Giggling over free mobile phones

Google CEO Eric Schmidt caused a stir last week with a public suggestion that mobile phones “should be free,” supported by ad revenue. Funny, but even when such a notion is forwarded by a company that makes $10 billion a year from free, ad-based services (and even though my paycheck comes from such a model), it's still hard to take a statement like Schmidt's seriously.

I've got my own shocking suggestion: Television should be free, supported by ad revenue. Like it used to be. But for some reason, although I watch 3 minutes of ads for every 10 minutes of TV, I still pay $60 per month for the privilege. (No, I don't have TiVo, which costs even more.) Vogue magazine should be free. It actually has far more advertising than content! But it still costs $3.50 per issue or $30 for two years (despite many letters threatening to cancel my subscription).

Free, ad-based models work dependably for things we otherwise wouldn't pay for, and in the developed world, mobile phones don't fall into that category. For everything else, ads creep in anyway. The last time I went to the movies, I watched at least 15 minutes of commercials before the sneak previews (which are also commercials, but ones we like). And I'm sure there were more ads within the movie itself in the form of product placement. (When Bond is learning how the weapons on his car work, there's an awful lot of talk about the attractive financing rates that came with it.)

Mobile product placement ads will surely be just as sneaky. A company called Fun Little Movies (Wireless Review, September, page 3) is already creating mobile comedy series that are, in some cases, created by the sponsors. An early show called “Carpool,” sponsored by Toyota, takes place entirely in a 2007 Toyota Camry. But for other shows, the product being advertised won't always be apparent, blended somewhere within the content. (That could even migrate to voice service over time, I suppose. My voicemail greeting would become, “Sorry I'm not available to answer the phone right now. I'm enjoying a delicious V-8 Splash. You could have one! Press 2 to get 30¢ off your next bottle. Oh, and leave me a message.”) When consumers aren't even aware they're watching ads, why would they demand to pay less for the service as a result?

Schmidt said cell phones “should” be free, not that they “will” or even “probably will” be. To take that step would be to forget how NetZero did versus America Online. He was half right: Mobility will be ad-supported. It will never be free.