build their own services that appeal to users. Otherwise, the carriers shouldn’t argue that they’re more than dumb pipes. The carriers may think they’re getting out early on charging content providers and may have more leverage than their wired counterparts. But pushing an unpopular model again doesn’t reflect bold thinking; it really shows that the idea cupboard is bare. Let’s hope their American wireless counterparts don’t try the same trick here.

Related content from GigaOM Pro (sub req’d):

4G State of the Union

Metered Mobile Data Is Coming and Here’s How

Mobile Broadband: pricing for profits

Post and thumbnail photos courtesy of Flickr user abbynormy

by Jamie Frevele | 10:51 am, December 23rd, 2010

Back in 1988, an amazing movie featuring human interaction with animated characters was released. It was called “Who Framed Roger Rabbit?” and it signaled a shift in my childhood perspective on animated characters. As a child who had gone through a phase of adamant refusal to watch anything that wasn’t animated, “Roger Rabbit” was my first real exposure to an acknowledgement of animated characters in a live-action world. And it was fascinating. The ‘Toons were like another race of linguistically developed, perhaps further evolved humanoid creatures that these people lived alongside with little consequence. (Unless a ‘Toon killed your brother.) But they were still cartoons. They weren’t flesh and blood people, they were Ink ‘n’ Paint.

So, my beef with the influx of 3D animation/live action movies is this: Are we supposed to think these characters are real now? Seriously? When we see characters like Garfield, Marmaduke, the Chipmunks, Yogi Bear, etc. interacting with humans, animated to look like they were born of this world, organic, living creatures that look freakishly unlike other animals of their species (is Yogi an av-er-age bear in this world, or is an average bear an average bear? or is Yogi the only one like that? WHY? What happened?), how is it that the humans with whom they interact don’t question it?

It’s bad enough that so many action movies that use excessive CGI are practically cartoons themselves. (Like this, this, and this.) It’s cool-looking, but it’s so blatantly fake. We’re watching actors reacting to nothing, and we wonder why so many of these movies suck. (Okay, “Avatar” doesn’t suck. But it’s a cartoon.) I’ve taken acting classes, and acting is reacting. To actual things that are really happening to you. Actors reacting to a ball on a pole are not acting – they’re playing make-believe. With sticks. (Fact: Bob Hoskins actually rehearsed on-set with Charles Fleischer, the voice of Roger Rabbit, who wore a bunny suit. I swear, I remember seeing this. I really hope I’m right.)

Okay, science fiction is a good exception. And there is certainly good CGI that serves the story, making the impossible come to life. But cartoons are cartoons. Either make the entire thing a cartoon and stop asking people to believe that cartoons are real, or acknowledge that cartoons are not real. Look at a movie like “Enchanted,” which started out as a typical Disney animated movie and then turned into real life. And then it was weird to people that Amy Adams kept acting like she was animated. They didn’t make Patrick Dempsey pretend to be in love with a drawing. And they didn’t make him instantly accept that he had to be in love with a cartoon character. Good job, Disney. Well played. All or nothing. This was the right way to do this.

But this is nonsense.

You might as well make this movie:

Or this one, since no one liked the first “Popeye” movie attempt:

Is this what you want to happen, America? Dave Coulier, would this paycheck really be worth it?

Maybe I’m being an overlogical downer about this. Sure, it’s easy money for actors and producers because of “the children,” and maybe I need to lighten up about things that are meant to be silly, mindless entertainment. And it’s not as if I’m being forced to see these movies. But if I see them try to make a live action/CGI “Oliver & Company,” I officially give up on life. Some things are just…sacred. And they’ve already made “Cats & Dogs” – twice – and that’s a whole other problem.

Or maybe chainsawsuit has it right:

bench craft company scam

About Me 0055

Thursday, December 23, 2010

Being Right or Making Money

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